Friday October 19, 2012
Meeting with MAS unions and associations; is it for privatisation?
Friday Reflections - By B.K. Sidhu
TWO weeks ago, more than 30 representatives from the eight unions and associations at the national carrier met with the airline's former managing director Tan Sri Abdul Aziz Abdul Rahman.
It is unclear who called for the meeting but it took place at a hotel near Malaysia Airlines (MAS) office in Subang.
The agenda was to discuss the “goings-on” in the industry.
But possible privatisation of the airline was also discussed.
The talk about MAS possibly being taken private is not new; it is a long standing rumour and several names have been linked to it including Nadi Sdn Bhd boss Tan Sri Ahmad Johan who recently set up Malindo Airways with Indonesia's Lion Air.
There is going to be a second meeting.
Those who attended the first meeting have been told to keep themselves free on either Oct 28 or 29 for a second session with Aziz.
The venue has not been decided and the agenda unknown.
However, those in the know are saying it has something to do with privatisation.
Officially, there is no word on taking MAS private but the unions/associations are being courted.
Perhaps the interested parties want to make sure they have the “buy-in” from the unions/associations in the event of privatisation.
Why the unions/associations? To recap, this was the group that objected furiously to the share-swap deal with AirAsia.
Perhaps the “buy in” is seen as necessary but past successes did not guarantee future achievements.
Whatever the agenda, the crux of the matter is that MAS is in a turnaround mode.
Those in charge of the turnaround should be given enough time to make it happen so that there is tangible results and value accretion.
MAS will be part of the oneworld alliance by year-end which promises more passengers and more routes.
And the airline will have one of the newest fleets as it takes delivery of new aircraft, and with all the positives, there is a higher price to pay.
From all “sell” calls on the airline, there are two brokerages - Maybank Investment and OSK Research - that have called a “buy” on the stock.
Although the return to profitability is still distant, the break even point could well be in the third quarter of this year, according to Maybank in its report.
Whether another privatisation is good or bad is really up to those who know what is best for the airline, but whoever is plotting the future flight path should take a page from the previous privatisation and see whether it is really a fantastic idea.
What value can this group bring to the table and how much better can the airline be?
Do they have the expertise and more importantly, do they have the financial muscle, or are they only interested in the engineering and maintenance units, which have all the accreditation and certifications?
Privatisation is a nice thought but is it really do-able at this juncture and can it create value?
That is a major consideration and whatever good intentions some may have, they have to think hard this time around.