Will the appointment of 'independent adviser' Morgan Stanley stop Malaysia Airline from further swallowing up taxpayer's money?
The global banker will have to come with a new bailout plan comprising government funding and potential stake sale.
<<This will mark the end of Khazanah Nasional's 5-year plan.>>
While some say Morgan Stanley will turn the airline around, this development sounds like déjà vu. The only 'du jamais-vu' (never seen before) here is the appointment of Morgan Stanley.
Reports state the investment bank "was brought in as an independent adviser for the airline’s recovery plan."
Khazanah Nasional got the banker on board last week. No details were shared on what the bank can do to stop the nosediving entity from constant failure. Pakatan Harapan did exactly what Barisan Nasional is good at doing.
MAS airplanes high flying in the sky - Picture By Boeing
RM25b TAXPAYER'S MONEY
MAS has not seen a profit for years. Instead, it has swallowed RM25 billion of taxpayer money since 2001.
The last time it was within grasp of profitability, its CEO mysteriously ran off to Ireland. Peter Bellew's flight from the cuckoo's nest probably contributed to the failed recovery plan.
<<Sometime back this year he was bent on selling MAS or closing it down, but faced backlash.>>
Deputy minister in the PM's department, Wira Dr Md Farid Md Rafik says, “We are looking to study all available strategies.”
This is a far cry from the 'we will sell MAS or ground its flights to cut operational costs".
Najib Razak, Malaysia's ex-PM proclaimed his plans were working and want more taxpayer money for MAS.
The latest injection of public money into MAS was the RM6 billion bailout given after it was delisted from the Malaysian bourse.
Photo by 贝莉儿 NG on Unsplash
RM3M DAILY LOSSES
The airline is also bleeding over RM3 million in daily losses, a sign that Najib's 12-point enabling plan failed.
In 2014, Khazanah Nasional Bhd published a "Rebuilding a National Icon: The MAS Recovery Plan." It came after the airline suffered tragic crashes with the loss of MH370 and the shooting of MH17 over Ukraine.
<<MAS suffered tragic crashes with the loss of MH370 and the shooting of MH17 over Ukraine. But the company is still flying to many destinations.>>
The next major development was the hiring of the company's first foreign CEO. Christoph Mueller left the company ahead of the end of his three-year contract.
Peter Bellew helmed Malaysia Airlines for less than 18 months. According to Bellew, success was just within grasp with just another 4%-5% in revenue to be profitable.
Malaysians should expect yet another bailout after Khazanah's 2014 plan. It will be part of the five devised in the past 15 years. It is possible the government will sell a majority stake to an outside investor.
<<The not-so-new thing is the government's will to become a minority shareholder in the carrier.>>
Will the 'new' newco will have another four pillars plan? The last failed plan was about right-sizing the airline’s fleet of Airbus and Boeing planes.
A group of businessmen led by Pahamin Ab Rajab is seeking about RM1 billion from a Japanese lender. The group headed by the co-founder of AirAsia is bidding for the take over of the carrier.
Pahamin's Najah Air Sdn Bhd is in talks with Weststar Aviation Services for a joint proposal. Weststar owns a private air charter company founded by Syed Azman Syed Ibrahim.
As a national carrier, it gets support from Malaysia's government. But this is not enough to keep it afloat in the wake of cutthroat competition from low-cost airlines.