MAB’s future: Capitalise on East M’sia for a fresh start, says former minister

MALAYSIA Airlines Bhd (MAB) should consider using East Malaysia as a trajectory to reinvigorate its business following the upcoming massive capital injection.

“Did you know that before the pandemic, Sabah alone has between seven to eight chartered flights to and from South Korea daily? The latter is actually nearer to us compared to Peninsula Malaysia.

“So, why not use Sabah and Sarawak to jumpstart MAB? From there, the airliner can expand to other countries in Asean and Japan,” former International Trade and Industries Minister Darell Leiking told FocusM.

Reuters earlier reported that the Malaysia Aviation Group (MAG) has obtained court approval in the UK yesterday for an agreement between the airline’s leasing unit and a majority of its aircraft operating lessors, which will allow MAB to begin a restructuring exercise with new capital of RM3.6 bil.

Darell Leiking

MAG, the parent company of MAB, said that the scheme received unanimous support of lessors, representing an important aspect of a wider restructuring which will help reduce its liabilities of more than RM15 bil.

“Now that the scheme has been formally sanctioned by the UK court, the airline can proceed to implement its restructuring plan with the support of its sole shareholder, Khazanah Nasional Bhd and other stakeholders,” the group said in a statement.

Invest in supply chain, develop human capital

Leiking said with the ratification of the Regional Comprehensive Economic Partnership (RCEP) last year, movement of goods and services would be eased among partner nations, something which MAB can tap into.

“In the past, all our policies are established in way where it has to start from Peninsula Malaysia. What I am suggesting is, why not we tweak it a bit? Let’s start something from East Malaysia and move from there.”

For starters, Leiking suggested that MAB uses the upcoming capital injection to boost its flight infrastructure in East Malaysia.

One thing, he noted, was to upgrade and build more flight schools in the two massive states.

“There are not enough flight schools in Sabah and Sarawak. Even my son has to come to the Peninsula for his flight training.

“So, let’s invest in building more flight schools in East Malaysia. Not only can you open them for MAB’s future pilots but also from other airliners. With that, MAB can also become an establishment that develops human capital,” he noted.

The Penampang MP also said that MAB should get creative in modelling its business post COVID-19, by investing more on cargo flights and other downstream businesses.

“MAB can look into investing to create its own supply chain, in terms of aircraft components. I know some people will complain that it would put too much strain on the airliner but on the flip side, it will reduce our dependency on foreign parts.

“And what I’m suggesting is nothing new. Do you know that there many Malaysian companies already supplying aircraft components across the globe?

“For example, there is a company in Negeri Sembilan which is a major supplier of aircraft carbon brakes. In Subang, we have a company that supplies the lock between the wing and doors of A350 Airbus,” he stated.

However, the former minister reminded MAB that it could only rejuvenate itself if it makes decision based on business reality without interference from the “powers that be”.

“Though MAB is a Government-linked company (GLC), business and corporate reality must supersede other interests,” Leiking stressed.

On that note, he urged MAB to make its future procurement processes public and cut wastages to make the airliner more cost-efficient.

“Revisit all previous procurement contracts and please do away with 10- or 20-year contracts with suppliers,” added Leiking. – Feb 23, 2021.

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