The worst isn’t behind any airline. Airlines need to be supported by their governments to survive.
– Akbar Al Baker, chief executive officer of Qatar Airways Ltd
The airline industry worldwide has hit bad weather since the emergence of the Covid-19 virus and ensuing pandemic.
These stormy skies for air travel and its related industries have led to the closure of some airlines while others are in the doldrums. It has led to job losses in the tens of thousands.
Ironically, the aircraft also responsible for helping spread Covid-19 virus to almost all parts of the world has been grounded by the very virus.
In 1998, it is estimated that airlines collectively sold about 1.5 billion tickets and by 2019, there was a huge increase to an estimated 4.5 billion tickets.
For 2020, the International Air Transport Association (IATA) has issued an estimate that worldwide, revenues for airlines will drop by $419 billion this year. This is half of the revenue airlines had earned in 2019.
The aviation research firm Cirium estimated that by mid-April this year, about 14,400 passenger planes around the world that is 65 percent of the global fleet, was placed into storage.
This is a drastic reversal of fortunes considering that the last 20 years or so had seen tremendous growth in air travel.
Even those that survive the current downturn will be adopting new strategies, owners and also partnerships.
KLM, the famed and oldest airline in the world founded in 1919, just celebrated its 100th anniversary in 2019.
It reported a record loss of EUR800 million in the first half of the year and just received EUR1 billion in loans from the Dutch government with 4,500-5,000 upcoming job cuts.
The scenario above is just an example I am using to illustrate what is happening in the industry across the world.
So, what is happening to our national flag carrier — Malaysia Airlines?
It appears to be on the verge of collapse — yet again! This time, it is obviously due to the Covid-19 pandemic or so it seems.
The airline is seeking financial assistance from sole shareholder and sovereign wealth fund Khazanah Nasional.
Before this, it has been reported that RM6 billion of financial aid has been given over the years.
Some reports cite that they are now seeking another RM2 billion. Should this be given?
Some would say no. However, there are comments that Malaysia Airlines usually only gets into financial trouble when there is alleged political interference.
Based on this, I would personally say aid should be extended to Malaysia Airlines, conditional upon leaving the professionals to run the airline.
Malaysia Airlines has had a long profitable, illustrious and subsequently troubled history of financial distress.
Malaysia Airlines’ history began when it started operating as Malayan Airways in 1947 and in 1963 became “Malaysian Airways” with another name change in 1966 to Malaysia-Singapore Airlines (MSA).
In 1972 when it split assets with the formation of two new airlines; Malaysian Airline System (MAS), and Singapore Airlines.
The airline was transferred ownership to “Malaysia Airlines Berhad” due to another round of restructuring.
Over its history, Malaysia Airlines went through a continuous and at times even rapid expansion and has been received well internationally with good brand recognition.
It has survived and overcame various incidents ranging from the hijacking and subsequent crash of Flight 653, Flight 370 that went missing to the shooting down by a surface-to-air missile of Flight 17.
However, since the 1990s MAS faced various financial challenges either due to world economic recession, increases in fuel cost, alleged assets stripping activities and alleged political interference in management decision making.
During this period, it also had its ups — under the leadership of Idris Jala, a Sarawakian.
He brought MAS back to profitability between 2006 and 2007 with a record profit of RM853 million.
So how does Sarawak fare into the airlines equation?
I am sure many of you have observed that we are completely dependent on airlines that are beyond our control and therefore at the mercy of non-Sarawakians.
The Covid-19 pandemic has made it clear that Sarawak needs its own airline, be it government or privately-run or a mix of both.
This is because there were times when we were almost completely cut off economically from the rest of the world.
Sarawak government’s efforts to facilitate the setting up of its own airline would provide better economic security for Sarawakians and its local businesses.
I hope all Sarawakians give full support to this endeavour by our leaders to ensure an economically strong and financially independent Sarawak.
The views expressed are those of the author and do not necessarily reflect the official policy or position of the New Sarawak Tribune.
