Press Statement By DAP Secretary-General And MP For Bagan Lim Guan Eng In Kuala Lumpur On 9 August 2014.
Any restructuring or rationalization plan to rescue Malaysia Airline System(MAS) must necessarily ensure that the rights and benefits of the 20,000 MAS employees be retained as well as the unfair contracts benefiting BN cronies be terminated. DAP is willing to have an open mind on MAS’ statement that its 69.37% owner Khazanah Nasional, will offer 27 cents for each share that Khazanah does not own.
Khazanah will have to pay nearly RM 1.4 billion in cash payments to buy up the remaining 30.67% shares Khazanah does not own for MAS to go private. However these 2 preconditions stated above must be met.
DAP is not surprised that the move to delist MAS from Bursa Malaysia is due to the airline’s unfavourable financial performance with accumulated losses of RM8.53 billion as at March 31, 2013. MAS reported a RM 279 million net loss for the first three months of 2014, and is expected to record the biggest quarterly net loss in its history for the 2nd quarter of 2014, due to the tragic loss of MH370 and MH17.
Over the past five years, Khazanah has also pumped in RM 5.7 billion via three rights issues. Since 1998 Khazanah has allocated about RM 19 billion worth of rights issues and government-backed debt. MAS is also reported to be using up cash at an alarming rate of RM 5 million a day, which will soon exhaust whatever is left of its RM 3 billion cash hoard. With debts of over RM 11.5 billion, there is an urgent need to undertake the restructuring, covering the airline’s operations, business model, finances, staff and the regulatory environment.
Khazanah must come up with a concrete plan to rescue MAS, which must include the adoption of international practices of open competitive tenders and performance-based assessment for all workers, including top management. Khazanah should not take the easy way out of blaming MAS ordinary employees but focus on the decision makers, who had approved unfair contracts to BN cronies at uncompetitive prices that deepened MAS’ financial losses.
Despite the subsidies and grants of tens of billions of ringgit given by Malaysian taxpayers, MAS has shown that it cannot compete with Air Asia, which is a miraculous success story of Malaysian entrepreneurship despite not getting a single cent from Malaysian taxpayers. These are lessons that should be learnt by MAS – not the scandalous escalation of cost overruns and delays in the KLIA2 project, that rose from an initial budget of RM 1.6 billion to RM 4 billion and yet was delayed by 3 years!
LIM GUAN ENG