Cabinet approves MAS’ latest revamp plan

by **Cals** Thu 28 Aug 2014, 18:17

Business & Markets 2014

Written by Eileen Ng & Meena Lakshana of theedgemalaysia.com

Thursday, 28 August 2014 08:48

KUALA LUMPUR: Putrajaya has approved Malaysian Airline System Bhd’s (MAS) latest restructuring plan that will see up to 6,000 jobs being cut, said sources.

The Cabinet approval follows state asset manager Khazanah Nasional Bhd consenting to the comprehensive revamp of the national carrier, which has suffered financial losses for years.

“All okay,” said a source yesterday when asked whether the Cabinet approved the plan.

The plan will include shaving off thousands of jobs, putting in place opportunities for retraining staff and drawing up retrenchment packages. About 30% of MAS’ workforce of 20,000 may be trimmed under the restructuring exercise.

The Malaysian Insider had earlier reported that the plan also included roping in top foreign executives to help turn around the carrier.

Apart from staff cuts, the latest plan will see the carrier dropping unprofitable routes and scaling down flight frequencies as well as reviewing lopsided contracts signed with various stakeholders.

MAS is due to release its second-quarter financial results today, while its majority shareholder Khazanah is expected to reveal a new rescue plan for the loss-making carrier tomorrow.

The carrier has undergone three restructuring exercises since 2007 which had failed to yield any results due to a bloated workforce, changing market demand, stiff competition and high overhead costs.

Meanwhile, Axiata Group Bhd chief executive officer (CEO) Datuk Seri Jamaludin Ibrahim said none of the group’s top executives are leaving, dismissing news reports that Khazanah may turn to Jamaludin or Celcom Axiata Bhd CEO Datuk Seri Shazalli Ramly to lead MAS as it revamps its business.

“Everybody is staying where they are,” he told a news conference yesterday after announcing Axiata’s financial results for the second quarter of 2014.

“No, there is none. We (Axiata) have a pretty much stable management team,” said Jamaludin, when asked if there will be any movement of top executives at Axiata.

Jamaludin, however, said the group has a general plan should any changes occur.

“In general, we have got a good succession plan. But I am not referring to Shazalli, I should stress that,” he said in jest.

Khazanah is reported to be looking at several potential candidates for the top job at a reconstituted MAS. Besides Jamaludin and Shazalli, other names that cropped up included Minister in the Prime Minister’s Department Datuk Seri Idris Jala, who served as MAS CEO between 2005 and 2009.

Idris had twitted last Thursday that he was not returning to MAS and will continue serving as CEO of the Performance Management and Delivery Unit, a position he assumed in 2009 following his appointment as minister.

This article first appeared in The Edge Financial Daily, on August 28, 2014.