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As our national carrier, the Malaysian Airline System, MAS, has a chequered history. Last year, the Government bought its controlling shares at RM8 instead of the market price of over RM3 per share. There was a furore.

Now, MoF uses its subsidiary, Aircraft Business Malaysia Sdn Bhd (ABM), to buy eight aircrafts from MAS for RM4.1 billion. Then, MAS will lease these aircrafts for 12 years. Of the 8 aircrafts, 3 are existing B747-400, 3 newly acquired B747-400 and 2 B777-200.

>From where is MoF getting the money? Borrowing from the banks, Employees Provident Fund (EPF) or Petronas? EPF has total resource of RM186 billion.

SALE/LEASEBACK

It is difficult to understand the sale and leaseback formula of the airline
industry. Besides, MAS may use the same formula with its head office, Jalan Sultan Ismail, Kuala Lumpur, office complex, Subang, MAS Academy, Kelana Jaya and MAS complex KLIA at RM2 billion. The airline industry is complicated.

The sale and lease for MAS total RM6.1 billion. If the deal is successful,
its total borrowing of RM9.2 billion will be reduced to RM6.3 billion,
saving the interest by RM167 million a year.

MAS may also sell its catering division. We do not know what MAS Catering Sdn Bhd has in mind.

The Government uses billions to bail out MAS. If we run the airline
professionally, it will be a healthy company, providing a good service.

Dr Tan Seng Giaw