Can Malaysia Airlines do a Swiss turnaround?

No lesser a person than Malaysia’s Prime Minister Dr Mahathir Mohamad had suggested a review of the country’s national airline to decide whether “we should shut it down or we should sell it off or we should refinance it.”

Courtesy REUTERS/Edgar Su

The loss-making Malaysia Airlines (MAS) has long been a subject of several reviews. Two fatal incidents in 2014 – the disappearance of flight MH370 bound for Beijing from Kuala Lumpur and the shooting down of flight MH17 over Ukraine – had not made it easy for the carrier to successfully execute a three-year turnaround program following privatization.

Malaysia made a net loss of RM812million (US200 million) in 2017. The airline said 2019 closed “on a marginally lower loss compared to a year ago.”

Dr Mahathir had said that although MAS hired foreigners to manage the carrier, it was still losing money.

Christoph Mueller, known to be a “turnaround” veteran, was appointed CEO in 2015, moving from Aer Lingus. But his term was shortlived, leaving in 2016. Slashing 6,000 jobs – a third of the workforce – seemed to be a flash in the pan. The next foreign CEO, Peter Bellew who moved from Ryanair, resigned suddenly less than a year in the job.

The problem seems deep-seated. National pride aside, Dr Mahathir had suggested that one way to save the airline was to sell it.

Apparently the airline has since received offers from both local and foreign parties.

Malaysia may look at the new Swiss International Air Lines (commonly known as Swiss) which rose from the ashes from the former Swissair that went into bankruptcy in 2002. It was a painful transition as the new airline continued to make losses until 2006 following the Lufthansa Group’s acquisition of a minority stake in 2005. Two years later, Lufthansa finalized the takeover of Swiss.

So much again about national pride and not selling a national icon for sentimental reasons. That is understandable. Is politics standing in its way of a recovery? Is the airline carrying old baggages that are difficult to unload? A number of industry watchers have suggested that MAS look to the example of its successful close rival Singapore Airlines which is said to be commercially driven before all other considerations.

About Dingzi
Writer by passion, with professional expertise in aviation, customer service and creative writing. Aviation veteran with more than 30 years' experience, columnist, pubished author of fiction, poetry, plays and travel stories, editor and management consultant. Nature lover who abhors cruelty of any form to animals, and a tireless traveler.

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