Bakgroud of Malaysia Airlines System Berhad
Scheduled air passenger and mail services in Malaya commenced in 1937 when Wearne's Air Service (WAS) commenced operating services between Singapore, Kuala Lumpur and Penang. Wearne's Air Service was started by two Australian brothers, Theodore and Charles Wearnes. The service commenced as a thrice weekly flight between Singapore and Penang The first flight, using an 8-seater de Havilland DH.89A Dragon Rapide took place on 28 June 1937 This inaugural flight departed Singapore from the then brand-new Kallang Airport which had just opened earlier in the same month on 12 June Later a second D.H.89A enabled the expansion to daily services as well as the addition of Ipoh as a destination. The WAS services ceased with the onset of the Second World War Japanese occupation of Malaya and Singapore.
An initiative by the Alfred Holt's Liverpool-based Ocean Steamship Company, in partnership with the Straits Steamship Company and Imperial Airways, resulted in the incorporation in Singapore on 12 October 1937, Malayan Airways Limited (MAL). But the first paying passengers could be welcomed on board only some 10 years later. After the war, MAL was restructured to include just the partnership of Straits Steamship and Ocean Steamship. The airline's first flight was a charter flight from the British Straits Settlement of Singapore to Kuala Lumpur, on 2 April 1947, using an Airspeed Consul twin-engined aircraft. This inaugural flight on the "Raja Udang", with only five passengers, departed Singapore's Kallang Airport and was bound for Kuala Lumpur's Sungai Besi Airport. Weekly scheduled flights quickly followed from Singapore to Kuala Lumpur, Ipoh and Penang from 1 May 1947 with the same aircraft type. The airline continued to expand during the rest of the 1940s and 1950s, as other British Commonwealth airlines (such as BOAC and Qantas Empire Airways) provided technical assistance, as well as assistance in joining IATA. By 1955, Malayan Airways' fleet had grown to include a large number of Douglas DC-3s, and went public in 1957. Other aircraft operated in the first two decades included theDouglas DC-4 Skymaster, the Vickers Viscount, the Lockheed L-1049 Super Constellation, the Bristol Britannia, the De Havilland Comet 4 and the Fokker F27. Over the next few years, the airline expanded rapidly, boosted by post-war air travel demand when flying became more than a privilege for the rich and famous. By 12 April 1960, the airline was operating Douglas DC-3s, Super Constellations and Viscounts on new routes from Singapore to Hong Kong, and from Kuala Lumpur to Bangkok via Penang. Flights were also introduced from Singapore to cities in the Borneo Territories, including Brunei,Jesselton (now Kota Kinabalu), Kuching, Sandakan and Sibu.
In 1957, the airline became a state-run stock corporation. With the delivery of an 84-seat Bristol Britannia in 1960, the airline launched its first long-haul international flight, to Hong Kong. When Malaya,Singapore, Sabah and Sarawak formed the Federation of Malaysia in 1963, the airline's name was changed, from "Malayan Airways" to "Malaysian Airlines" (though still abbreviated to MAS). MAS also took over Borneo Airways. In 1966, following Singapore's separation from the federation, the airline's name was changed again, to Malaysia-Singapore Airlines (MSA). The next year saw a rapid expansion in the airline's fleet and routes, including the purchase of MSA's first Boeing aircraft: the Boeing 707s, as well as completion of a new high-rise headquarters in Singapore. Boeing 737s were added to the fleet soon afterward.
The differing needs of the two shareholders, however, led to the break-up of the airline just 6 years later. The Singapore government preferred to develop the airline's international routes, while the Malaysian government had no choice but to develop the domestic network first before going regional and eventually international. MSA ceased operations in 1972, with its assets split between two new airlines; Malaysian Airline System (MAS)(now Malaysia Airlines), and Singapore Airlines.
With the Singapore government determined to develop Singapore Airlines' international routes, it took the entire fleet of seven Boeing 707s and five Boeing 737s, which would allow it to continue servicing its regional and long-haul international routes. Since most of MSA's international routes were flown out of Singapore, the majority of international routes were in the hands of Singapore Airlines. In addition, MSA's headquarters, which was located in Singapore, became the headquarters of that airline.
