A Matter Of Pride: What Malaysia Airlines Needs To Do To Have A Future

Emergency workers at the crash site of MH17 last month. Photo: Getty / File

MH370 remains a tragic mystery. MH17 is just tragic. A passenger jet flying an approved route at an approved height apparently shot down by a missile. It could have been one of a number of airlines but it was Malaysian.

Andrew Stevens.

After two catastrophic events within a little more than four months the question is how can MAS – can any airline – recover from that sort of event.

I think it can and it will, for two reasons. One is an upsurge in national support for the airline. An overwhelming number of Malaysians I spoke to in Kuala Lumpur in the days following the destruction of MH17 said they had no hesitation flying with MAS. In fact, many thought it was now their duty to support the company. On the streets you hear an almost stoic acceptance of the fate of MH17. It was just in the wrong place at the wrong time, the company not to blame and it needs our support.

Call it perhaps the Qantas syndrome. The Australian carrier has an impeccable safety record but is under commercial attack from just about every angle. It’s shrinking, it’s losing money, its customers complain and its competitors are circling. But what will help keep it in the air is its place in the country’s fabric. It’s more than a company, it’s an institution. It’s ours.

Even the unresolved question of MH370, which disappeared into thin air on the night of March 8, is seen by most Malaysians I speak to as a tragic accident rather than an issue of airline incompetence or worse.

A bedrock of local support is a good start, but only a start. The biggest advantage MAS has is that it is state-owned. The state investment arm Khazanah Nasional holds a 69% controlling interest — one of dozens of investments Khazanah has totaling about $40 billion. It means the Government has deep enough pockets to bail out MAS, or more likely to fund a major restructure.

Speculation is growing that a major revamp is imminent. If so, MAS will join a list of Asian carriers that have been forced to restructure and in some cases re-brand following crashes. Japan Airlines, China Airlines and Korean Airlines have all been through it.

In the late 1990s KAL suffered three crashes in the space of six months, two of them involving fatalities.

That led to a full scale but low profile restructure. The German carrier Lufthansa was drafted in to help re-train pilots, the hiring policy was changed away from ex-military staff, management was overhauled and the entire culture of the airline was re-worked. It took years but eventually KAL had enough confidence to unveil everything it had done and even then it took several more years to prosper. But prosper, it did.

Malaysian Airlines is already midway through a program to freshen up and fundamentally change the look of its livery. Both 777s downed were painted in the original colors so a fresh look may help distance the airline from the enduring images of pieces of fuselage in a Ukrainian wheat field. As for changing the name, that can be a dangerous move. It’s just too easy to see it as a cheap fix that doesn’t go to the core of the issue.

As in the case of KAL, analysts say that a root-and-branch restructure is needed at MAS. Everything from new management, less government interference, a slimmed down workforce and less powerful union have been demanded. Now would be the obvious time to do it.

According to Malaysia-based aviation consultancy Endau Analytics, MAS could be losing between one and two million dollars a day. It can stay afloat for perhaps another six months on its reserves of cash but there seems little point just hanging on.

There is, though, a third way. Geoffrey Thomas, the Australian-based aviation journalist and founder of airlineratings.com says don’t be surprised if Air Asia steps into the mix. The budget carrier, owned by Tony Fernandes, has already been linked once with MAS and Fernandes’s operation has been phenomenally successful as the first true pan-Asian low cost carrier. It carries no legacy issues as many of the traditional carriers do and taking MAS into its operations sphere could be a simple solution.

Whatever happens, the pain at MAS over what has happened in the last few weeks will continue. And those wounds will be re-opened when the first piece of wreckage from MH370 is found, as it eventually will be, and as we learn more about the truth of MH17’s fate.

But for Malaysians it may well become a matter of national pride to keep its flag carrier aloft.

Andrew Stevens is a CNN anchor/correspondent based in Hong Kong.

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