New Straits Times 06 April 2001

MAS’ operations likely to be split
By Johannes Ridu johann@nstp.com.my

MIRI, Thurs. — Malaysia Airlines operations are likely to be split into international and domestic entities under a proposal being considered by the Government.

Transport Minister Datuk Seri Dr Ling Liong Sik said the proposal was aimed at making the airlines
profitable while at the same time enable it to safeguard national interest by not raising domestic air

Speaking to reporters after attending a briefing on the progress of the RM230 million Miri Airport extension project, here today, he said: “(This will pave the way) for its international sector to find (foreign partners to enable it to operate profitably) without having to subsidise its domestic sector as we are doing now.”Dr Ling said the Government would then be able to control the domestic fares and set a price that

would be “fair to the people” especially those highly dependent on air transport.

However, he was non-commital on whether the Government would continue to subsidise fares of Ma-

laysia Airlines’ domestic sector which is said to be making huge losses under the airlines current or-

ganisational set-up.

The Government, he added, was actively “toying with the idea of splitting Malaysia Airlines opera-


It would make its decision on whether or not to adopt it after a comprehensive study on the matter

is completed.

Dr Ling said the proposal would neccesitate the Government to reassess the current airports’ infra-

structure and alternative transport infrastructure.

The Minister said economic conditions prevailing in different parts of the country were also factors.

He also said the public should not expect the decision on the matter to come soon, saying the Government would take a cautious approach and “will not rush it (decision).”

The Government, which bought back the controlling share in the airlines from Tan Sri Tajuddin

Ramli earlier this year, is under pressure to turn around the company’s sliding fortunes.

But national interest often stands in the way to let the airline operate as a truly business driven and profit-oriented airline.

MAS’ attempts to raise domestic fares, for example, were rejected as it would adversely affect national integration efforts between Peninsular Malaysia and its two eastern States of Sabah and Sarawak.

The Sarawak and Sabah governments, for instance, have also been opposing plans to raise domestic

fares including the air-fares for rural air services operated by the airline.

The airline’s new management inherited debts amounting to RM8 billion, versus RM2 billion in share-

holders’s fund, following the Government take-over.


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