KL set to unveil new partner for MAS

KL set to unveil new partner for MAS

KUALA LUMPUR (AP): The Malaysian government will announce a
new partner for the financially troubled national carrier by the
end of January, a news report said on Tuesday.

Five or six candidates, including some foreign airlines, were
being considered to take a stake in Malaysian Airline System, or
MAS, Donald Lim, parliamentary secretary to the Transport
Ministry, said.

"It is hoped discussions between all relevant parties can be
completed by the next two weeks before we announce the decision,"
Lim was quoted as saying by The Sun daily.

Officials from the Transport Ministry and MAS could not be
immediately reached for comment.

The government, which has a controlling interest in the
company, early last month purchased a 29 percent stake in the
airline from a well-connected tycoon for 1.79 billion ringgit
(US$471 million).

Opposition leaders have accused the government of cronyism for
paying the same share price that MAS was sold for in 1994 at 8
ringgit ($2.10) per share. The current price is half that.

Swissair and Australia's Qantas Airways have expressed
interest in buying a stake in MAS, but Prime Minister Mahathir
Mohamad has implied that the government may not want to sell to
foreign investors.

Mahathir hinted that a foreign airline would have to meet
"social obligations," which could mean keeping fares for domestic
routes low and limiting job layoffs.

The MAS employees' union Tuesday urged the government not to
sell a controlling stake to any individual or foreign company.

"We do not want to come to a situation where MAS is controlled
by foreigners or faces closure," Alias Aziz, the union's
president, was quoted as saying by the national Bernama news
agency.

Mandated low fares on domestic routes and a shrinking share
market have been cited as reasons for the airline's financial
woes over the past four years. MAS racked up losses of 700
million ringgit ($184 million) in the last fiscal year.