Analysts: Good Start In Khazanah Move To Revamp Malaysia Airlines

By Noor Soraya Mohd Jamal KUALA LUMPUR, Aug 30 (Bernama) -- Khazanah Nasional Bhd's move to revamp Malaysia Airlines (MAS) is a good start to turn around the national carrier to profitability, said analysts. Adrian Ng, analyst at Kenanga Research said although it was good that MAS has a plan, it would actually be quite tough to achieve the profitability target by end-2017 amid a very competitive aviation industry. "I think MAS would do a very good job if they can break even in 2017," he told Bernama. Khazanah's Managing Director, Azman Mokhtar, when tabling the recovery plan said MAS was expected to return to profitability in three years after its delisting at the end of 2017 and relisting possibly in 2018 or 2019. Ng said the recovery plan was much anticipated, including the downsizing, restrategising and rationalising routes. "What MAS is planning is almost similar to what Japan Airline did but they don't have to compete with budget airlines during that time," he added. Ng said the next strategy for MAS was to go to untapped routes and think out of the box. "But the good news is the Gen Y market. The younger generation is more likely to move around and travel and among the factors to look at are pricing and product strategy, as well as focus market," he said. Another analyst, who does not wish to be named, said at first glance, Khazanah is seen as at least making the right move to tackle the cost structure and bloated staff costs, which had always been among the reasons dragging MAS’ performance. "On paper, the planning is good. It addresses the key issues that market have been discussing on MAS, which is the cost," he said. He said MAS would be a lot leaner after the downsizing. MAS' current fleet was one of the best and youngest and very efficient, he said, and if the new team could tackle the cost and implement the restructuring plans effectively, it would be positive for the airline. "But whether new team can swing MAS back into black or not, the execution is the key factor," he said. Meanwhile Mercury Securities Head of Research, Edmund Tham, said the recovery plan was a good start to turn around the national airline to profitability. "It is hard to say whether the plan would be successful as it would take months and years to work out," he said. He said the announcement, however, was expected to give minimal impact to the stock market sentiment. Khazanah Nasional Bhd is the Government of Malaysia's strategic investment fund. --BERNAMA