PM: MAS restructuring not bailout but investment (Updated)

KUALA LUMPUR: The RM6 billion restructuring plan for Malaysian Airlines (MAS) is not a bailout but an investment for Khazanah Nasional, Prime Minister Datuk Seri Najib Abdul Razak (pix) said today.
He said the government has decided that Khazanah must recover every single cent of the RM6 billion in this restructuring plan.
"It is a bailout if we use public money to buy over from somebody else for example. This is not a bailout. In this case the money is injected to make MAS as a going concern," Najib told a press conference after chairing the Umno Supreme Council meeting here earlier.
He said that as the RM6 billion is recoverable, it is then not a bailout but an investment for Khazanah.
"The entire restructuring will take three years but recovery may take more than that. Hopefully in two years we will see positive results," Najib said.
He affirmed that the restructuring plan is buyable because Khazanah is experienced in recovery plans, and said that it must be carried out as a whole.
"If we do not carry out the entire restructuring as a whole, it will not work.
"The restructuring plan is based on a few principles but whatever it is, it must be done in the most compassionate manner," Najib stressed.
He said firstly it needs to ensure that people want MAS to continue existing as the national carrier.
"It must be an aviation company that is based on commercial viability and commercial proposition.
"So if the government wants MAS to fly to a certain destination, in developmental terms, the government should provide subsidy.
"Whatever it is we want the restructuring measures, including the right sizing plan, to be done humanely and compassionately, like providing training for the staff," Najib said.
He also said that a local CEO will be designated but if a foreigner is appointed, it would just be temporary.
Khazanah had reportedly announced a RM6 billion plan to rescue ailing MAS aimed at returning it to profit within three years or by 2017.
The 12-point plan will involve the formation of a new company to take over the assets and business of the old company and a 30% or 6,000 jobs cut.
It was also reported that if and when the airline becomes profitable, it may be relisted.
Khazanah had also stated that other key moves involve the passing of a MAS Act to facilitate staff transfer and to terminate or review contracts which are unfair to the airline.