RM6 billion MAS turnaround plan is not a bailout, says Najib

KUALA LUMPUR, Aug 29 — The RM6 billion injection of public funds to turn around the fortunes of ailing national carrier Malaysia Airlines (MAS) is not a bailout but an investment, Prime Minister Datuk Seri Najib Razak said today.

Najib said state fund Khazanah Nasional intends to fully recover the RM6 billion investment but that recovery for the ailing national carrier could take longer than the three years envisaged by the restructuring plan announced today.

“This is an investment, not a bailout,” Najib told reporters after the Umno Supreme Council meeting here.

“The recovery may take more than three years. But we believe in three years we will see a positive turnaround,” he added.

Najib also said that any downsizing of the company will be done in the most humane and compassionate way.

Khazanah announced today that the carrier will trim its workforce by 6,000, although Ahmad Jauhari Yahya will stay on as chief executive until July 2015.

He said that a foreign CEO, if hired, will make room for a local eventually.

Najib also claimed the plan is rooted in making MAS a commercially viable airline, and Putrajaya would need to subsidise MAS if it wants to keep certain routes.

The prime minister also said that the airline is being kept alive as Malaysians want MAS as a national carrier.

Khazanah managing director Tan Sri Azman Mokhtar said earlier today the airline will be delisted from Bursa Malaysia by year end.

MAS is expected to migrate its relevant operations, assets and liabilities to the new company by July 1, 2015.

Azman said the RM6 billion in public funds for the restructuring of MAS comprised delisting the airline (RM1.4 billion), restructuring and retrenchment costs (RM1.6 billion) and injecting RM3 billion in capital into the new company over three years from this year to 2016.

MAS is targeted to be profitable by 2017, Khazanah added.

Malaysia Prime Minister Datuk Seri Najib Razak speaks at the 8th Malaysian Student Leaders Summit at the Intercontinental Hotel, on August 24, 2014. He said today state fund Khazanah Nasional intends to fully recover the RM6 billion invested into MAS. — Picture by Choo Choy May
Malaysia Prime Minister Datuk Seri Najib Razak speaks at the 8th Malaysian Student Leaders Summit at the Intercontinental Hotel, on August 24, 2014. He said today state fund Khazanah Nasional intends to fully recover the RM6 billion invested into MAS. — Picture by Choo Choy May

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