KUALA LUMPUR (Bernama) – The proposal by Jentayu Danaraksa Sdn Bhd to acquire all aircraft from Penerbangan Malaysia Bhd (PMB) to set up its own aircraft leasing company and employ all the 6,000 staff expected to be made redundant under the restructuring plan to save Malaysia Airlines (MAS) does not make business sense, a group chief executive officer (CEO) said today.
Ahmad Zakie Ahmad Shariff, Group CEO of Perbadanan Menteri Besar Kelantan (PMBK), said even GE Capital Aviation Services, the world’s largest aircraft and engine lessor and lender which owns over 1,600 aircraft, only employs about 500 staff.
“How can Jentayu accommodate the 6,000 staff to manage an operation of less than 150 aircraft? That is business nonsense. Isn’t that also giving false hopes to these MAS staff?,” he said in response to Jentayu’s RM8.75 billion offer to buy PMB from Khazanah Nasional Bhd as its complementary proposal to Khazanah’s 12-point restructuring plan.
Ahmad Zakie who is an economist pointed out that it was not a matter of retraining these staff because there would definitely be a mismatch between staff and core competencies required for an aircraft leasing business.
“It’s two different worlds altogether. MAS is a customer-intensive business while aircraft leasing business requires a great amount of financial skills. Again, should this aircraft leasing business fail, wouldn’t the government has to once again bail out its national assets?” he said.
Jentayu’s plan for the new company (NewCo) to be set up to run MAS, Malaysia Airlines Bhd (MAB), is one of 28 proposals submitted to Khazanah since the announcement of MAS’ privatisation and its delisting from Wednesday, December 31.
He likened the sale and leaseback of aircraft under the Jentayu plan to removing both assets and liabilities off the books and merely a financial restructuring which might temporarily resolve balance sheet and cash flow problems but not the core issue.
He said this was already done via the asset and liabilities restructurings in 2002 aimed at turning MAS into an “asset-light” airline but these were only a stop-gap measure while what the airline really needed was an overall “operational fixes” which were being done now.
Ahmad Zakie used the analogy of a patient with heart blockages to articulate his point – taking the necessary pills or perhaps an angiogram or bypass will somewhat allow this patient a lease of life.
This is only temporary if the patient does not change his lifestyle, eating right with proper exercises. It requires a complete change in how a person “runs” his life or risk the danger of the plaque build-up in his coronary arteries once again, thus having to repeat the same “restructuring” process.