Aptly named “The Malaysian Insider” has released breaking news that a restructuring for Malaysia Airlines (MAS) is in the works …….. that will also feature (surprise, surprise) Snake in Suit, Air Asia’s Tony Fernandez! 

Recently, Malaysia Airlines appointed Tan Sri Md Nor Yusof as chairman in place of Tan Sri Munir Majid.

Tan Sri Md Nor was the Managing Director of MAS when it embarked on its “WAU” i.e. Widespread Asset Unbundling exercise in 2002 which essentially saw the Malaysian government bailing out the company by taking over MAS’  liabilities (and the planes).

The planes were then leased back to MAS.

Essentially this helped prevent MAS from ‘going under’ due its heavy repayment obligations.

If you can recall, the “WAU” was the brainchild of a boutique adviser called BINA FIKIR, whose main owner, Azman Mokhtar, is now the Managing Director of Khazanah, the investment arm of the Malaysian government.

So why is MAS requiring to be rescued again in less than 10 years after being bailed out by the government?

With the government company, Penerbangan Malaysia Berhad, taking over the financial burden of MAS, should MAS be requiring another rescue notwithstanding the competition from the likes of other airlines and Air Asia?

Singapore Airlines is still profitable inspite of the global competition for passenger traffic.

MAS, like Singapore Airlines, has got a good brand …….. has been winning awards every year ….. had a ‘great’ MD in Idris Jala who is now Malaysia’s Minister in charge of its Performance Management & Delivery Unit ……. so why is it still in the doldrums?

One basic problem is that when individuals are put to helm these companies, the limitations placed on them are so enormous that it would have been IMPOSSIBLE to get those companies out of the quagmire! Click HERE for an elaboration.

Idris Jala was smart enough to jump ship after (I was told) painting a rather rosy picture of a company that he is leaving behind!

Maybe Idris Jala can reply to the many questions from this deal as asked by the MP from Wangsa Maju. Click HERE

And when these companies implode, the powers to be quickly carry out stop-gap measures …… not so much to address the fundamental issues ……. but to hide the obvious embarrassing issues that caused its demise in the first place.

In MAS’ case, Tony Fernandez appears to have been ‘directed’ to do the necessary by covering up the ‘shame’!

After all, his company’s shares have been supported strongly by the government agencies e.g. EPF that from a meek price of about 70 sen, Air Asia’s share price is now touching RM4.00.

On another note, MAS’ predicament also appears to be due to the tight-fisted position of the Malaysian government ….. resulting in Penerbangan Malaysia Berhad being unable to continue supporting MAS.

This may explain why MAS’ latest accounts surprisingly show planes worth RM6.0 billion in its books and financed by borrowings.

Under the WAU arrangement, the planes are to be in the books of Penerbangan Malaysia Berhad, not MAS!

Is Tan Sri Md Nor Yusof’s appointment actually to protect the banks’ loans (presumably including CIMB) to MAS?

It surely doesn’t make good reading for the financial position of Malaysia’s government coffers ….. especially when the United States of America’s financial standing has just been down-graded from AAA to AA+ by a rating agency.

Click HERE for The Malaysian Insiders take of the airlines’ share swap.