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Aviation History
1995
1995 - 3540.PDF
NEWSMAKERS Tajudin Ramli: Malaysian Midas? Malaysian Airlines' new chairman continues to display the golden touch. PAUL LEWIS/KUALA LUMPUR WHEN TAJUDIN RAMLI entered the international aero space arena, he brought with him two essential qualifications for suc cess: vision and cash. In the 18 months since taking the helm of Malaysia Airlines (MAS), Tajudin has shaken the national carrier out of its catatonic existence, master minded a series of major acquisi tions and alliances, and is now focusing his attention on the coun try's embryonic aerospace industry. As the founder and chairman of Malaysian telecommunica tions giant Technologies Re sources Industries, Tajudin has accumulated a sizeable financial war-chest over the years. In June 1994, his holding company, Malaysian Helicopter Services (MHS), paid MS1.79 billion ($700 million) for a 32% con trolling interest in MAS. At the same time, MHS ac quired a 25% stake (since reduced to 20%) in US carrier World Airways for M$27.5 million, fol lowed by a M$9.26 million outlay for a 66.7% share of Aerospace Industries of Malaysia (AIM), which, in turn, owns 34% of the Airod maintenance and overhaul operation. More recently, the company increased its holding in Dutch helicopter operator Schreiner Avi ation to more than 44%, bought a 49% share in Air Maldives and took a 40% interest in Royal Air Cambodge (RAC). It has also picked up a further 19% stake in Airod, with the final withdrawal of Lockheed Aircraft Services Inter national from the joint venture. While there is some concern that Tajudin may have over extended himself, it is apparent that MHS' empire-building has had major benefits for MAS. The carrier has been able to draw on World Airways' McDonnell Doug las MD-11 fleet for added capaci ty, lease out smaller, surplus Boeing 737s and Airbus Industrie A300s to RAC and Air Maldives, and pool its engineering resources with Airod. Within weeks of his appoint ment as chairman of MAS, Tajudin announced bold new plans to restructure the airline, reduce spending and increase turnover. Early results indicate that Tajudin is on course, with MAS announc ing a net profit of M$l 39.3 million for the year ending 31 March, compared to just M$8.44 million for the previous year. Incredibly, the turnaround in die fortunes of MAS has been achieved without any large-scale redundan cies among the airline's 20,000- strong workforce. Tajudin says: "I didn't want to come in and start slashing people from the payroll. There were only one or two people who we did not think were con tributing enough to the company, and I let them go." SUBSIDIARIES MAS has already established a number of wholly owned sub sidiaries to take over some ancillary operations, such as catering and duty-free concessions. The results have been good, with MAS Cater ing and MAS Golden Boutique reporting healthy profits for their first six months of operation. Tajudin explains: "These sub sidiaries were siphoned off because we knew from day one that they could easily be incorporated and Tajudin Ramli "Before I came, cargo used to be the dead end of the airline. It is now becoming a profitable part of the company." contribute quickly to the group." A third subsidiary, Tiara Malaysia Airlines, was established in late August as an investment holding company. It is planned to extend the restructuring process to other areas of MAS' activities, including engi neering and cargo handling. MAS has broken up its former finance department into three separate entities, in a move de signed to improve budgeting and cut costs. The Budgets and Cor porate Planning division has been given the task of long-term plan ning through to the year 2002, while Corporate Accounts focuses on day-to-day implementation and Treasury on reducing costs, such as those of fuel. "Once this programme starts to take effect, our profit-and-loss bal ance sheet will not be so dependent on outside forces," claims Tajudin. "We'll be able to plan ahead for downturns and the effect on profits." One formidable task faced by the financial planners at MAS is to reduce the airline's debt, already M$6.5 billion and forecast by ana lysts to rise to M$7.5 billion by 1997. There are still major items of expenditure in the pipeline, includ ing buying up to 15 additional Boeing 747-400s and at least ten yet-to-be selected medium-capaci ty long-range aircraft (Flight Inter national, 4-10 October). An increasingly important source of income for MAS is car go, and Tajudin has been quick to exploit this by adding more capac ity. The airline has leased two MD-llFs from World and con verted its two Boeing 747-200s into freighters. "Before I came, cargo used to be the dead end of the airline. It is now becoming a profitable part of the company," Tajudin claims. "We're hoping to increase its con tribution in terms of revenue from less than 15% now to about 25- 30% by the end of the decade." MAS international passenger traffic is also turning in a stronger perfonnance, with revenues up 12% by the end of the 1994 finan cial year. The airline has concen trated its marketing efforts on its traditionally strong routes to Europe, and London in particular. Frequencies have been increased and code-sharing agreements 34 FLIGHT INTERNATIONAL 6 - 12 December 1995
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