The Malaysian Insight

MALAYSIA Airlines is in the news again and as usual, for all the wrong reasons.

The national carrier again faces the risk of being grounded and shut down, five years after it shed 6,000 staff members and rebranded itself from Malaysian Airlines System to Malaysia Airlines Bhd – to avoid a shutdown following the two Boeing 777 incidents of 2014.

Now, Malaysia Airlines’ sole shareholder, state investor Khazanah Nasional Bhd, is mulling options of rescuing it with the help of plane lessors or focusing to make its lower-cost sister airline, Firefly, the new flag carrier.

“If implemented successfully, Firefly has the potential to become the national airline,” Khazanah Nasional managing director Shahril Ridza Ridzuan replied yesterday when responding to Berita Harian’s query about both airlines under the Malaysia Aviation Group (MAG) stable.

But that isn’t a solution for either Khazanah Nasional, Malaysia Airlines, Firefly or the Malaysian public who depend on airlines to travel across the nation and remote areas in Sabah and Sarawak.

His reply suggests that corporate finance or funds are not the problem for both airlines to plough through the coronavirus pandemic situation and to future success once the world opens up for passenger air travel again.

After all, the government through Khazanah Nasional has pumped in at least RM30 billion to rescue Malaysia Airlines from closure with the wide-asset unbundling (WAU) programme in 2001 until the latest in 2015.

The issue is management, political interference and work ethic – not among the majority of staff but the ones with major responsibilities.

Through it all, the top job might have had new faces, some less than a year in office, but the other senior management has remained the same – repeating mistakes and losing money for the flag carrier.

The only ones who have paid for the mistakes are those who have lost their jobs and will lose their jobs once Khazanah Nasional decides Malaysia Airlines’ fate any time soon.

But making Firefly the new national carrier will not work either. Some costs are fixed – such as plane leases, fuel and parking charges. The only costs that will be cut are staff costs – to the detriment of those working in either Malaysia Airlines and Firefly.

In other words, the MAG announcement yesterday that Firefly will restart jet operations in the first quarter of 2021 with up to 10 narrow body jets to serve the domestic, Asean and Asia-Pacific markets out of Penang International Airport will not change anything except part of its costs.

After all, Firefly has been successful because it was only operating its 12 twin turboprops mainly within Malaysia, which cost much lower than jet planes.

Putting in jets to the Firefly fleet will just transfer the costs from Malaysia Airlines and perhaps put more people out of work in the flag carrier. 

After all, will lessors want to work with a group that opens and closes business as and when it wants to do so? What will happen to the debts which have still to be paid? How will that affect Malaysia’s bond ratings?

And what happens to those who depend on Malaysia Airlines’ MasWings in the remote areas of Sabah and Sarawak? Or the staff that have already taken pay cuts and job cuts just to keep the airline afloat until now? 

Would anything change just because it carries the Firefly livery?

Khazanah Nasional should relook at MAG’s problems, not as a funding issue, but a management issue. It needs better managers to turn around the airline.

The group needs a board of experienced aviation people and a management that goes beyond setting up networks without thinking of brand loyalty and customer experience.

Thus far, Malaysia has just seen Malaysia Airlines as a black hole for money and talent. Khazanah Nasional needs to see the jumbo in the cockpit and do better than its Plan A or B. – October 16, 2020.

* Jahabar Sadiq runs The Malaysian Insight.