(AFP) - Loss-making national carrier Malaysia Airlines (MAS) faces a long and turbulent flight ahead, economists say, adding that it has little options but to slash operation costs.

"It is going to be a roller coaster ride for MAS in the aftermath of the September 11 terror attacks as travellers still remain too frightened to fly," an economist with a Singapore-based foreign brokerage told AFP.

The economist, requesting anonymity, said the gloomy outlook for the world economy and people putting off travel were making life difficult for MAS.

"Like any other company, the bottom line is to cut costs in the wake of falling revenue," he said, adding that it may have to cut salaries and slash its workforce.

The economist said lowering ticket prices may not have the desired effect since people do not want to travel following the attacks using hijacked aircraft.

"This year, next year is going to be a bad year for MAS," he said.

MAS could resort to leasing aircraft that have been grounded, he suggested.

A report last week said MAS may ground at least 10 aircraft and slash its workforce by 3,000 as part of a overhaul plan to remain afloat.

No to foreigners

The economist said unlike other carriers whose moves would be dictated by business needs, MAS as a national carrier was limited as to what action it can take.

"In Malaysia's case, there is a tendency for it not to diversify its shareholdings of national assets to foreigners.

"It is unlikely for MAS to sell its stakes to foreign companies to come in to help out," he said.

And even so he said investors are not expected to rush to buy MAS shares as its fundamentals are "not so strong".

MAS last week announced it would axe 12 unprofitable international routes and increase flights in Asia following the terrorist attacks in the US.

It said the network restructuring would cut losses by up to RM190 million a year and that it expected to break even by 2004.

MAS said passenger volume was expected to fall around 15 percent from last year.

The airline embarked on a plan to return to the black after the government renationalised it in February. It has debts totalling more than RM10 billion.

Restructure needed

Lachman Naraindas, president of the Kuala Lumpur/Selangor Indian Chamber of Commerce and Industry, told AFP that MAS needed to restructue if it hoped to survive the crisis.

"MAS should concentrate on regional markets, provide travellers with package deals and tie-up with regional airlines to encourage flying long hauls," he said.

Naraindas said MAS should not cut its labour especially at a time when jobs are difficult to come: "It should only be at the last resort."

Asked if he would fly, he said: "If my business demands, I will fly but I will not go for holidays."

Naraindas said he would not invest in MAS shares as businesses do not have cash to spare. "I rather put it in my business. Forget about investing."

"I would say, most airlines including MAS face a roller coaster ride - at least until the Afghanistan issue is settled. Then perhaps there will be a rebound in the airline industry," he said.

US jets pounded Taliban frontlines for a third straight week to shake the Islamic militia. The prospects of a quick end to US strikes seems remote.