The initials MSA were well regarded as an airline icon, and both carriers tried to use them. Malaysian went for MAS by just transposing the last two letters and choosing the name Malaysian Airline System, while Singapore originally proposed the name Mercury Singapore Airlines to keep the MSA initials, but changed its mind and went for SIA instead. Acronyms for airline names later became less fashionable, and both carriers then moved on to their descriptive names.
Malaysian Airline System took all domestic routes within Malaysia and international routes out of that country, as well as the remaining fleet of Fokker F27's. It began flights on 1 October 1972. Soon after that, Malaysia Airline System rapidly expanded its services, including introducing long-haul flights from Kuala Lumpur to London.
In the same year, MAS operated flights to more than 34 regional destinations and six international services. In 1976, after receiving its DC-10-30 aircraft, MAS scheduled flights reached Europe, with initial services from Kuala Lumpur to Amsterdam, Paris and Frankfurt.
An economic boom in Malaysia during the 1980s helped spur growth at Malaysia Airlines. By the end of the decade, MAS was flying to 47 overseas destinations, including eight European destinations, seven Oceania destinations, and the United States destinations of Los Angeles and Honolulu. In 1993, Malaysia Airlines reached South America when the airline received its Boeing 747 aircraft. When Malaysia Airlines introduced its service from Kuala Lumpur to South America, MAS became the first airline in Southeast Asia to serve South America via its flights to Buenos Aires, Argentina. Malaysia Airlines also flew to Mexico City between 1994 and 1998, taking advantage of fifth-freedom rights which allowed it carry passengers between Mexico City and Los Angeles, enroute to Kuala Lumpur.

Behind the scenes of Malaysian Airlines System Berhad (MAS) MAS first period of unprofitability is in 1997 which is RM260million due to poor management in MAS lead by Tan Sri Tajuddin Ramli. Tajuddin Ramli was the majority shareholder when he (through his company Malaysia Helicopter Services) purchased 32% MAS share which is hold by Bank Negara Malaysia in 1993. There was stated that the share was purchased in value of 2 MAS: 1 MHS which on that time the market value of MAS plunged fully to RM8.70/share and market value of MHS rose dramatically to RM14-15/share. MHS share rose dramatically because of injection of fund by Tan Sri Tajuddin Ramli worth RM1.79billion in MHS which is increase the value of MHS. Where Tan Sri Tajuddin Ramli get the sources to inject fund to MHS? It is because Tan Sri Tajuddin Ramli makes a loan which is from Danaharta in value of RM1.79billion. Results, Tan Sri Tajuddin Ramli be the only person that perform the highest loan in history of Malaysia. How can Danaharta can approve the loan application for so much the amount money? How Tan Sri Tajuddin Ramli so brave to make the decision to apply a loan on so much the amount money? Based on Tan Sri Tajuddin Ramli statement (referring to Status of Latest Cases in Attorney General’s Chambers website), he state that on 1993, there is an agreement between him, Tun Dr. Mahathir (former Prime Minister of Malaysia) & Tun Daim Zainuddin (former Finance Minister of Malaysia) those exist in verbal. The agreement is called “overriding agreement”. Tan Sri Tajuddin Ramli said that on that time, Tun Dr. Mahathir and Tun Daim Zainuddin meet him and asked him to buy 32% Central Bank of Malaysia share in MAS. In the agreement, Tan Sri Tajuddin Ramli is get assurance that make him free to bear any liability for any financial loss in the event of negative things on MAS. In 2001, Malaysia government buys Tan Sri Tajuddin Ramli for RM8/share. Questions arise because of market value for MAS is only RM3.68/share and RM1.74/share for intangible asset. This question is answered by Tun Daim Zainuddin in Parliament. In report of “Dewan Rakyat” dated 21.3.2001, Tun Daim explain that government buy the share because does not want MAS share been purchased by foreign company. Tun Daim Zainuddin stated that Tan Sri Tajuddin Ramli is a reluctant seller. Tun Daim Zainuddin also explained that the action taken by government to buy back the share of Tan Sri Tajuddin Ramli in MAS is because to safe MAS to become more worst in performance.