MAS:National Pride Or National Burden? Sell, Close Down Or Feed To The Dogs?

Hantu Laut

There had been many fatalities in the airline business.There were no crybabies.

The three most well-known demises of national airlines were Pan Am, Swissair and Sabena of the U.S, Switzerland and Belgium respectively. I have had the honour of having flown with all three airlines before they were destined to the graves.

One must not have false sense of pride and sentiments when come to running a business, if it continues to lose money, sell it or close it down, a lesson many a government learned too late or couldn't care less, acting irresponsibly by pouring taxpayer's money into bottomless pit, which eventually would become even more costlier to shut down.

The Malaysian taxpayers should not be made to continue giving money to this sick child just because the government think they are beholden to keep employing those 20,000 grossly overstaffed MAS bumiputra employees and to maintain a false and costly national pride.

The government should be beholden to all the taxpayers for dutifully paying their taxes instead of this money-guzzling monster.

MAS losses were not due to external market forces.Basically, its major losses were due to gross mismanagement arising out of over staffing, overpricing by sub-contractors, high fuel prices due to poor financial planning and in a nutshell a very incompetent management.MAS has enough business in the air but the excessively high expenditure caused the massive loss.

Its airline core business revenue increased by 2% to RM13.9 billion in 2011 but sustained a massive loss of RM2.52 billion.The higher fuel costs were due to management lack of foresight. A competent management would have learned and knew how to hedge fuel prices, maybe, not all but part of it.Since passengers help subsidise the increased fuel cost by paying fuel surcharges, MAS management cannot claim that most of it losses were due to higher fuel costs.

Using the 2011 loss as a yardstick, MAS have lost 10 Boeing 737-800 in 2011, literally chopping them up for the scrapyard, which, hypothetically, also means it could have paid the purchase of 10 units of new Boeing 737-800 in cash.Current price of Boeing 737-800 is at US$83-100 million depending on configuration.

The airline had gone through many management changes over the past decade yet nothing good has come out of it.

As I have predicted correctly of past management failures, I am still not convinced the new management team put in recently would be able to save the airline.There will be lots of talk but little improvement.Political interference is another stumbling block besieging government controlled companies and MAS is not spared from such burden.Many MAS supply contracts were given to relatives and cronies with highly inflated prices.Remember the RM75 or RM150 per serving nasi lemak episode not long ago?

Can MAS pay for aircrafts due for delivery this year and next? They are 5 units A-380, 13 B737-800 and 5 A330-300.MAS needs almost RM10 billion for the next two years to pay for aircraft deliveries.How are they going to pay when they only have RM1.1 cash reserve, which will be exhausted soon to pay for the continuing losses, should they be unable to turn around the company within the next twelve months?

With the deep red balance sheet would the banks lend them money or they would have to go to Santa Clause (Khazanah) to get the money, the people's money.

Three things the government can do, forget about national pride, it's a national shame.............sell the damned thing to a private concern, close it down, or chop it up, bit by bit, and feed to the dogs.

MAS, national pride or national burden?

Blast from the past, read here, talk is cheap!