The Utusan Malaysia ran a story anticipating the collapse of the Comprehensive Collaboration Framework (CCF or dubbed merely "corroboration") between Malaysia Airlines Berhad and Air Asia Berhad.
There has been talks before. Read Syed Akbar here.
The reason cited was that it did not benefit MAS but only pushed MAS lower into the abyss. However, the source to Utusan Malaysia claimed the cancellation would have negative impact on MAS.
Can this news be trusted or it is just a decoy pulled by the current so-called turnaround 'management team'?
We at ABITW holds the believe that it is better that the corroboration did not fall through because Khazanah or Azman Mokhtar himself have 'decayed' in his words to keep each airline remain in their respective matrix or quadrant.
Typical con and insult or 'consultant' thinking. A much better word would have been market segment.
How is MAS to survive?
Let's read the Utusan Malaysia news first:
Perjanjian MAS, AirAsia batal?If it is true, one real reason could be political.
KUALA LUMPUR 11 Mac – Pertukaran saham antara Malaysian Airline System Bhd. (MAS) dan AirAsia Bhd. (AirAsia) dipercayai akan dibatalkan kerana perjanjian yang dilaksanakan sejak tujuh bulan lalu tidak memberi sebarang faedah dan kelebihan kepada MAS.
Sumber berkata, spekulasi pembatalan pertukaran saham MAS-AirAsia itu kini semakin hangat diperkatakan dalam pasaran dan dipercayai turut menjadi perhatian kerajaan.
"Sama ada perjanjian tersebut benar-benar dibatalkan atau dirombak semula, perkara itu dijangka berlaku.
"Cuma persoalannya bagaimana ia akan dibuat kerana dikhuatiri pembatalan atau rombakan akan memberi implikasi kos kepada MAS.
"Kalau ia berlaku (implikasi kos), dikhuatiri akan memberikan kesan yang tidak baik kepada MAS yang kini dilanda krisis,’’ kata sumber itu kepada Utusan Malaysia.
Sila dapatkan naskhah Utusan Malaysia hari ini atau ikuti Utusan Online selepas 6 petang untuk artikel penuh.
We had wrote earlier that MAS and the airline industry can potentially effect 100,000 voters in Selangor against Barisan Nasional.
Recently in a meeting, the union warned Prime MInister Dato Seri Najib that they will not vote BN if their jobs are affected. The staff are currently unhappy because there is planned personnel cutback from 22,000 to 5,000 for long haul and 5,000 for short hauls.
Thus far the management promises no retrenchment benefit and unethically 'encouraging' good senior staff to leave the company or go for free transfer to the two operations.
The heartless and ruthless cum Tony F's proxy, Danny Yusoff will lead the short haul, while the clueless puppet Ahmad Jauhari will lead the long haul. That is one dream choice of employers Khazanah had lined up for MAS employees.
Apart from the stated benefit reasons, there is a major fundamental flaw with the current MAS management's so-called 'turnaround' plan and even with the view of Tun Dr Mahathir (although we notice he has begin to change his view) for MAS to cut further cost.
MAS is a full serviced premium airline, thus the low cost, low ticket price and thin margin mentality of Air Asia is not suitable.
Currently, MAS runs at a cost of 25 sen per cost available seat km (ask). In comparison to Cathay Pacific at 30 sen, and SIA at 29 sen, it is already the lowest cost premium airline in the region.
The Danny Dungu Yusof's plan to cut cost by more outsourcing and repeating his Bina Tak Cukup Fikir's WAU plan of outsourcing is ridiculous and not addressing MAS fundamental problem.
MAS's problem lies at the revenue side.
Despite their higher cost, Cathay Pacific achieved a revenue of 33 sen per ask and SIA 31 sen per ask. While, MAS is on the deficit and going at 20 sen per ask.
Clearly the problem is marketing, which under Tengku Azmil was a mess.
Other than having nuthead in the form of Dr Amir in the commercial team and there was no director but an accountant airline newbie as CEO, the main reason was inferior product.
The root of the marketing problem was during the time of Idris Jala. The Business Tranformation Plan entails improving product. Our inside source told us that Azmokh refused to spend for refurbishment or upgrading for latest airplane with up-graded features.
With a product problem, MAS pricing was out of the market.
Then, one can't do product placement and promotion with an Assistant Commercial Director throwing chairs at each other in meeting and each Assistant sabotaging each other at the cost of the Company?
There you go.
But this does not mean Idris Jala was any better as being praised by fellow Evangelist, Lim Guan Eng. He was a pathetic butcher from Shell unable to see the wood from trees and simply assumed retrenchment and asset sales as automatic solution.
He made no money and was losing RM100 million a month but covered it up by selling asset and passing it off as operating profit. Remember we said of past practise in MAS to use non cash profit item to cover for operation loss?
When he couldn't get profit, he hedged fuel at the top and MAS profit and loss goes out of whack to reflect the oil market then the company's true profit and loss. Idris got caught when he announced profit but did not disclosed the more than RM350 million operating loss. That cost him his job at MAS.
Oh well, why should we believe Guan Eng's praises. He is but a compulsive liar who does it publicly on a weekly basis.
Despite commercial being the problem, the so-called turnaround idiots were cutting profitable routes and strategic routes which are part of the important network of airlines.
They closed up or let's use a canggih word, repositioned the profit making Firefly into Sapphire at Tony's behest.
And outsourcing planned profitable operations like cargo.
Real idiot there and that ends up as cutting up capacity by 12%. You cut capacity like what the stupid Idris Jala did, you cut your potential income source.
