KUALA LUMPUR, June 2 — Malaysian Airlines Bhd (MAB) will remain a full-service international airline, maintaining Malaysia Airlines’ (MAS) current domestic routes and a regional “backbone” with broad connectivity globally through partnerships, said Khazanah Nasional Bhd.
Khazanah, the national airline’s largest shareholder, said MAB’s network would serve, among others, the ASEAN, China, India and domestic markets, with service to key international destinations in Japan, South Korea, Australia, New Zealand, the United Kingdom and Saudi Arabia.
“The network will also have an expanded reach into Africa, the United States and Europe via potential partnerships that are being explored,” it said in a statement today.
It said in building a new national icon, the national carrier would feature a refreshed Malaysian-centric brand with a truly new start-up company outlook, young fleet and premium positioning offerings that uphold the reputation for award-winning service.
Khazanah said a new catering concept with less complexity but superior ingredients and quality would be introduced in addition to customers’ flexibility in customising their flight experience to cater to their requirements.
It added that the national carrier would also aspire to be an “employer of choice” and further enhance its internal employee development and training structures to become a top talent incubator for the nation.
Khazanah said the 12-point recovery plan is on track with significant progress made, including commencement of workforce right-sizing as the carrier’s restructuring enters a critical phase.
It said over 14,000 MAS employees were offered employment at the new company Malaysia Airlines Bhd (MAB), with a large chunk receiving full-time employment and the rest offered contract employment of various durations.
“Workforce right-sizing had commenced after a robust, systematic and detailed talent selection process,” it said.
Khazanah said employees exiting MAS by August 31 would receive a termination package that includes payment based on a formula similar to that under existing Collective Agreements at MAS, and free training and placement services at the Corporate Development Centre (CDC), which it said has identified over 12,000 job opportunities available for the staff.
“Payments and benefits provided to both employees joining MAB and leaving MAS will total up to RM1.5 billion,” it said.
Khazanah said as the carrier undertakes route rationalisation, selected non-profitable routes, namely Kunming, Frankfurt, Krabi and Cochin, have been suspended with further route rationalisation being considered.
“Moving forward, the national carrier will be principally commercial while supporting national development objectives, provide broad connectivity via partnerships, and offer refreshed premium products,” it said.
Another milestone achieved was the sealing of two new catering agreements (NCAs) with Brahim’s Airline Catering Sdn Bhd on May 10 that are benchmarked against international standards and based on industry best practices, it said.
It said the NCAs provide for a strict service level agreement and key performance indicators (KPIs) to be adhered to, considerably improved pricing, non-exclusivity and a shortened tenure, compared with the previous catering agreement.
It added that the two separate contracts covering “Wide Body Aircraft” flights and “Narrow Body Aircraft” flights are for an initial tenure of five years and an additional five-year renewal subject to strict conditions including BAC meeting critical KPIs.
Meanwhile, on the transition of MAB from MAS, it said Christoph Mueller was appointed as MAS Chief Executive Officer on May 1 in an accelerated leadership transition.
“The accelerated transition enables Mueller to lead the overall MAS restructuring effort as it enters one of its most critical phases,” it said.
It added that Mueller also took over responsibilities as Chief Commercial Officer on June 1, following the resignation of Director of Commercial Dr Hugh Dunleavy effective August 31.
Khazanah said under the Malaysian Airline System Bhd (Administration) Act 2015, Datuk Mohammad Faiz Azmi was appointed as an Administrator for MAS to facilitate the transfer of selected assets and liabilities effectively by September 1.
It said a commitment of RM6 billion in conditional investment funding in total from Khazanah for both MAS and MAB continues to be in place and would be disbursed on a staggered basis subject to strict conditions being met.
Khazanah said the Malaysian Aviation Commission Bill 2015 was also passed by both houses of Parliament in April 2015 to provide for the establishment of an aviation commission.
It said the commission functions, among others, to regulate economic matters relating to the civil aviation industry, provide mechanisms for the protection of consumers and for dispute resolution between providers of aviation services.
The commission would also administer, allocate and manage air traffic rights, monitor slot allocation for airlines or other aircraft operators, and administer and manage public service obligations, it added. — Bernama
