25 February 2014
MAS’ huge financial losses over the last 3 years amounting to RM 4.1 billion would have allowed BR1M recipients to receive RM 1,200 as promised under the 2013 BN General Election Manifesto instead of the reduced RM 650.
MAS incurred losses of RM 1.17 billion last year, RM 433 million in 2012 and a record loss of RM 2.5 billion in 2011. These RM 4.1 billion in losses over 3 years would nearly make up for the additional sum required to top up the difference in BR1M payments from RM650 (which costs RM4.5 billion) to RM 1,200.
There is no sense of crisis or a turnaround plan at MAS to stem the bleeding of financial losses. Whilst MAS may think that these losses are sustainable because MAS still have cash balances of M3.9 billion as at end of last year, it would be irresponsible if not suicidal to continue with the “business as usual” attitude. MAS owners, Khazanah, must seek decisive surgical solutions by coming to terms with the fact that MAS, with its current cost structure, is just not viable.
Singapore Business Times have even suggested that MAS file for bankruptcy to allow its replacement the fresh start needed to resuscitate the ailing airline because MAS is bogged down by overstaffing and “lopsided procurement contracts” from maintenance to catering. No one is surprised that cronyism and hanky-panky is one of the main causes of MAS continued decline.
Don’t file for bankruptcy
DAP does not agree with MAS filing for bankruptcy not only because it is shameful but its adverse impact on MAS’ workers. However Khazanah must come up with a concrete plan to rescue MAS, which must include the adoption of international practices of open competitive tenders and performance-based assessment for all workers, including top management.
Despite the subsidies and grants of tens of billions given by Malaysian taxpayers, MAS has shown that it cannot compete with Air Asia, which is a miraculous success story for Malaysian entrepreneurship despite not getting a single cent from Malaysian taxpayers. Worse, the new budget carrier Malindo Air would only impact negatively on MAS’s profits.
The Transport Ministry does not appear to have a clue about undertaking cost-effective infrastructure projects as seen by the scandalous escalation of cost overruns and delays in the klia2 project. From an initial budget of RM1.6 billion, klia2’s costs has soared to RM 4 billion and the project has been 3 years late in missing completion datelines 3 times, with public safety cited as the reason for the latest delays to the project.
The time has come for Transport Minister Datuk Seri Hishamuddin Tun Hussein Onn to put aside egos for the national interest by working with Air Asia founder Tan Sri Tony Fernandes. Malaysia only loses if Hishamuddin refuses to accept Tony Fernandes’ expertise, who pointedly said that the Low-Cost Carrier Terminal in Sepang only costs RM 250 million, a pittance compared to klia2’s RM 4 billion price tag.
Lim Guan Eng is the DAP sec-gen