BONUS PLAN FOR MAS EMPLOYEES
LAST week, sovereign wealth fund Khazanah Nasional Berhad announced that half of its total impairment cost of US$1.79 billion (RM7.3 billion) last year was due to losses from Malaysia Airlines.
Since its delisting in 2015, MAS has reported losses of US$560 million, which it said was due the low ringgit and higher jet fuel costs,
While there’s often little airlines can do about the price of jet fuel and currency weakness, apart from hedging their position, operational inefficiency is one area that can be fixed by airlines.
It needs to start with one contentious area: workers’ union.
The typical path for airlines management is to propose paycuts and shrink allowances, but as MAS is one of Malaysia’s largest state-backed employers, this won’t go down well with the electorate, let alone its employees.
Therefore, a blue ocean strategy needs to be explored from the cockpit down to the frontline staff and the 14,000 employees in between.
By offering share options and a future bonus-sharing plan with employees, linked not with seniority but employee’s job output, MAS employees could become a powerful engine of growth, an asset that is now under-tapped.
In fact, there is nothing like ownership to drive people to go beyond their job description.
Therefore, by pledging to give every employee a piece of future profits, the MAS management will boost the foundation of what could become a world-class airline in terms of service and quality, from the ground up.
Lest it be forgotten, AirAsia did not succeed in the beginning because it could claim to have larger, more comfortable planes or was able to offer seamless, hassle-free check-in service.
It succeeded because of its unique sense of entrepreneurship and its can-do spirit from the ground up.
MAS, too, can soar as a global airline if it adopts an unconventional flight path to universal profitability, for its employees, shareholders and the country.
It can do this by using employee share ownership to reverse the compounding balance sheet headwinds and harness it into a strong tailwind-driven profitability.