Former International Trade and Industry Minister Tan Sri Rafidah Aziz says this is the right time to re-strategise, reorganise and restructure Malaysia Airlines (MAS) via its delisting and complete takeover of the ailing carrier by Khazanah Nasional Bhd.

However, she cautioned against expectations for Khazanah Nasional to return MAS to profitability quickly after its restructuring, given the vagaries in the international marketplace and stiff competition in the airline industry.

She said that the objective is to create a leaner, structurally sound entity that commensurates with the expectations of an industry that is fraught with stiff competition.

Rather than being tied down to public shareholders, she said that an advantage for the government’s investment arm owning 100 per cent of MAS is that it would have a free hand in turning around MAS in a comprehensive, intensive and extensive manner.

"This has to be done without all the other attendants and rules and regulations if it is still a public listed company, and this is important because MAS to my mind, must remain our national pride.

“We must bring it up to the level that enables us to be proud of MAS as an airline. We are so used to that, especially to my generation," Rafidah told Bernama.

Khazanah Nasional is expected to pay 27 sen a share or RM1.38 billion in total to buy the remaining 30.6 per cent stake it does not own in MAS.

Asked to comment on the price offered to minority shareholders, Rafidah declined to comment but sufficed to say that Khazanah Nasional would have done its own research on the value it should offer and that people should not quibble about it.

Rafidah who is also Chairwoman of AirAsia X Bhd said the plan to delist and buy back MAS shares is a big and important first step.

Its restructuring should be done in a “very comprehensive manner” so that it can be consolidated into an entity that serves not only Malaysians but the world.

However, the financial turnaround is not guaranteed to be full proof because the airline industry is very competitive as proven by low-cost carriers penetrating the industry in a big way, she said.

This is made worse by cost uncertainty brought about by escalating jet fuel costs.

Against such a scenario, she said that it would be more understandable and acceptable if MAS was losing money based on market factors and not through its own shortcomings.

MAS has reported a net loss of RM433 million for the first quarter of this year, 59 per cent more than the RM279 million losses reported in the same period a year ago.

Besides reeling from financial losses, the national carrier suffered two further blows when its Boeing 777 MH370 went missing on March 8 and another B777 MH17 was shot down in eastern Ukraine war zone on July 17.

Rafidah said areas that needed to be looked at to resuscitate MAS include the company’s own financial structure, its organisational set-up as well as its business strategies.

Turning to MAS undertaking low-cost airline operations, she said:"That is not good for MAS, as you can leave the low-cost flying to low-cost operators.

"MAS should stick to the legacy airline model and re-look at all the businesses it is undertaking, apart from its core business of flying to improve profitability."

She said MAS should also look into the relationship between its core businesses and that of the other businesses it is undertaking and gauge whether some of its operations should be outsourced or withered out.

Turning to the MAS unions, Rafidah said there is nothing wrong with it but perhaps the unions have to understand what MAS is all about and what it is undergoing.

"It is so important that the unions accept whatever changes that have to be made (towards profitability) as it is pivotal," Rafidah said.

She said matters which are beyond MAS' control such as the escalating fuel price and airport charges should not be scrutinised.

"What is within our control, we can control it, then it adds on into helping to turn around and sustain revenue growth and profitability.

“Nobody should expect MAS to be highly profitable as soon as it's restructured because the airline industry doesn't obtain profits in an instance.

"Don’t expect Khazanah Nasional to turn around MAS in such a fashion, as MAS is not a factory," she said, emphasising that the airline industry is extremely competitive, whether it's a legacy airline or a low-cost airline.

"Innovation has to be done appropriately involving restructuring and organisation, whether it is top heavy or there is too much fat, we need to make it lean and see the possibility of outsourcing of services whether it is cost effective to collaborate or do it yourself," she added.