EDITORIAL

Helping flag carrier to soar again

A hard reset for ailing Malaysia Airlines (MAS) is, of course, a lot harder than the metaphor suggests. Pushing some expensive buttons can deliver a fresh business structure and new brand name. But to become a competitive player will call for creative destruction at the pace and scale that a pitiless market demands. Would the national carrier and its largest shareholder, Malaysian state investor Khazanah Nasional, be up for that?

This is as much a political as it is a business question. Critics blame cronyism for overstaffing and inflated supply contracts linked to the politically connected. In former prime minister Mahathir Mohamad's view, Khazanah's control of MAS over the years shows it is part of the problem too. The airline was restructured six times and changed its chief executive five times over a dozen years. He cannot fathom how a RM6 billion (S$2.4 billion) plan for Khazanah to privatise the company will stop the bleeding - the state fund has already spent over RM7 billion and seen debts soar to over RM11 billion.

There is a lot to live down. Perceptions will linger of official mishandling after MAS Flight 370 disappeared mysteriously in March, and of the insensitively named contest, "My Ultimate Bucket List", that MAS ran after Flight MH17 was shot down tragically - bringing the total loss of lives to 537. Given the circumstances, few would doubt that nothing less than radical transformation is required from the C-suite to the hangar floor.

In its moment of truth, what would most help MAS is independence to compete vigorously in a turbulent marketplace, without being caught in the undertow of politics and bureaucracy that could arise with the formation of an aviation commission. Fresh strategies are needed to secure a return to profitability. This could mean taking a leaf out of the book of successful no-frills carriers by casting out non-essentials and focusing on yield-management systems to ticket pricing. Simply filling seats at unsustainable prices won't do.

Some observers, like The Economist magazine, argue that "most airlines in state control have failed to adapt" to liberalisation and privatisation which have made global air travel more competitive. Yet many nations strive to keep beleaguered flag carriers aloft for the sake of prestige, vital air connections, jobs, tourism and other economic spin-offs. Even when they are clearly earning less than what they spend, it is hard to let them go. But in the case of award-winning MAS, this need not be the end of the journey. Rather it is an opportunity to rise phoenix-like and return to winning ways by reimagining its future in a bold, creative and disciplined manner.