Air Transport World

Malay makeover. (Malaysia Airlines) (includes article on financial turnaround of World Airways)(Company Profile)

MALAYSIA AIRLINES has been through a whirlwind 18 months. Ever since an ambitious malay businessman bought control, MAS has experienced a corporate makeover that has left few activities or employees untouched.

Work-force reductions, job realignments, negotiations and Chairman Dato' Tajudin Ramli's blunt remarks have unsettled the working environment. But top MAS managers like the more businesslike atmosphere. Bashir Ahmad, head of planning, says: "Before, the board of directors were just representatives of the owners. So we prepared papers for management which went to the board which went to government. Decisions [under Tajudin] are made faster."

After respectable results in the 1980s, MAS's 1990 profits tumbled. Malaysia's pro-growth government, which already had sold 57% of MAS, thought the carrier's costs were too high and that it needed an entrepreneurial push. So in December, 1993, Tajudin, who already had invested in aviation within and outside Malaysia, received an OK to acquire 32%, using his private company, RZ Equities. That left the government with 11%, which Tajudin wants. Regardless of whether that is sold, the government keeps a golden share.

Meanwhile, the 32% stake is being transferred to Malaysian Helicopter Services (MHS), which must pick it up by next month. MHS is a holding company controlled by Tajudin through his Technology Resources Industries. He controls TRI, which he transformed into a telecommunications company two years ago, through another private company. MHS, MAS and TRI all are publicly traded.

The government has a share in MHS because "it's only fair" to "take the government along as my partners," Tajudin says. And he has investments in resorts, hotels and golf clubs.

Actually, Tajudin had been thinking about the airline business for awhile. Three or four years ago, he proposed a second airline to the government, using MHS as a base. As part of that plan, MHS purchased a 33.33% share of Schreiner Aviation in the Netherlands and a 24.9% share of World Airways in 1993. Baharudin Ngah, a longtime MAS employee who was at MHS at the time and is back as MAS cargo director, recalls: "MAS had been neglecting four areas - cargo, domestic service, ground services and charter - all the poor cousins. We wanted to use World's rights and compete with MAS."

But that would have been "an uphill battle," Tajudin says. Instead, he figured, "no matter how bad it was, I could turn MAS around." The government is letting him try. MAS's boss expects to "get back all [of] my money in 4-5 years."

Tajudin started as a banker and then set up his own business in 1982. He sees little difference in managing MAS and other businesses. "The people ... are clouded; they can't stand back. But when you do, you ask, `why do we do these things? …

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