Former chief Mohd Shukrie the frontrunner to helm MAHB again, say sources

TheEdge Mon, Feb 26, 2024 04:00pm - 1 month View Original


This article first appeared in The Edge Malaysia Weekly on February 19, 2024 - February 25, 2024

SPECULATION is rife as to who will take over the helm at Malaysia Airports Holdings Bhd (MAHB). At least three names have been thrown into the ring as the possible successor to Datuk Seri Iskandar Mizal Mahmood, who stepped down from his position as managing director (MD) at the end of his two-year contract tenure on Oct 24, 2023.

Sources say some of the names being bandied about as potential candidates are the airport operator’s former group CEO Datuk Mohd Shukrie Mohd Salleh; Faizal Sham Abu Mansor, MAHB chief financial officer (CFO) from 2006 to 2015; and interim CEO Mohamed Rastam Shahrom.

Mohd Shukrie appears, however, to be the frontrunner for the role, sources say.

If appointed, it would be his second stint helming the government-linked company, after leaving the group in October 2021. Mohd Shukrie first joined MAHB as chief operating officer in May 2019 before assuming the position of group CEO in March 2020 as Covid-19 swept across the world. He saw how the pandemic brought travel to a standstill, causing massive job and revenue losses as well as resulting in the grounding of almost two-thirds of the global passenger aircraft fleet.

MAHB also swung to its first net annual loss — of RM1.12 billion — in its 22-year history as a public-listed company in the financial year ended Dec 31, 2020 (FY2020). It managed to return to profitability in FY2022, with a net profit of RM187.2 million compared with a net loss of RM766.4 million in FY2021, as countries lifted Covid-19 restrictions.

Iskandar Mizal was appointed as MD of MAHB in October 2021. He was MAHB’s general manager from 1999 to 2003, during which he led the initial public offering and listing of the company on Bursa Malaysia.

The end of his latest stint was reportedly over the delayed replacement of the aerotrain system at Kuala Lumpur International Airport (KLIA). This move was despite him successfully moving forward the new operating agreements (OAs) between the government and MAHB to continue to manage and maintain the 39 airports in the country until 2069, and the plan to redevelop Subang Airport into a premium city airport, with jets allowed to fly out of the airport again.

MAHB has been without a permanent boss since the departure of Iskandar Mizal in October and, since then, Mohamed has been at the helm on an interim basis. He joined MAHB on Jan 1, 2020, as group CFO. Prior to joining MAHB, he was CFO of UEM Sunrise Bhd.

The rumour mill has gone into overdrive, however, as the market is growing impatient over the lack of updates on Iskandar Mizal’s successor.

According to sources, there are also attempts to remove Tan Sri Zainun Ali as non-executive chairman. She was appointed for the second time in February 2023, replacing Datuk Seri Dr Zambry Abdul Kadir, who had resigned from the position in December 2022 after his appointment as foreign minister. Zainun, a former Federal Court judge, had previously held the position from January 2019 to August 2020.

Critics have pointed to MAHB’s current board members’ lack of aviation experience as well as the board’s past failure in responding quickly over upgrades in the KLIA Aerotrain, baggage handling system and ageing IT system and equipment, as fodder for faultfinding.

The appointment of the MD or CEO of MAHB is within the purview of the Ministry of Finance (MoF).

Since 2014, MAHB has had four CEOs: Datuk Mohd Badlisham Ghazali, Raja Azmi Nazuddin, Mohd Shukrie and Iskandar Mizal.

Nevertheless, MAHB’s new CEO will have his work cut out for him, including bringing the KLIA Aerotrain project up to speed. Last month, Pestech Technology Sdn Bhd was reappointed as a contractor for the aerotrain replacement project in a consortium, together with Alstom Transport Systems (Malaysia) Sdn Bhd and IJM Construction Sdn Bhd. Alstom and Pestech were the original contractors for the train replacement project. MAHB had terminated the contract last August, citing Pestech’s non-performance, compromising significant project milestones and risking delays in delivering the project before the deadline.

Under the new agreement, the consortium will have to deliver three new trains and two lines by the first quarter of 2025.

Then, there are the new OAs to be signed between the government and MAHB, in which the government had approved, in principle, the material terms of the agreements in February last year. These include a funding model for future growth and development of the network of airports. The current term of the OAs is due to expire in 2034.

The new CEO is likely to be tasked with overseeing the revamp of the baggage handling system at KLIA, where frequent breakdowns have had a negative impact on the country’s image.

He will also be expected to restore KLIA to the top tier of global rankings. In recent years, Malaysia’s main gateway has fallen behind other Asian airports, particularly Singapore’s Changi Airport, which is consistently ranked the best in the world.

“MAHB not only needs to battle stabilisation of customer experience, but has a humongous task to align its workforce. Stakeholders should provide strong steer to ensure it is focused on nation-building. The next few years will be critical, as the industry will be faced with a potential recession, thus the race to stabilisation is key,” an industry observer tells The Edge.

“Key stakeholders such as policymakers should unite industry players into [having] a common goal and deliver consistency for the travelling public.”

The industry observer highlights the need for MAHB to be self-sustaining and not lose focus as an enabler to drive or contribute to the economic stability of the country. “These include implementing state-of-the-art technologies, undertaking a complete review or revamp of its infrastructure, and establishing clear customer value propositions that MAHB must drive,” he says.

“They should also aim to attain operational efficiency, support environmental, social and governance programmes fully, as well as elevate staff morale to drive productivity and speed of execution.”

MAHB’s 2022 annual report shows that as at March 31, 2023, its largest shareholder was Khazanah Nasional Bhd, with a 32.67% stake, followed by the Employees Provident Fund and Kumpulan Wang Persaraan (Diperbadankan), with 15.13% and 6.01% equity interest respectively.

MAHB’s share price had risen about 16% over the past year to close at RM8.05 last Friday, giving it a market capitalisation of RM13.4 billion. 

 

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