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MAS versus SIA — the truth is painful, but you cannot have a successful solution without an honest assessment

Tong Kooi Ong & Asia Analytica
Tong Kooi Ong & Asia Analytica • 14 min read
MAS versus SIA — the truth is painful, but you cannot have a successful solution without an honest assessment
The Absolute Returns Portfolio ended 0.5% lower for the week, paring returns since inception to 12.5%. Photo Credit: Bloomberg
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How and why did Malaysia Airlines (MAS), the flagship carrier and pride of the nation, end up being the disaster that it currently is, after multiple bailouts that cost taxpayers tens of billions of ringgit? Khazanah Malaysia is reported to have sunk RM28 billion into MAS between 2000 and 2020 and had, at end-2020, committed to put in RM3.6 billion till 2025.

That must be the question in the minds of many Malaysians. That MAS is in financial trouble is nothing new. The airline has been mired in huge losses for the better part of the last 30 years. It has had multiple changes of CEOs, who had attempted unsuccessfully to turn the company around. But the recent string of emergency landings and flight diversions due to technical issues and a surprise audit by the Civil Aviation Authority of Malaysia (CAAM) that led to the shortening of its air operator certificate (AOC) from three years to only one year must surely be a new low for the national carrier.

The audit identified serious problems ranging from lack of skilled workers for aircraft maintenance and shortage of critical parts, which led to MAS announcing a temporary 20% reduction in flights and routes. Transport Minister Anthony Loke said that the airline would have to provide monthly reports to CAAM, detailing the implementation of mitigation measures on the issues raised in the audit report.

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