Storm Over Fate of Malaysia Airlines?

A storm is brewing in Malaysia's aviation sector even as a controversy continues over the sale of shares in a state-owned company that manages airports nationwide to a firm owned by an Israeli-friendly fund manager.

This comes amid talk of a "mini-exodus" of employees from MAB Engineering - the company that carries out maintenance work on Malaysia Airlines' fleet of aircraft - to a Singapore company that has been allowed to set up base in Subang.

It is understood that more than 60 employees responsible for the maintenance, repair and overhaul of Malaysia Airlines' aircraft have handed in their immediate resignations after allegedly being poached by SIA Engineering Company (SIA EC), an aircraft maintenance firm owned by Singapore Airlines.

Source: https://en.wikipedia.org

It led to a series of flight delays and cancellations for Malaysia Airlines and its sister carriers Firefly and Amal, as well as technical issues that forced at least three flights to be turned back. Malaysia Airlines, which is only just beginning to overcome the effects of the Covid-19 pandemic following a surge in air travel worldwide, was also forced to reduce flight frequencies to 13 international destinations, citing "supply chain constraints and manpower challenges".

Both MAB Engineering and Malaysia Airlines are owned by Khazanah, which held on to the troubled airline after two tragedies in 2014 - the missing flight MH370 and the downing of MH17 - as well as the Covid-19 pandemic that shook the global aviation industry.

Khazanah also owns the other major component in the aviation sector, Malaysia Airports Holdings Berhad (MAHB), which has been at the centre of controversy over its decision to sell about a third of its shares to Global Infrastructure Partners (GIP), a company owned by US fund manager BlackRock, which faces allegations of complicity in Israeli war crimes.

Government supporters said the deal with SIAEC was conceived in April 2022 under the previous government, through a memorandum of understanding to lease two hangars at Subang Airport to the company for a period of 15 years.

SIAEC's presence should be seen as an investment. The company has to comply with regulations for a 51% local ownership. Some industry players have welcomed competition in the maintenance, repair and overhaul sector.

However, others like transport expert Rosli Azad Khan said the problems at MAB were not new, pointing to unattractive salaries and inadequate training. Many employees had migrated to leading airlines such as Qatar Airways and Emirates.

The think tank Iris Institute said the presence of SIAEC not only put Malaysia Airlines at a disadvantage, but also hindered plans to develop the local aerospace industry. Subang Airport is at the centre of a plan to rejuvenate Malaysia's aviation sector. The Selangor Aerospace Action Plan 2020-2030, which aims to produce more local talent in the sector. But they leave for greener pasture after being trained. So Malaysian workers do benefit from higher wages and new training opportunities.

Singapore is competing with Malaysia to become a regional aviation hub. Is Malaysia ready to compete or just want to be local monopoly? Malaysia Airlines could engage SIAEC or some other MRO for 2 years while rebuilding MAB Engineering?

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Storm over fate of Malaysia Airlines after mini-exodus of workers blamed on Singapore firm’s presence in Subang, MalaysiaNow, 2 September 2024