KUALA LUMPUR: Malaysia Airlines Bhd (MAS) needs strategic investors with vast experience and resources to revive its fortune, analysts said.
The turnaround effort must include a young and dynamic management team and stay away from the low-cost model, they said.
Aviation analyst Shamsul Anwar Mohamed Hussein said a young and dynamic team should lead MAS’ turnaround plan.
“Any foreign and local investor should be given the opportunity to turn around MAS. Maybe ‘old’ people may not be innovative and will insist on doing things the old way. A young and dynamic team is needed to ensure that MAS evolves over time.”
CAPA Centre for Aviation chief analyst and Southeast Asia chief representative Brendan Sobie told the New Straits Times that it would be pointless if MAS had to be bailed out again by the government a few years down the road.
“There is no point continuing with the MAS turnaround plan unless the government has full confidence in the (potential) investors, in terms of their level of funding and plan.”
Sobie and Shamsul Anwar were commenting on Prime Minister Tun Dr Mahathir Mohamad’s statement that the government had received four proposals, mostly from local companies, to turn around MAS.
Khazanah Nasional Bhd managing director Datuk Shahril Ridza Ridzuan also confirmed this.
“We do have to evaluate if they are serious offers and the capabilities of the offerors financially and from an execution point of view,” Shahril Ridza said.
He said Khazanah was not able to commit on a timeframe as it would take time to consider and clarify the proposals.
Sobie said the last thing the government wanted was to reassume control and bail out MAS again.
“The government must be willing to fully relinquish control and not interfere once an investor is selected and initiates a new turnaround attempt.”
Sobie said while a successful restructuring would not be easy, it would become virtually impossible with government interference or if the chosen investor lacked qualifications.
Shamsul Anwar said MAS should emulate premium carriers like Qatar, Emirates, Kuwaiti Airways and dynamic ones like Turkish Airlines, Austrian Airlines and Garuda Indonesia Airline.
“There is no shortage of good, premium and dynamic airlines from Asia or Europe.
“MAS should be positioned as a premium full-service carrier. Currently, MAS is behaving like a low-cost carrier at times, so its position is very unclear.
“The last thing MAS should do is to try and compete with low-cost carriers and behave like one. It must attract the 20 per cent customers who fly with full-service airlines and forget about the remaining 80 per cent, the low-cost carriers passengers.”
Accenture Malaysia country managing director Azwan Baharuddin said potential investors should have deep knowledge of running a commercial airline, besides pursuing the turnaround.
“If you have the experience and knowledge of running an international airline, it would be good. However, it is not just about filling up the aircraft, but also about the network and turnaround time, including the operation cost, and being able to price in the right (revenue model) and air fare pricing needs to be dynamic.
“It is important for the partner to have the ability to provide and develop a new network for MAS.
“Currently, MAS has got only one long-haul destination in Europe (United Kingdom), and other major destinations, like Australia, New Zealand, South Korea, Japan, and China as well as India.”
German aviation expert Andreas Spaeth said it would be beneficial for MAS to partner with foreign investors, but the investors must be given the authority to change MAS’ culture.
“I think a new tie-up with Singapore Airlines (SIA) would be a good idea, as together, MAS and SIA will benefit a lot. MAS is getting more efficient and SIA is gaining a much larger home market. Basically, a history turning full circle.”
Azwan said a combination of foreign and local investors was more apt to help MAS.
Citing an example, he said Kenya Airways was reportedly a public-private partnership, with the largest shareholder being the Kenyan government (48.9 per cent), while 38.1 per cent was owned by KQ Lenders Company 2017 Ltd. The other shareholder is KLM, with a 7.8 per cent stake.