TURNAROUND: MAS may spin off certain divisions, file for bankruptcy or privatise, says chief executive
MALAYSIA Airlines’ (MAS) only option to ensure survival is by making radical changes to its business structure, said MAS senior executives.
They did not outline details, but MAS chief executive Ahmad Jauhari Yahya seems to suggest that the changes could be anything from spinning off certain divisions,filing for bankruptcy, to privatisation.
“We are exploring all options and by all options I mean we are exploring all the possibilities available. All we know is that it is time-critical ... we have to work in consultation with our shareholders and stakeholders because the government has a golden share in the company,” he told reporters after the company’s heated 43rd annual general meeting (AGM), here, yesterday.
MAS already announced plans to revise its Business Turnaround Plan (BTP) introduced in 2012. Its largest shareholder, Khazanah Nasional Bhd, recently said a new restructuring plan can be expected in six to 12 months.
Business Times also reported that MAS was mulling over selling its maintenance, repair and overhaul division, MAS Engineering, as part of its plan to return to profitability.
Ahmad Jauhari said the revised BTP had started since the fourth quarter of last year.
“We thought that the trajectory that we were taking based on what we did last year is not good enough to take the airline to the future. The (flight) MH370 incident only accelerated the initiative to re-look at everything again,” he added.
MAS reported a wider net loss of RM1.17 billion last year, despite revenue growing to RM15.12 billion.
Ahmad Jauhari said the airline would make full use of its four world-class assets built over the years as part of its immediate plan to restructure. The assets include its fleet of aircraft that is less than five years old, services, engineering capabilities and safety track record.
“The foundations for the resurgence of MAS are very much there,” he added.
As an immediate strategy to stay afloat, he said MAS plans to add more seats on its Boeing 777 fleet, although it plans to retire all of the B777 fleet within three years.
“Studies have shown that we will be able to recoup the costs within six months and it would also boost the balance sheet,” he said.
Meanwhile, it was a heated session at the company’s AGM as shareholders aired their dissatisfaction over its financial and share performance.
The shareholders also called for the immediate resignation of the board and senior management.
MAS chairman Tan Sri Md Nor Yusof said it is only natural for the shareholders to be angry, considering how events have unfolded.
“We have tried to explain to them that MAS has been facing chronic difficulties over the past 15 years,” he said.