Financial History of MAS and SIA
In 1972 Malaysia-Singapore Airlines (MSA) became MAS and SIA. In the last 10 years from 2002- 2012 SIA reported a total pretax profit of Singapore $10,565 million, averaging more than S$ one billion per year.
MAS reported losses in 1997 RM 260 million, in 2005 Rm 1,300 million and in 2011 reported a stunning loss of Rm 2,520 million (Wikipedia).
It would seem that every developing nation wanting to show off to the world its progress MUST have its own airline, regardless of the impact on an industry already grossly over-supplied, and regardless of whether they have the ability to manage efficiently. So there is a regular stream of announcements of new airline ventures.
Now that Malaysia has also done it and failed dismally, the next logical question to ask is why doesn’t the Malaysian government allow MAS to fold up or go under?
There are two main reasons: Firstly, the perennial optimism of managers and shareholders. “Just one more chunk of money will see us break through into profitability as we rout the opposition!” seems to be the credo of these parties based on their self and not national interest.
Secondly, there is government interference. Around the world we see many governments come to the rescue of their airlines despite perennial losses. Malaysia has not learnt these lessons – initially for reasons of national pride tied to the ego of leaders but now increasingly apparently to save jobs and to prevent the retrenched employees from voting for the opposition.
It is an expensive mistake to continue MAS. Mahathir who has on more than a few occasions bailed out MAS from liquidation using enormous sums of taxpayer money should answer this question instead of beating around the bush on the divorce event.