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.