Najib says RM6 billion for MAS an investment, not bailout

Datuk Seri Najib Razak described the RM6 billion injected to Malaysia Airlines (MAS) by state investment vehicle Khazanah Nasional Berhad as an investment rather than an attempt to save the ailing airlines.

The prime minister said MAS may need more than three years for the restructuring plan to be completed, but there would be positive growth within that period.

“The money has been injected into MAS and we have decided that the RM6 billion must be regained. It is not a bailout. A bailout is when it cannot be regained.

“Khazana will get back every sen from that RM6 billion. This is an investment. Not a bailout,” Najib (pic) said today, during a press conference after chairing the Umno supreme council meeting at the Putra World Trade Centre in Kuala Lumpur.

Khazanah announced that 6,000 jobs will be cut at the national carrier which has lost at least RM3 million a day for the first half of the current financial year.

The state fund, which currently has a 69% stake in the carrier, has injected more than RM5 billion into MAS over the last 10 years.

Yesterday, MAS said its second-quarter nett loss widened to RM307 million from RM176 million a year earlier, though the result was an improvement from the net loss of RM443 million in the first quarter.

MAS warned of poor second-half earnings as passenger bookings continue to fall, with business hit by the shooting down of flight MH17 over Ukraine in July and the unexplained disappearance of flight MH370 in March.

Najib said the job cuts would be done with compassion. And, if there was a need to replace the chief executive officer during this period, opportunities would be given to locals.

“The person can be a local or a foreigner. If it is foreigner, it will only be temporary. A local will then take over,” he said.

Najib said the restructuring plan is only for the betterment of the national flag carrier, and help from Putrajaya was needed to see that being fulfilled.

“We are outlining a few principles such as turning MAS into a flag carrier Malaysians can be proud of.

“We want to ensure MAS remains commercial… every decision made by MAS must take that into consideration.”– August 29, 2014.