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MAS to be privatised and restructured in battle to survive

August 12, 2014 Aviation, Headline News No Comments Email Email

egtmedia59Malaysia Airlines will be de-listed from the Malaysian stock exchange and privatised to prepare for major restructuring following the double disasters of flights MH370 and MH17.

The move had been predicted by analysts, some of whom feel that the carrier may eventually change its name. Bookings have plunged and MAS is reported to be consuming its cash reserves at a rate of around USD 2 million per day in a battle for survival.

Malaysian government investment vehicle Khazanah Nasional, which owns 70% of MAS, has pledged to buy all minority shares in the flag carrier. It plans to complete a restructuring plan for the troubled carrier by the end of the month.

Just recently, Ian Douglas, Senior Lecturer Aviation at UNSW Australia, wrote: “Malaysia Airlines (MAS) was struggling even before the loss of MH370 in March 2014, and the loss of MH17 in July 2014 can only compound the problems of the airline”.

Douglas, who acted as a consultant to MAS on pricing and revenue management in 2003/2004, continued: “Largely state-owned, and bound by its historical position of flag-carrier, MAS has struggled to compete. On one side it faces intense low cost competition in its home market from Air Asia and Air Asia’s long haul sibling Air Asia X. On the other side it sees relentless growth from gulf-state full service airlines.” See: Malaysia Airlines now faces stark choices in a battle to survive

Khazanah has spoken of a “complete overhaul of the national carrier on all relevant aspects [including] the airline’s operations, business model, finances, human capital and regulatory environment”, news service AFP has reported.

“Nothing less will be required in order to revive our national airline to be profitable as a commercial entity and to serve its function as a critical national development entity,” it said.

Written by : Peter Needham

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