The pain of restructuring

In this issue we have stories on two very interesting developments – one that comes as little surprise and the other quite unexpected.


The pain of restructuring


In this issue we have stories on two very interesting developments – one that comes as little surprise and the other quite unexpected. I am of course speaking of the news that Malaysia Airlines (MAS) will be delisted from the country’s stock exchange and undergo what is said to be a massive overhaul and the other news from neighbouring Thailand where the military junta has declared Thai Airways (THAI) is to undergo a similarly substantial restructuring.

Certainly both are in desperate need of an overhaul – Malaysia Airlines was in desperate need of real and meaningful restructuring well before the tragic and pitiful double disaster struck leaving it now bleeding US$ 2 million a day according to analysts and similarly Thai Airways has been in need of a similiar indepth housecleaning for quite a number of years. It is a shame it has come to such drastic action for both and a far greater shame that both processes had to come about as a result of dramatic events – fatal accidents on one hand and what was effectively a military coup d’état on the other.

On the Malaysian side there has been much criticism over the fact that the MAS’ main shareholder, state-investment company Khazanah, will be leading the restructuring. Many ask whether a restructuring this time around would be any different, considering that so many of the previous restructuring exercises had failed.