Analysts unmoved by talk of Khazanah-Tune Air deal reversal

KUALA LUMPUR: Analysts are unimpressed by news of a possible reversal of the share swap between Khazanah Nasional Bhd and Tune Air Sdn Bhd, saying it is unlikely the government will shoot itself in the foot.

"We don't think under the current climate of impending elections and the government focusing on getting itself re-elected it will take on the mammoth task of explaining the reversal of the share swap," an analyst who declined to be named told Business Times.

If anything, he said MAS' deputy chief executive officer Mohammed Rashdan Yusof may become the sacrificial lamb in an effort to appease the employees of MAS.

A local news blog reported yesterday that among MAS' employees' grouses were of Rashdan's management style.

According to union sources, they are yet to have its second meeting with Prime Minister Datuk Seri Najib Razak after its initial meeting in mid February.

"The Prime Minister seemed receptive and genuine in understanding our concerns and asked a lot of questions," one union source said.

A lack of direction from the new management was one of the union member's main grouses.

"For example, one week the management was telling us that we were moving to Kuala Lumpur International Airport and another week we were told we were moving across the road ... It is things like this," he said.

On talk of a possible privatisation exercise, the same analyst said that ship sailed about a year ago.

"About a year ago valuations were low and the market had available funds for such an exercise. Now that is not the case," he said.

Another analyst who also declined to be named concurred that a reversal of the share swap is unlikely.

"Even though there has been no meaningful collaboration between MAS and AirAsia Bhd so far, it does make local carriers stronger to deal with outside competition. I see this news as just a move to appease the unions but don't expect anything to come out of it," he said.