Hole on my Shoulder

Just came out from a minor surgery to address an irritating little acne just below my shoulder that grew over time into a large sebaceous cyst.

The cyst finally erupted on my last two days in Mekah but did not dry-up after two visits to a clinic. It had to undergo procedure at an equipped hospital. Since happen to be in hospital for some post-Mekah rehab, might as well do it.

So, please eh ... just cause there is a cyst off my shoulder, it does not mean there is a chip on my shoulder towards those people at Air Asia, MAS and Khazanah. Just saying it as I see.

Someone alerted me of The Sun's report today on an analysis on Danny Boy's turnaround plan. He said it is not as in-depth as what this blog wrote yesterday [read here] but it is right to the point.

The more appropriate title should have been, "Same b*lls*it from the same as*hol*" but they are more diplomatic. Cari makan ma ...advertisement.

Old wine in new bottle

KANG SIEW LI

PETALING JAYA (Dec 9, 2011): Malaysia Airlines (MAS) revealed its latest business turnaround plan on Wednesday but the issue of sustainability remains a concern, aviation analysts say, adding that the loss-making national carrier should look beyond the short-term economic boost, or there will be more turnaround plans to come.

Analysts like RHB Research Institute also noted that the measures proposed are nothing out of ordinary but just logical things to do in the normal course of business.

Some say they see similarities between the new plan and the previous turnaround exercises such as the Widespread Asset Unbundling (WAU) restructuring exercise in 2002 and the Business Turnaround Plan 1 (BTP1) in 2006, in that it also involves cutting unprofitable routes and spinning off assets.

"Under any turnaround plan, it's normal practice for businesses to sell their assets to repay debt, that is, pluck the low-lying fruits. In the case of airlines, they would also shed jobs and cut some unprofitable routes which would likely ensure profit in a short time," said an analyst who asked not to be named.

"But the big question is whether the carrier also has a business plan/model that is sustainable in the long term," he added.

Under WAU, in which MAS deputy CEO Mohammed Rashdan Mohd Yusof was also involved as his company at that time, BinaFikir, was the consultant to the carrier then, MAS' aircraft assets were transferred to and leased back from Penerbangan Malaysia Bhd. It also hived off 70% of its shares in MAS Catering Sdn Bhd.

For BTP1, MAS achieved a one-off gain from selling assets such as the MAS building and Four Seasons Langkawi.

This time around, MAS said it is looking to spin off its ancillary units such as MASkargo Sdn Bhd, aerospace engineering, pilot training and ground handling as part of its efforts to raise cash.

"Five years (after WAU,) MAS was in no better shape and in came oil executive Datuk Seri Idris Jala who came out with two business turnaround plans before he moved to work in the prime minister's office," said Standard & Poor's Equity Research aviation analyst Shukor Yusof.

"The truth of the matter is that MAS has been mismanaged for so long that even its main stakeholder, Khazanah Nasional Bhd, appears to be running out of ideas on how to shake the carrier up," he added.

Shukor also believes that MAS should do more to develop and nurture its own set of managers to run the carrier in the future.

Meanwhile, most analysts expressed skepticism on the viability of MAS' new plan as the airline faces tough challenges amid growing competition. There are also concerns of potential funding for its RM6 billion capital expenditure, which could burden the carrier with a gearing of four times by end-2012.

"We felt that MAS is attempting to effect a 'painless restructuring' (but) as the saying goes, 'no pain no gain' and as such we doubt if the painless restructuring could produce the results it desires," said RHB Research in a report yesterday.

Analysts are skeptical of the recovery plan due to its sketchy guidelines and timelines, the ability of MAS to increase ticket prices without sacrificing passenger demand, the relatively long timeline needed to change passenger perception and preference and the readiness of its staff to accept the new structures.

This is on the back of an anticipated slowdown in the economy, which will affect premium travel demand.

They also said execution is key to the carrier turning things around.

"We are optimistic on some of the initiatives in tackling the crisis faced by the carrier, but execution of the business plan remains a key risk. There are many issues highlighted in the business plan which need to be addressed and one year may not be enough. Right-sizing of staff was highlighted and it remains to be seen how this will be handled," said HwangDBS Vickers Research.

I think this blog's yesterday's report has more depth.

This and other newpapers' reports dare not report it as Air Asia vulturing over a MAS cannibalised by it's own shareholder and Government owner.

But, between MAS and Air Asia management, it is an open secret as we see the picture below of MAS CEO, Dato Ahmad Jauhari "slaughted" by party host Air Asia-X CEO, Azran Osman Rani:


Khazanah and MAS Public Relation machine was on over drive yesterday to address different messages to different audience.

To the Malay audience like in Utusan Malaysia, they were playing sympathy to play on the fear factor of critical sitution. Utusan report was entitled MAS kini kritikal.

The Star's was cooperative to not be critical and supportive of their turnaround plan with a cautiously optimistic tone.

Read positively titled, "CEO sets in motion business plan to bring airline to profitability by 2013". However, there was a mysterious and interesting end:

There is also apprehension towards the comprehensive collaboration framework from with AirAsia.

Asked if the CCF was really necessary, he said “it makes it easier with the CCF."

Easier? What does he mean?

The Star dare not offend Air Asia as an important advertisement client. The MCA-controlled paper was willing to advertise Air Asia's protest against the Government as raised here by Rocky Bru. Right?

The Edgedaily dare not push forward an optimistic opinion to their well read and independent minded readers with HwangDBS Vickers Research sceptical report looming. They posed a question as title, "Back to black in 2013 for MAS?"

Their reservation is justified. Can MAS contain losses for 2012 to RM165 million and turn to profitability in 2013 with that kind of business plan? Where is the income coming from? Danny's ass?

The New Straits Times's Business Times was more brutal and not holding back on HwangDBS Vickers report. They titled theirs as "MAS turnaround plan fails to excite analysts." Hurrah to the new GEIC. Baru ada telor.

So no chips, eh.

But all are holding back to report the rush-rush cut Danny made for Tony F and Din before the CCF which should conclude that it is cannibalisation of MAS by owner and Government for Air Asia's favour.

But that's quite alright. Who reads the newspapers anyway these days? They probably on this blog yesterday.