11 November 2019

The MAB financial fiasco could go down into the history book as the world’s worst managed carrier

ONE billion passengers were flown last year or about 2.78 million people daily in the US. The country’s aviat ion industry generated US$446.8 billion (RM1.85 trillion) in value, accounting for 5.1% of the world’s largest economy’s GDP.

Malaysia Airlines flights
Malaysia Airlines flights

The Atlanta International Airport handled the most passengers in the world, totalling 107.4 million last year. Another US airport, Chicago’s O’Hare International Airport, managed almost 904,000 takeoffs and landings, making the air hub the busiest in aircraft movements in the world.

Beijing Capital International Airport is the world’s second-busiest aviation hub, handling almost 101 million passengers, with Dubai coming in third.

JFK International Airport in New Year alone handled 5.06 million passengers in December 2018 and managed the movements of 38,322 aircraft. For the whole year, the gateway into North America handled 61,645,258 passengers.

In comparison KLIA and klia2 together handled almost 60 million passengers in 2018, which was not too shabby by global standards.

And Singapore this year opened the Jewel Changi Airport, costing US$1.25 billion with the world’s largest indoor waterfall as part of a nature-themed mall. Certainly, it is a boon period for the sector, especially in Asia.

But the local aviation sector went all to pot in the last couple of years.

The Malaysia Airlines Bhd (MAB) financial fiasco could go down into the history book as the world’s worst managed carrier.

With over RM22 billion in capital injection in the last two decades, largely from government sponsored or guaranteed funds, the national carrier is still bleeding between RM800 million and RM1 billion annually.

Even when global oil prices slumped to as low as US$28 a few years ago, the carrier still failed to record a decent profit. Khazanah Nasional Bhd recently gave various reasons for MAB’s plunge — from the open sky policy to the overcrowding in the local aviation sector for a country with just 32 million people. Simple conjectures to an expensive failure, some may say.

MAB is now waiting for a suitor despite a RM6 billion injection in 2014 from sole owner Khazanah. It has become as dull as a dishwasher.

Even Khazanah has all but given up on the national carrier. It only goes to show, history is as good as a trophy on the shelf, it can be admired and gloated, but it does not dictate the future. The carrier is like a duck out of water and will continue to fly with fumes.

But the shambolic nature of the country’s aviation sector goes beyond MAB. You have these never ending grotty squabbles between AirAsia Group Bhd, Malaysian Aviation Commission (Mavcom) and Malaysia Airport Holdings Bhd (MAHB).

The most recent, AirAsia accused Mavcom of injustices to passengers under the new Regulatory Asset Base (RAB) framework and that the plan works against the spirit of Shared Prosperity Vision 2030.

“Instead of providing more opportunities for all Malaysians and reducing the cost of flying, the RAB championed by Mavcom would, in fact, keep flying out of reach of many, the opposite of what the government is trying to achieve,” AirAsia group president (airlines) Bo Lingam said in a statement recently.

While noble and dignified as it may sound, no businessman gets into business to lose money.

Then there is the equalisation of the passenger service charge (PSC), which is like ringworms to cattle.

Add that to the proposed RM5.2 billion to be spent at KLIA from 2020-2022, largely to replace the baggage handling system, aerotrains and interlining between KLIA and klia2 — the dam of criticisms just burst open.

These endless tit for tats are turning out to be worse than a divorce case of a woman who catches her husband in bed with another woman.

For level-minded travellers, they only want quality services, punctual departures and arrivals, carefree travel and cost that equal the service. While others are flying higher, the local aviation sector seems to have lost the plot, at times gone all wonky, all at the expense of the consumers who are largely fed up with the whole diatribes.

All they want to do is fly.

Mohamad Azlan Jaafar is the editor-in- chief at The Malaysian Reserve.

Source: themalaysianreserve.com

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