MAS could quit cargo scene

MALAYSIAN Airline System (MAS) could sell its cargo business as it looks to recuperate major losses.

The airline’s cargo, ground services operations, engineering and pilot training could all be spun off to raise proceeds of as much as RM337 million (US$108 million), chief executive officer Ahmad Jauhari Yayha, said.

The carrier said will cut unviable routes and form a new regional unit in a bid to return to profit in 2013.

Routes being dropped include Johannesburg, Cape Town (both South Africa) and Buenos Aires (Brazil).

MAS, which will likely make a loss of RM165 million ringgit (US$53 million) next year, has begun discussions to cooperate with AirAsia to cut costs after the two airlines’ biggest investors undertook a share swap in August.

AirAsia chief executive officer Tony Fernandes and partners own 20.5 per cent of MAS. They gave 10 per cent of AirAsia to Malaysian’s state-controlled parent Khazanah Nasional. Fernandes and his deputy Kamarudin Meranun also now sit on the MAS board.

MAS has struggled to turn rising sales into profits because of higher fuel costs and competition from AirAsia.

“Consolidated operations will deliver better service at lower costs,” said Jauhari, chief executive since September. Potential areas for cooperation with AirAsia include fuel purchasing, maintenance, training and ground handling.

Read more in Air Cargo News 717, issued 12 December.