Government to study MAS’ future

A file picture of a visitor looking out from the KLIA viewing gallery on May 27, 2014. – AP

Reports by MARTIN CARVALHO, HEMANANTHANI SIVANANDAM, RAHIMY RAHIM and TARRENCE TAN 

THE government will conduct a study to decide on Malaysian Airlines Bhd’s (MAS) fate after its losses caused a massive impairment into its sole shareholder Khazanah Nasional Bhd’s account, says Prime Minister Tun Dr Mahathir Mohamad.

“To me, it’s a serious matter to shut down the national airline. We will nevertheless study whether we should shut it down or sell it off, or refinance it.

“All of these options are open for the government to decide,” he said.

Dr Mahathir was speaking to reporters during a press conference at the Parliament lobby yesterday.

Economic Affairs Minister Datuk Seri Mohamed Azmin Ali said that MAS’ fate had been deliberated in a recent board meeting by Khazanah.

“Dr M has given his view on how he should manage the situation now.

“The management of Khazanah and MAS were both present during the meeting and they took this matter seriously,” he said yesterday.

The national sovereign fund had accounted half of its RM7.3bil impairments registered in 2018 in sustaining MAS.

Khazanah recorded a pre-tax loss of RM6.3bil in 2018.

Last Wednesday, Khazanah managing director Datuk Shahril Ridza Ridzuan said that a comprehensive strategic review of the national airline is being conducted to improve its performance.

He acknowledged that MAS did not achieve what it had intended in the original turnaround plan, which manifested in a huge write-down of investment.

The national airline was taken private by Khazanah as part of a five-year turnaround programme, which commenced in 2014.

Meanwhile, Dr Mahathir also said that the government is looking at the feasibility of privatising parts of the public sector in a bid to address the problem of its bloated size.

He said the government introduced a similar drive in 1983 that touched the function of the private sector in the development of the nation and successfully reduced the financial burden, improved efficiency and quality of work, and stimulated the growth of the economy and effective distribution of resources.

“This can be seen, for instance, with the success of privatising Telekom, where its staff were transferred to a private company.

“This reduced the number of those working in the public sector.

“At the same time, the staff received better salary packages.

“We believe that this strategy is still relevant to address the issue of the size of the civil service that is seen to have a huge financial implication and burden,” he told Datuk Seri Ismail Mohamed (BN-Kuala Krau) during Minister’s Question Time.

Ismail had asked the government the reason for reducing the size of the number of civil servants.

The government, Dr Mahathir said, will prepare a holistic plan to ensure the transition plan to cut the size of the public sector will not have an impact on the administration of the country.

According to Dr Mahathir, the number of civil servants stood at about one million when he stepped down in 2003 but the figures continued to rise to about 1.7 million people.