KUALA LUMPUR: Malaysia Airlines Bhd has fallen victim to unintended consequences of Khazanah Nasional Bhd's (Khazanah) decision to sign a 15-year lease for two hangars at Subang Airport with a Singaporean company.
Former minister Khairy Jamaluddin said the lease had enabled SIA Engineering Company (SIAEC), an aircraft maintenance firm owned by Singapore Airlines, to poach essential staff leading to a domino effect on the national carrier's operations.
He said the government had previously identified maintenance, repair, and overhaul (MRO) as one of the lucrative sectors in the aviation engineering industry.
The former health minister said the government then lured companies that repair aircraft to establish themselves or set up a base in Malaysia.
"One such company we attracted was SIAEC, for which Khazanah granted a concession to operate from two hangars in Subang.
"When that happened, it wasn't just about that one decision, because MRO competition isn't limited to just one company.
"The unintended consequence was the loss of licensed aircraft engineers from Malaysia Airlines itself due to the competition. When SIAEC comes in, what do you think will happen? They will offer higher salaries because their income is in SGD," he said on his podcast Keluar Sekejap.
Khairy added that the situation had significantly impacted Malaysia Airlines operations as the national carrier can no longer carry out certain in-house operations and must now outsource.
"This leads to higher costs. In-house work is cheaper, but outsourcing incurs higher expenses.
"We are not blaming anyone, but this is an unintended consequence of the concession," he said.
Last December, SIAEC signed a 15-year lease for two hangars at Subang Airport with Impeccable Vintage Properties Sdn Bhd, a subsidiary of Khazanah, which is also a shareholder of Malaysia Airlines.
However, the decision has led to a shortage of aircraft engineers and mechanical components, which has caused recent flight disruptions at Malaysia Airlines Bhd (MAB).
An audit conducted by the Civil Aviation Authority of Malaysia (CAAM) revealed that 63 out of 411 qualified MAB Engineering Services staff left the company since January.
Transport Minister Anthony Loke has since acknowledged that the aviation regulatory body found that the resignations might be due to more attractive salary offers from other maintenance companies.