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Malaysia Airlines Bhd’s (MAS) planes on the tarmac at the Kuala Lumpur International Airport. - NSTP/EIZAIRI SHAMSUDIN
Malaysia Airlines Bhd’s (MAS) planes on the tarmac at the Kuala Lumpur International Airport. - NSTP/EIZAIRI SHAMSUDIN

KUALA LUMPUR: Malaysia Airlines Bhd’s (MAS) days as a national carrier may be numbered as it has failed to meet its three-year target to be profitable, but is instead bleeding since it was taken private in 2014, say aviation analysts.

They said that the best deal for the airline is to completely shut down its operations or sell it to interested parties or spin off its business divisions.

Shukor Yusof, the founder of Malaysian-based aviation consultancy firm Endau Analytics, said there would be no capacity issue if MAS were to close shop as its void would be filled by other airlines.

“MAS ought to shut down. There is no economic or financial rationale in maintaining it in its current condition. A loss-making business can’t continue indefinitely,” he told the New Straits Times.

If the national airline was shut down, its assets, such as aircraft and properties, could be used to repay debts while some of its workers could be redirected to other airlines, such as Malindo Airways or AirAsia.

“What’s more important, in my view, is to take to task the people who have been responsible for ruining MAS. There must be accountability.”

Shukor said the question that remains to be answered is does MAS really bring a multiplier effect to Malaysia’s economy via tourism revenue.

In a recent interview, Khazanah Nasional Bhd managing director Datuk Shahril Ridza Ridzuan said MAS brings a multiplier effect of eight to 10 times from tourists for each dollar that the airline brings to Malaysia.

Khazanah is the sole shareholder of MAS after taking the airline private in 2014. The sovereign wealth fund injected RM6 billion into the airline to keep it afloat.

Maybank Investment Bank Bhd aviation analyst Mohshin Aziz agreed that the best way was for MAS to discontinue operations given that its turnaround plans over the years have failed.

“Should Malaysia have a national airline? That argument is becoming weaker because we have been bailing it out many times.

“Nowadays, the attachment and sentiment to the national airline is not as strong as before.

“Previously, there was a sense of pride attached to the brand. But today, the emotional attachment is not as strong, particularly among the younger generation.”

However, Mohshin said, MAS could be sold to an interested party or enter into a joint venture with other airlines, or its parent company Malaysia Aviation Group Bhd could sell off one of its subsidiaries, such as MAB Engineering.

The volume for MAS’ maintenance, repair and overhaul (MRO) was low, he said, and it was facing intense competition from other MRO service providers in the region, such as Singapore, Thailand, Indonesia and the Philippines.

“I think they should test the market to sell their MRO. It makes financial sense because it’s too expensive to maintain that business. The saving grace is to sell the MRO to a world-recognised MRO facility.

“MAS’ idea for an MRO unit in the past was because they had many aircraft, so they might as well maintain the planes themselves and with the spare capacity, offer third-party service to other airlines,” he said, adding that MAS’ current fleet size was smaller.

MAG’s other subsidiaries include Firefly, MASwings, MAB Kargo, AeroDarat Services, MAB Leasing, MAB Pesawat and MAB Academy.

From its delisting from Bursa Malaysia from 2015 to 2017, MAS had registered a loss of RM2.3 billion due to the ringgit’s weakness and higher jet fuel costs.

Khazanah on Tuesday announced that half of its total impairment cost of RM7.3 billion in 2018 was due to the carrier.

The sovereign wealth fund has asked MAB to produce a new strategic plan.

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