MP: Unions obstructing MAS turnaround with “unreasonable demands and threats”

KUALA LUMPUR, Malaysia – Employees’ unions in Malaysia Airlines (MAS) have come under fire from one of the country’s longest-serving Members of Parliament for obstructing efforts to turn around MAS with their “unreasonable” demands and threats.

Dr. Tan Seng Giaw, the eight-term MP for Kepong, said the “MAS saga” had been going on for far too long for well over 40 years with the unions getting stronger to the detriment of the ailing national carrier itself.

“As the unions have been long established, they have been making incredible demands. If we have unions that don’t understand the airline industry situations today, MAS cannot survive. If they make too many demands, how can MAS survive?,” asked Dr Tan, who is Deputy Chairman of Parliament’s Public Accounts Committee (PAC).

Among other things, the MAS Employees Union of Peninsular Malaysia (MASEU), the biggest of several unions in MAS, recently threatened to strike if its demands to remove key management executives of the airline and for the government to intervene in the airline were not met.

MASEU is unhappy with the management’s attempt to restructure MAS that include the rumoured sale of its engineering division and other non-core businesses.

In 2011 and 2012, MAS’s unions also protested against a merger between the airline and AirAsia, a deal which was welcomed by many quarters as a fresh start for MAS, including by former prime minister Tun Dr Mahathir Mohamad.

Bowing to union pressure, in May 2012, the two airlines unwound the merger.

Dr Tan said whatever demands made by the unions should take into account the airline’s interests and must commensurate with its financial performance, productivity and returns.

“If the demands and threats undermine MAS, and if they result in the collapse of productivity, how could MAS perform? So I would say they are illogical and destructive to everyone, not only to MAS but the image of Malaysia as well.

“And this has been going on for too long and I think enough is enough,” he said.

Elaborating on the unions’ threat to go on strike if the key management was not changed, Dr Tan said both the management and unions ought to strike an amicable solution in the interest of both sides and for national interests.

He said the unions’ demands should take into account parallel demands made by unions in countries like Singapore, Indonesia, South Korea and Britain.

“We need to compare these demands with other unions in the country and worldwide, whether they are reasonable or not. What would the unions gain if they got what they wanted only to have MAS go under?” asked Dr Tan.

MAS reported a loss of RM1.17 billion last year and was in the red to the tune of RM443 million for the first quarter (Q1) of 2014, far deeper than the RM279 million loss in Q1 of 2013.

Khazanah Nasional, the majority shareholder of MAS, has also announced that it would require six to 12 months for a restructuring plan for the airline and all options were being considered.

Dr Tan is also against any further bail-out for MAS, saying such a move has never been the way forward for any company.

The culture in MAS of depending on government subsidy should stop, given the fact that Khazanal Nasional had so far injected RM5 billion of taxpayers’ money with no signs of the airline turning around, he said.

“And everytime we change the CEO (Chief Executive Officer), we don’t see any improvements to the extent that MAS at one point had debts of RM8 billion. If we continue this kind of government subsidy and assistance, we will never ever get a viable national airline,” he added.

Dr Tan also said that the search for a future MAS CEO must take into account the best person for the job without looking at colour or creed, and it has been proven by other airlines which had turned around successfully while MAS continued to fail.