It is like you close a line in a factory and your profitability potential is slashed down immediately.
All these seems to benefit only Danny's real company, Air Asia.
Air Asia X was heard to try and pick the pieces of destinations like Sydney, London, Buenos Aires, etc.
Insider's sources claimed that Tony F and not surprisingly possible proxies of Khazanah people and even the management team have interest in companies getting the outsourcing of engineering, training, ground handling and cargo business.
Over time, we shall name names.
What makes it worse for MAS is that the CEO is clueless. He brief the staff that Air Asia has no flight for long and medium haul. Air Asia-X itu apa bang?
The real concern we have with Air Asia is that not only it is based on low cost, low price and low margin, it is also based on high growth model. Air Asia's cost is 10 sen per ask and it's revenue is 13 sen per ask.
They have to cut corners and stretch for profit. That is the reason they are being mischievous and unethical. Syed Akbar disclosed that Singapore have refused to maintain Air Asia planes and Qatar and Brisbane airports are not allowing Air Asia airplanes to land.
Recently Air Asia have been cutting their own routes. It is so difficult to secure routes and they closed it up like suka hati mak bapak dia orang punya.
Read Syed Akbar here and here.
How will Air Asia's "grow and grow and grow" strategy to work?
Without high growth model, who wants to invest in a company with low profit margin company in a highly capitalised industry? For those too impressed with Air Asia, think about it
Come down to earth or Air Asia will go under.
Air Asia has got a fleet of 110 airplanes and ordered up to 300 from Airbus.
Rumours were saying Tony F had boasted that he verbally told the French President Sarcozy to be prepared for 500 air planes. It was around the time he had issue with the French over the Peugeot F-1 engine.
Thus far it will cost Air Asia up to USD6 billion. So, where will Air Asia get the money to pay for that and the RM1 billion for MAS rights issue?
We strongly believe these MILF-ers entered MAS and got employed inside MAS to secure and draw out information for the final "rape".
Don't be simplistic and demand fast answer as to just take Air Asia as partner for MAS to turnaround it. Air Asia have not gone around the block and yet to face a crisis. Most companies with similar "growth" models get wiped out in one crisis.
We've not known the financial situation of Air Asia-X. Not many knows that it is a losing concern.
What about the financial situations of all those Air Asia's subsidiaries in all the countries they fly to in Asia. The partners of each one of them are politicians or dictators which for all likelihood are milking the companies. No one really knows.
That is what we meant of Air Asia as potential Pan El of the new millenium. If you have no idea what is Pan El, that should tell that you are still young on the corporate game. Air Asia can possibly bring down the regional stock market.
If not for Air Asia as the choice, the public wants another solution fast. Many are fed-up with the repeated loss of MAS. How much more recapitalisation and public money will be used to pumped into MAS?
Hantu Laut here have even talked of closing up.
If that is the case, who will service East Malaysia? Air Asia?
Not on your life! By the time they say so, they are probably six feet under and saying it for the sake of a lifeline. Bankrupted!
MAS needs RM6 billion for 2012 and RM4 billion for 2013-2015. We can't simply closed it. MAS has commitment like the A380s. It's got to carry on.
Ponder the choice; a tried and tested company that we've spent more than 30 years to build and are familiar with or another which is not tested?
Even if the company had been profitable, MAS would still need to recapitalise to prepare itself for bigger operation and sales volume.
The solution is to save it and stop the leakages like to the likes of Air Asia, LSG catering, Symphony, and Tony F proxies.
Get true airliners, who understand airline business, to manage. There are many honest and dedicated professionals if the Government care to listen to the right advise from the right honest people.
Not a loud rude obnoxious opportunist ... conman like Tony F who is getting on the public nerve. You expect public will support MAS with Tony F around? Read Jailani here.
Government has to kick out the incompetent Azman Mohtar. He has not even been tested to manage a company and yet he is allowed to manage Khazanah. He is merely a stooge for Tan Sri Nor Mohamad Yakcop.
Retrain him in basic business management and see if he can manage a bugger stand profitably. If can make money, we'll give him a second chance. Send Danny to some Chinese shopkeeper to learn the real accounting and some basic value like honesty, dedication and hardwork.
Put someone tested, experienced and young at the top of Khazanah like Dato Abdul Wahid Omar. Enough of these PTD-like and exclusive elite mentality of MCOBA boys messing up one GLCS after another GLCs
The MAS staff has to change their attitude too.
With the company in such a mess, why should MAS want to have new uniform and launch it in Hamburg, and kept moving and renovating offices.
The best they did was to spend 18 million sterling pound to advertise for the home game while Air Asia take the away game advertisement on the jersey of relegation bound QPR. Genting pays for less on Aston Villa and Danny says it is justifiable.
That's the Dungu Danny that Amokh entrusted to fly MAS but will end up running it aground... !
UPDATE 10:35 AM 13/3:
12-03-2012 @ 9:15 pm: TV3 prime time news at 8:00 pm also gave a lengthy report with regards to the news of “reversing or cancellation” of the secret MAS-AirAsia share swap and CCF. Of course, Khazanah headed by Tan Sri Azman Mokhtar, the ex founder of BianFikir Sdn Bhd refused to comments on the news. Tan Sri Tony Fernandes of AirAsia Bhd, AirAsia X Sdn Bhd and Tune Air Sdn Bhd has tweeted to say that he was not aware of the said news.
Taken from the blog of Wee Choo Keong here. Do visit the link.