The figures from what Khazanah Nasional called a "hard reset" of beleaguered flag carrier Malaysia Airlines (MAS) certainly sounded impressive - it would slash 6,000 jobs and pump in RM6 billion (S$2.4 billion).
But the sovereign wealth fund's rescue plan for an airline that has lost RM5 billion since 2011 is not quite as bold as it seems in this age of the sound bite.
There is nothing ingenious about the idea of dumping money into a business to continue operations - even one that loses more than RM1 million a day from just financing costs alone - or of "right-sizing" the headcount by a third, when you have only 60 per cent of neighbouring Singapore Airlines' efficiency.
Indeed, there was an eerie sense of deja vu when Khazanah boss Azman Mokhtar said that when a new holding company is set up to house a delisted MAS in July next year, it would need a "clean slate" with a reduced net gearing - or ratio of debt to equity - of 120 per cent, from the current 290 per cent.
The same Tan Sri Azman was head of BinaFikir, which advised the government on how to turn MAS around in 2002 when the gearing was at 700 per cent.
The widespread asset unbundling (WAU) involved transferring RM5 billion in assets and RM7 billion of debt to a Khazanah-owned holding company, Penerbangan Malaysia Berhad (PMB), which then leased planes back to MAS, transformed into an "asset-light" carrier with a net cash position.
Initially, it looked like it worked. By the time Mr Azman was Khazanah managing director in 2004, MAS reported an annual net profit of RM461 million, its best performance since its 1985 listing.
Then it all went downhill. Since the government took over MAS in 2001, the airline has bled RM8.4 billion while taxpayers are down RM17.4 billion, including RM2.8 billion in losses by PMB.
A rescue team that came onboard in 2005 revealed that previous profits before a sudden dive were merely from one-off gains.
Nine years and three CEOs later, Mr Azman "appears to be dusting off the old playbook", Mr Shukor Yusof, founder of aviation researchers Endau Analytics, said.
MAS counts RM1.5 billion in perpetual sukuk (Islamic bonds) as equity - a widely-used creative accounting method. But if this were filed under debt, the gearing would be more than six times, close to 2002 levels.
In the latest exercise, debt holders are being leaned on to swap for equity at a discount - not so different from the WAU in 2002, when PMB took on debt and operated as a loss-making lessor. For example, the government's pension fund will swap about 6 per cent of MAS' total debts, but given that that is worth a sixth of the airline's current market value based on Khazanah's delisting offer, some discounting is surely involved.
"It's the same plan, under the same guys, but today MAS has even more debt than when they executed it the first time," one analyst said. "Doesn't this show that it failed?"
Some, like Maybank analyst Mohsin Aziz, say that MAS must identify "hopeless" operations and "cut them off and stop the bleeding". This would entail write- offs, he said on Bloomberg TV, and an easy decision would be to drop European routes which have been "losing money for decades".
But Khazanah did not delve deeply into route cuts for an airline that reduced capacity by 12 per cent in 2012, only for available seat-kilometres to jump by 17 per cent the following year.
And while Khazanah's plan calls for focusing on MAS' regional presence and enhancing global partnerships, the expensive Kuala Lumpur-London route, currently being served by low-yielding Airbus A-380s, will be maintained.
Simply put, job cuts are difficult to implement when there is a powerful union. And so are route cuts when there are hangars full of under-utilised planes.
Studies show capacity is growing at 10 per cent annually in Malaysia but demand growth lags behind at 8 per cent.
"This is the worst level of excess capacities I've seen in South-east Asia for some time," Sydney-based professor and former Qantas chief economist Tony Webber also said on Bloomberg.
One of the key contributors to the glut is AirAsia, he said. The low-cost giant, which now dominates half the domestic market, added an annual average of 18 per cent in capacity in the past decade, he added.
Any sustainable turnaround for MAS must involve regaining some of this market share while fending off aggressive low-cost airlines and also walking a political tightrope between diverse interests, namely, taxpayers, union workers and government.
Some analysts, like Mr Shukor, say MAS needs not a hard reset, but a harder one.
Leasing company PMB must be freed from state hands and MAS allowed to either go into bankruptcy or cease operations temporarily since operational costs now outweigh revenue, he said.
Others, such as the Capa Centre for Aviation, want MAS to be market-driven, not politically- driven, and to build deep partnerships with other carriers. This may include ceding landing rights at prime airports such as Heathrow in order that it can fully focus on increasing yield.
MAS did try a similar strategy in 2011, when it entered into a share-swap with AirAsia ostensibly to offer contrasting products, carve out captive markets while increasing the reach of their joint networks and achieve economies of scale. But this lasted all of eight months before being scuttled by its powerful union. It also coincided with a record loss of RM2.5 billion for the year.
Beyond the numbers and calculations in complicated business models, it is this lack of political will that is causing doubt among Malaysians. It is once again seen in Khazanah's resistance to drastic change. MAS will not spin off profitable divisions, nor will a name change be recommended.
Khazanah, which unveiled the plan on Aug 29, a Friday, found out what the stock market thought of it soon enough. On Monday, AirAsia shares gained 2.5 per cent.
