behalf of my colleagues on the Board of Directors of Malaysia Airlines,
I wish to place on record our commitment and support for the Management
Team of Malaysia Airlines, led by Group Chief Executive Officer Ahmad
Airlines recorded a significant net loss of RM2.5 billion in 2011, at a
crucial juncture in time when airlines globally are challenged by
intense competition, high fuel costs and spreading economic
negative factors for the global airline industry have been building up
over several years. In the last decade, numerous national carriers have
failed because of this changing environment and finding a viable and
sustainable business model has been a challenge. Certainly, the market
is punitive for those airlines on a weak footing.
Board identified structural weaknesses in Malaysia Airlines in early
2011 and initiated a series of proactive measures to contain losses and
strengthen the company for recovery and sustained future performance. A
key foundation stone of this plan was the August 2011 Comprehensive
Collaboration Framework (CCF) involving a share swap between Khazanah
Nasional Berhad and Tune Air, a
collaboration agreement between Malaysia Airlines, AirAsia and AirAsia
X, and a restructure of the Malaysia Airlines Board and Management Team.
to these changes, the Board and Management Team has endorsed a Business
Plan for the recovery and sustained future performance of Malaysia
Airlines. This is our top priority.
Board is confident that the CCF will benefit both Malaysia Airlines and
AirAsia by promoting synergies in many areas. Already, we are in the
process of setting up joint-venture companies for procurement and
training and a potential maintenance service provided by Malaysia
Airlines Engineering for the AirAsia fleet.
would like to be very clear in stating that the share swap is not part
of the acute financial problems at Malaysia Airlines, it is part of the
solution. Likewise, the collaboration agreement between Malaysia
Airlines and AirAsia is not part of the acute financial problems at
Malaysia Airlines. It is part of the solution.
is a small nation on the world stage, but we have the benefit of two
national champions in aviation. Our ultimate belief is that we have the
opportunity to promote two national champions and build economies of
scale that will benefit Malaysia Airlines and AirAsia and Malaysian
consumers. By strengthening Malaysia Airlines, we put the company back
on its feet and give it a secure future.
am writing in such a forthright manner because I have noted that our
Business Plan has not been accepted by all of our stakeholders and has
in fact met with turbulence in some sectors. This turbulence has the
potential to distract the attention of Malaysia Airlines' Management
Team and its 20,000 staff from the very crucial task at hand. That task
is our top priority. It is the economic recovery and sustained future
performance of Malaysia Airlines.
know that Malaysia Airlines has a long history, and a special place in
the hearts of many Malaysians. However, I ask you to take a long, hard
look at the position of Malaysia Airlines in the intensely competitive
global aviation business.
Airlines must be allowed to focus on pulling itself out of its current
financial crisis. Key initiatives in the Business Plan that will be
undertaken within the next six months include strengthening revenue
management, the launch of a new regional short-haul premium airline and
the introduction of the new flagship Airbus A380 to our fleet. The
company also needs to strengthen its balance sheet urgently and various
options are being considered. At the same time, we will continue to work
closely with the Malaysian Government to balance our commercial
instincts and financial pressures with the Government's wider interests.
judge us on the results we deliver with our Business Plan, but please
give the Management Team sufficient time to implement the Business Plan
effectively. Similarly, to pass judgment on the CCF in general or the
share swap in particular is premature at this juncture.
Airlines is a very sick patient, and its condition is quite critical.
Indeed, there are a full range of prescriptions available. Judge us by
the result, not by the choice of prescription.
This announcement is dated 19 March 2012.