How far should the Mahathir government go to keep Malaysia Airlines aloft?

The national carrier has had a turbulent recent history, including a legacy of mismanagement and billions in losses

According to experts, one way to save the ailing company could be to bring in experts from long-standing competitor AirAsia

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Malaysia Airlines aircraft at the Kuala Lumpur International Airport. Photo: EPA

Published: 2:00pm, 17 Mar 2019Updated: 2:38pm, 17 Mar 2019

Just two years after Malaysia sold the Chinese a 49.9 per cent stake in its national car, its government is debating the future of another national icon – Malaysia Airlines (MAS).

Citing poor finances, Prime Minister Mahathir Mohamad told reporters the government was weighing whether to shut down, sell or refinance MAS. “All these things are open for the government to decide,” he told Malaysian reporters on the sidelines of Parliament earlier this week.

He said the government was currently studying its options as it was a “very serious matter to shut down the airline”, although a decision was likely to be made “soon”.

Although Finance Minister Lim Guan Eng soon after reassured Malaysians that MAS would not be closed, economists and analysts have suggested it may be high time that the government gave MAS a good hard look.

Already grappling with poor international perceptions following two aviation tragedies in 2014 – when MH370 mysteriously disappeared and MH17 was shot down over Ukraine – sovereign wealth fund and MAS’ sole shareholder Khazanah registered 7.3 billion ringgit (US$1.78 billion) in impairments in 2017, half of which was from keeping MAS afloat.

The airline has also gone through more than its fair share of chief executives, including current Ryanair chief operating officer Peter Bellew who left MAS after just a year and Emirates Group’s Christoph Mueller who in 2016 quit the Malaysian carrier less than two years into a three-year contract. From 2015 to 2017 MAS lost billions due to the cost of jet fuel paired with a weakening ringgit.