Undisclosed e-commerce partner could be the trump card in Najah’s hand

pic by TMR FILE

NAJAH Air Sdn Bhd’s move to rope in a China-based airline and an e-commerce giant in a bid to take over Malaysia Airlines Bhd (MAB) could make the company a serious contender to revive the ailing national carrier, now under Khazanah Nasional Bhd.

Although information is scarce at present, the special-purpose vehicle (SPV), on paper, may just have the right balance to potentially do something positive with the company.

Najah, led by Datuk Pahamin Ab Rajab, will remain the local component of the airline, while the China-based carrier and e-commerce giant could provide the financial muscle, fresh management expertise and industry presence.

The new parties could easily be potential financiers to support the funding of the carrier, while assisting its transition into new markets, particularly in the wake of the ever expanding gig economy.

Much like in the American television show “Shark Tank”, Pahamin and his team now have to prepare a strong pitch to convince Khazanah and the government that Najah’s proposal is the right one for the carrier, despite news reports stating that Khazanah’s preference seemed to lean towards Tan Sri Dr Tony Fernandes-led AirAsia X Bhd.

According to a report in The Malaysian Reserve on Tuesday, Najah’s proposal would give Khazanah the option to retain a stake in the SPV.

It would then position the carrier on a better footing, with the hope of taking away market share from rivals like AirAsia Group Bhd, Malindo Air and various other international carriers.

The unnamed Chinese airline’s role in the SPV is also expected to help bring some credibility to the takeover bid, but it is the undisclosed e-commerce partner that could potentially be the trump card in Najah’s hand.

As the public becomes increasingly connected and comfortable with smart devices, the e-commerce partner could provide the technological platform required to undertake advanced big data analytics to give MAB an edge in the market to sell tickets and fill seats on its planes, not to mention to crosssell products and services.

More importantly, as the gig economy expands, Najah needs to understand MAB’s core customer base and have a business module and strategy that could meet the needs of the market which, in turn, would help drive its revenue before returning to profitability.

Another positive Najah could offer when it walks into its “Shark Tank” episode is that it has no plan to cut manpower, which would certainly be welcomed by the 16,000 or so MAB’s workers.

It will also be politically more palatable to the government. After all, the government had spent almost RM1 billion annually or some RM24 billion over the past two decades to keep MAB afloat.

The carrier is losing about RM100 million every month now and the parties that have submitted proposals do not want to assume debt on its balance sheet.

The leadership at Putrajaya now needs to make a tough, but necessary decision on MAB as the Malaysian public needs to be assured that this is not a bottomless pit that will continue to drain public finances.

That money should be spent on infrastructure, schools and other development expenditures that will support a sustainable economic growth.

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Bhupinder Singh is the corporate desk editor of The Malaysian Reserve.