Turning around Malaysia Airlines

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An honorable member of the Coffee Shop Has Just Posted the Following:

Turning around MAS


MALAYSIAN Airlines (MAS) should have a new Sustainability Compliance Roadmap (SCR) that is tied to the proposed MAS Act in order to turn itself around in three years.

Jeong Chun Phuoc, consultant member of Corporate Compliance Initiative at Azmi & Associates, said the new SCR should focus on three key aspects in its business turnaround plan, which are re-alignment, re-management and re-performance.

“This will help to improve the competitiveness, profitability and sustainability of the business,” he said re cently.

Two months ago, Khazanah announced a revamp plan for MAS that would involve a RM4.6 billion capital injection (after privatisation), 30 per cent cut in workforce, review of routes and renegotiation of supply contracts.

Khazanah plans to delist MAS and shift the airline’s operations, assets and liabilities to a new company (NewCo) by July 1 next year.

The move will enable the NewCo to operate as a commercial enterprise, with the target to bring it back to profitability between 2017 and 2019.

The proposed MAS Act is to facilitate the restructuring of the carrier, which has been laden with debts for years.

Khazanah, which owns 69.37 per cent of MAS, has said it is “an important enabling Act”.

“The MAS Act is another golden key to transform the carrier and achieve profitability. However, to become profitable, it has to tie in with a new SCR. The carrier’s 12-point revamp plan is to get profit trickling in within three years.

However, the variables may change.

“The odds appear to be Herculean in nature, but Khazanah had performed a David Copperfield act before by turning around Telekom Malaysia Bhd (TM) in 2006. TM is now competitive in the broadband sector,” he said.

According to him, Khazanah has implemented similar “business sustainability strategies” for 60 of the country’s largest companies since its inception in 1993.

Its SCR style is reflected in “The Khazanah Report 2013: Inclusivity — A Key Component of Value Distribution” for corporate case study on

SCR Framework.

“The MAS revamp by Khazanah is unlike that for the 60 companies that it has saved.

MAS has been bleeding for a long time and it has many unhappy union employees and pilots.

Even key corporate players are afraid to jump in and lead MAS. It may be a challenge to turn around MAS but it can be achieved.”

Jeong said MAS should also set up a Compliance And Oversight Office (Come) to oversee the re-alignment, re-management and re-performance of MAS towards Phase 1 of the SCR track.

“The proposed MAS Act is expected to create a new Aviation Commission, and Come can assist this commission in achieving competitive sustainability.

They can also work together with the Malaysia Competition Commission and aviation stakeholders to ensure a better, greener and more agile MAS and be a boon for the aviation industry as well,” he said.



http://www.nst.com.my/node/40263


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