MALAYSIA-SINGAPORE AIRLINES (Commercial viability)

Mr P. Selvadurai asked the Minister for Communications if he will make a statement on the talks that he has had with the Malaysian Government on the commercial viability of the Malaysia-Singapore Airlines.

Mr Yong Nyuk Lin: Mr Speaker, Sir, at the invitation of the Minister of Transport. Malaysia, I visited Kuala Lumpur from the 5th to the 7th of January for informal discussions with him on "matters of common interest, particularly the problems surrounding Malaysia-Singapore Airlines".

It can now be disclosed that amongst the matters discussed were two outstanding issues pertaining to the terms and conditions of appointment of Mr David Craig, Senior General Manager of British Overseas Airways Corporation, as Managing Director of MSA. which appointment was confirmed by the MSA Board with effect from 1st April, 1969.

Although clause 7 of the Agreement on MSA entered into with the Malaysian Government on 14th May, 1966, states that "Both parties recognise that MSA shall continue to operate on the basis of sound commercial principles". I regret to say that the Singapore Gov ernment had to express "no confidence" in the former management of MSA. This was made known at the MSA Board meeting held on 27th August, 1968, as a result of which the General Manager (Mr K. R. Hamilton) had to tender in his resignation, which became effective on 10th October, 1968. Since then, three other senior officials have also resigned:

(1) the Secretary (Mr G. Fernandez), with effect from 31st December, 1968:

(2) the Accounts Manager (Mr S. N. Houghton), with effect from 15th March, 1969; and

(3) the Legal Officer (Mr Sathi V. Kandiah), to take effect from 31st May, 1969.

I have reasonable confidence in stating that under the new management, MSA can be made commercially viable in the near future.