MAS $794m to revamp business<\/p>\n
Associated Press, Kuala Lumpur<\/p>\n
National carrier Malaysia Airlines needs 3 billion ringgit
\n(US$794 million) to restructure its operations after posting two
\nstraight quarters of losses, reports said Wednesday.<\/p>\n
This was conveyed by the airline's top management during a
\nbriefing to a group of senators late on Tuesday on plans to bring
\nthe airline back into the black, Senator Puad Zarkashi was quoted
\nas saying by national Bernama news agency. No details were given.<\/p>\n
It is unclear if the 3 billion ringgit is in addition to
\nMalaysia Airlines' cash balance of 1.42 billion ringgit ($376
\nmillion) as of Sept. 30.<\/p>\n
Airline officials were not available to confirm the report.<\/p>\n
Prime Minister Abdullah Ahmad Badawi earlier this month said
\nthe government - which owns 69 percent of Malaysia Airlines - is
\nprepared to lend money to the loss-making carrier but that any
\nfinancial help should not be considered a handout.<\/p>\n
Puad said the senators were told only 33 out of the airline's
\n79 routes to Europe and Latin America were profitable.<\/p>\n
He said airline executives also admitted paying an exorbitant
\n1.56 million ringgit ($413,000) for three paintings to adorn
\noffices and 1.3 million ringgit ($344,800) for consultancy
\nservices, which critics said contributed to its hefty losses.<\/p>\n
The airline's new managing director, Idris Jala, who started
\nwork Dec. 1, was quoted as saying that he briefed the senators on
\na proposed roadmap for recovery, which include cash conservation,
\nprofit turnaround and work force management.<\/p>\n
\"We are working on finalizing the details. By late February
\n2006, we will announce our full year results as well as details
\nof the turnaround plan,\" he said.<\/p>\n
He said the company is examining ways to boost yields on
\nunprofitable routes but there are no plans yet to downsize its
\n9,000-strong work force.<\/p>\n
Malaysia Airlines posted its second straight quarterly loss of
\n367.7 million ringgit ($97.53 million) in the quarter through
\nSeptember, a sharp reversal from a net profit of 132.7 million
\nringgit ($35.1 million) in the same period a year earlier.<\/p>\n
Results were also worse than the 280.7 million ringgit ($74.45
\nmillion) loss in the quarter through June.<\/p>\n
Analysts said the airline - which operates one of Southeast
\nAsia's biggest passenger plane fleets with about 100 aircraft -
\nhas been hit by poor management, escalating operating and fuel
\ncosts, and stiff competition in the region.
\n` Malaysia Airlines recently raised fuel surcharges aggressively
\nand has deferred indefinitely plans to fly to six new Indian and
\nChinese destinations. Reports said it may raise airfares next
\nmonth on all routes to cover its losses but the airline has
\ndeclined to comment.<\/p>",
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