This article first appeared in The Edge Malaysia Weekly on September 9, 2024 - September 15, 2024

An audit by the Civil Aviation Authority of Malaysia (CAAM) has found that Malaysia Airlines Bhd lost more than 60 of its engineering services staff to SIA Engineering Co (SIAEC), a subsidiary of Singapore Airlines Ltd, this year as the latter was able to offer an increase in salary of up to 40%.

This has led to criticism of the government for allowing SIAEC to operate in Subang airport, undermining the country’s interests and causing the talent drain. Critics say the reason Malaysia Airlines couldn’t fly to all its destinations was because it was losing people to maintain its aircraft fleet.

So, how does one balance between attracting foreign investment and protecting local companies? As a free market economy, shouldn’t it be based on competition rather than government control? Why must the government prioritise Malaysia Airlines over the growth of the country, considering that it is the country’s ambition to become the aerospace hub of Southeast Asia?

The country cannot become a regional hub without foreign investments as these players help create jobs that lead to the transfer of new technologies, specialised knowledge and skills to locals. SIAEC is a major player in the maintenance, repair and overhaul (MRO) market in the region, and therefore having it establish a base in Subang will increase MRO activities in the city.

On Malaysia Airlines’ part, it should ensure that it has effective manpower management in place so that it does not lose more talent. A better remuneration package is not just about offering a higher salary than competitors.

Indeed, the government is doing the right thing in attracting foreign investments into the country’s aerospace sector as it is one of the sectors that generates high income for the people.

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