This article first appeared in The Edge Malaysia Weekly on July 29, 2019 - August 4, 2019
The saying goes that insanity is doing the same thing over and over again and yet expecting a different outcome. This could well be said of what the Malaysian government has been doing over the years to save the national airline, now under Malaysia Airlines Bhd.
Since the early 1980s, Malaysia Airlines has been privatised, nationalised, re-privatised and re-nationalised. The script remained the same — that the national airline would return to health after spending billions of taxpayers’ ringgit.
But did it ever? Besides a good run from 2003 to 2005, and from 2007 to 2010, the airline has been chalking up losses to the tune of billions of ringgit. In the four years up to when it was re-nationalised in 2014, losses amounted to RM5.5 billion.
In 2014, Khazanah Nasional Bhd spent RM6 billion to salvage Malaysia Airlines. The plan was to rationalise its network and assets, improvise its then ageing products and aim for a return to profitability by 2018. However, that did not happen and losses continued, missing two deadlines to be profitable.
Can the government continue to pump in taxpayers’ money? And it cannot just be about hiring consultants and new chief executives — local or foreign.
A radical solution may be necessary.
One solution may be to sell a majority stake to a foreign airline with the expertise to turn Malaysia Airlines around as well as the funds to invest in the brand. Another may be to split the airline into two — an international, full-service, medium to long-haul airline and a low-cost, domestic and regional wing.
In any case, nationalist pride and political interference should not be part of the consideration, unless we are ready to spend billions more on Malaysia Airlines and hoping the airline will become sustainable by itself.
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