MARCH 15 — Analysts and politician cannot just argue to shut down or sell our Malaysia Airlines based on accumulated loss of RM2.5 billion without acknowledging the flawed execution on the turnaround plan.
Post restructure, we still refer our national carrier as MAS instead of MAB showcasing our deep love for our Malaysia Airlines.
Personally, I have only flown on Malaysia Airlines and their One World Alliances for all my professional and personal trips throughout my lifetime but only twice on AirAsia.
I am not writing this article to protect my Enrich points or my free flights but to protect the 14,000 personnel in our national carrier that ensure my dignity by timely arrival at my clients’ countries and safe return home to my loved ones.
Malaysia Airlines patronage
MAB inherited 30 per cent stakes in Brahim’s SATS Food Services Sdn Bhd from MAS. The other 70 per cent is held by Brahim’s SATS Investment Holdings Sdn Bhd, a subsidiary of the Brahim’s Holdings Bhd.
Before restructure, Brahim’s Holdings Bhd held 25 years concession to supply in-flight catering for 25 years ending in 2028. Brahim’s Holdings Bhd negotiated with Khazanah to honour the regressive one sided concession after Malaysia Airlines restructure.
The “new deal” expires on 2020 with optional to extend for another 5 years. Technically concession is effectively 3 year short and 25per cent cheaper than the original concession. More than 50per cent of all the meals lifted by Brahim’s SATS Food Services goes to the national carrier alone.
This locked in contract shuts the door for national carrier from utilising open tender to for cost reduction. These locked in contracts are common within the national carrier violates Khazanah’s 12-point initiative for Malaysia Airlines.
We lost focus by competing with AirAsia
Malaysia Airlines has a market share of 20.6per cent for international traffic and 32.3per cent of domestic traffic in KLIA/KLIA2 and estimated 35per cent of total traffic in other airports in Malaysia.
AirAsia have not eaten into Malaysia Airlines market share but made airline travel cheaper for lower income Malaysians. AirAsia effectively brought more new travellers with only small number has transition from Malaysia Airlines to AirAsia.
The AirAsia model makes profit by slashing all the hospitality and premium offered by Malaysia Airlines that unnecessary for budget conscious or short distance travels. Malaysia Airlines was supposed to caters to premium, corporate and long-distance travels.
The restructure effort saw Malaysia Airlines reducing long-distance light to focus on Asean, Asia-Pacific and domestic competing for budget conscious travellers which is a terrible idea.
Malaysia Airlines remain one of favourite choice for travellers from Australians, New Zealand, South Asia and Western Europe. While MH370 and MH17 incident have dented Malaysia Airlines’ image but reducing flights was knee-jerk reaction. The perception has evaporated, and Malaysia Airlines should expand its international network.
I agree with former Malaysia Airlines CEO Abdul Aziz Rahman that Malaysia Airlines has lost its purpose. Just because Malaysia Airlines try to compete with AirAsia.
Bring unions onto the board of directors
When Malaysia Airlines failed spectacularly in 2015 during low fuel prices many analyst was quick to blame the perks of the staffs.
This perception set the stage for layoff nearly thousands of people dedicated their lives for decades to build Malaysia Airlines. Most decision involving the operation of Malaysia Airlines never involved the staffs.
The workers remain the biggest stakeholder without decision power within the national carrier’s management.
Khazanah must allocate at least 1/3 of the board of directors to the unions representing the workers in Malaysia Airlines. The flight attendants, the pilots, the flight technicians and engineers must be represented in the Board of Directors.
History has showed us how foreign educated executive appointed through political patronage with no special bonding killed our Malaysia Airlines. We cannot expect different result from same action. The workers will surely make decision as it is their bread and butter.
Conclusion
While it is important for Malaysia Airlines to be financial sustainable but judging Malaysia Airlines loss purely on numbers is unjustified as political patronage and loss of focus left unaddressed.
Without addressing these fundamental issues, Malaysia Airlines will remain the biggest corporate blunder after 1MDB.
Malaysians are ready fund our national carrier recovery plan to protect jobs not the political patronage.
* Sharan Raj is the vice youth chief of Parti Sosialis Malaysia (PSM).
** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
