PRIME Minister Najib Razak today blamed flag carrier Malaysia Airlines’ woes on bad decisions by a former prime minister, whom he did not name.

The national airline was privatised in the 1990s by then prime minister Dr Mahathir Mohamad, but the government had to bail it out of losses. Years later, Najib facilitated a short-lived share swap with low-cost carrier AirAsia. 

“We have been through tough times. MAS history has been filled with decisions made in the past that I consider as among the worst. 

“It has been a nightmare for MAS. And was caused by a former prime minister,” Najib said in his continuing attack against Dr Mahathir at the airline’s Hari Raya open house in Kuala Lumpur. 

He did not name the prime minister but it is widely believed to be Dr Mahathir, his political godfather and mentor turned arch-critic and nemesis.

Dr Mahathir had engineered a privatisation deal in 1994 that saw tycoon Tajuddin Ramli taking a RM1.79 billion loan to buy a 32% majority stake in MAS.

MAS had an initial good run under Tajuddin’s leadership, recording a record-breaking RM333 million profit in the financial year 1996/1997. But it took a hit upon the onset of the Asian Financial Crisis of 1997, with a loss of RM260 million.

Tajuddin ended up selling his stake in the ailing airline to the government for the same price he paid in 1994 – RM1.79 billion, or RM8 a share — in 2001 even though the company’s closing share price at the time was RM3.68.

Since then, the national carrier has continued to bleed red ink, despite occasional glimpses of a turnaround under Idris Jala, who was appointed CEO in 2005.

In 2011, Najib proposed a share-swap with low-cost carrier AirAsia. The deal would have seen the low-cost carrier’s main shareholder, Tune Air Sdn Bhd, get 20% of the national airline.

The move was to enable MAS to become a premium carrier while AirAsia would reign in the budget air travel sector.

That deal was called off the following year, as Najib faced the 13th general election and growing discontent from MAS’ labour union.

MAS was reported to have suffered RM7.3 billion in losses since 2011. 

This was combined with the incidents of flight MH370, a Boeing 777, going missing on the way to Beijing, and another Boeing 777, flight MH17, being shot down in eastern Ukraine.

Najib vowed to restore MAS to its former glory of being a leading domestic airline.

He said MAS had recorded a fine performance recently and was expected to be debt-free next year.

“This follows the RM6 billion MAS Rehabilitation Plan announced by Khazanah – MAS’ major shareholder – in 2014.

“Alhamdullilah, the rehabilitation plan has borne fruit as the first phase is to stabilise MAS’ finances and that we have achieved.

“And I have received confirmation from (chief operating officer) Peter Belew that he expects MAS to be debt-free by next year.”

Najib said the rehabilitation plan will enter the second phase which focuses on the opening of 11 flight routes to China, revaluation of all MAS products such as its food, inflight entertainment, and quality of airplanes.

Under the MAS rehabilitation plan, 30%, or 6,000, of the employees, were retrenched.

Najib said 98% of those who had registered for employment opportunities had found jobs.

“This suggests that we have achieved what we set out to do.

“With these measures in place, I believe MAS is able to achieve Skytrax’s 5-star rating by 2018.” – July 10, 2017.