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The Malaysian Government Would Have To Tell The People What It Intends To Do With The Request By MAS To Increase Domestic Fares By 50% Part 1 of a series of comments by Dr Tan Seng Giaw, DAP National Vice-Chairman and MP for Kepong on the difficulties faced by the Malaysian Airline System, MAS. 6 August 2000. | |||||||
| The Malaysian national carrier, MAS, has been facing problems especially after the July 1997 economic crisis. Like some other airlines, it has incurred international and domestic losses. What is the Government going to do about it? We need a reliable national airline to carry increasing number of passengers and cargoes. MAS has been the hope in taking us into this new millennium in which air transport will be more important. This is one of the reasons for building the multibillion Kuala Lumpur International Airport, KLIA, in Sepang, Selangor. The Government had a controlling stake in MAS. By mid 1994, it decided to privatize the airline as it had done in 434 projects since 1983. Businessman Tan Sri Tajudin Ramli has acquired the controlling stake, 29% equity, from the Malaysian Central Bank for RM1.79 billion. Tajudin has a big plan for MAS. Then, the economic crisis has struck. In the 1998/1999 financial year, MAS had a pre-tax loss of RM669.73 million and in 1999/2000 RM236.89 million. The airline has always suffered losses in domestic flights. It loses about RM1 million daily | |
or about RM360 million annually. This privatization project has hit a snag. If MAS does not restructure, how long can it go on? What has Tajudin in mind? Is the Government going to do what it has done to Indah Water Konsortium, IWK, the national liquid waste privatization project that has experienced serious losses. The government has taken back IWK at the expense of the taxpayers. Quoting many reasons including comparatively low domestic fare, MAS has proposed 50% increase in domestic fares. Apparently, Malaysia domestic fare is 32.5 sen per kilometre, Km, compared to 40.6 sen Thailand, 51.3 sen C, 52.5 sen Philippines, 95.6 sen Indonesia and 126.3 sen Japan. As aircraft fuel increases in price, the RM remains pegged at US$1 to RM3.80 and the losses are huge, the Government would have to do something about MAS. We keep an eye on the airline within and outside Parliament. The Government would have no choice but to make up its mind on the MAS's request to increase its domestic fares by 50%. Would it take back the controlling stake from Tajudin? Would it allow the request?
Dr Tan Seng Giaw | |||||
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