Mutiny on the Board of MAS?

The cat is out of the box.

Everyone knows that the union had met the Prime Minister on February 14, 2012 and by now, the enquiries coming from the Prime Minister's Office (PMO) must have put heat on MAS management.

Azman Mokhtar is heard to be at odds and getting vindictive with certain officers at PMO. If CCF unwind, it is a matter of honour that he quit his job. He knows he and Danny will be a corporate outcast and internal audit will reveal he failed in Khazanah.

Utusan Malaysia's report on March 12th here must have started this nervousness. The management must be getting more nervous with statement after statement from the union thereon.

While all eyes are awaiting PM to make a decision, out of the blue, MAS Chairman, Tan Sri Mohd Nor Yusof made a statement of support.

He said the Board of Directors is standing firm behind the CCF and expressed their “commitment and support for the management team of Malaysia Airlines, led by group CEO Ahmad Jauhari Yahya”.

Where did that come from? Does AJ need words of support? Did Mohd Nor realised that he had superceded the PM? That could be construed as mutiny.

Another Lembaga Felda-like mutiny in the making?

The controversial Mohd Nor's statement in The Star report below:

Saturday March 17, 2012

MAS: It’s not a flight of fancy

By WONG SAI WAN
saiwan@thestar.com.my

KUALA LUMPUR: The Malaysia Airlines board is standing firm behind the co-operation with AirAsia as well as the share swap between Khazanah Nasional Bhd and Tune Air and has asked that the deal be given a chance to work.

MAS chairman Tan Sri Mohd Nor Yusof also expressed the board's “commitment and support for the management team of Malaysia Airlines, led by group CEO Ahmad Jauhari Yahya”.

“Malaysia Airlines is a very sick patient, and its condition is quite critical. Indeed, there are a full range of prescriptions available. Judge us by the result, not by the choice of prescription,” he said in a statement issued here yesterday.

Mohd Nor's backing for the deal follows a meeting between MAS unions with Prime Minister Datuk Seri Najib Tun Razak earlier this week to express their opposition to the Comprehensive Collaboration Framework (CCF) involving a share swap between Khazanah and Tune Air.

Time to soar: Mohd Nor says the share swap with AirAsia is not part of the problem, but part of the solution.

It was learnt that Najib had also summoned Mohd Nor and Ahmad Jauhari to his office where the two airline men argued for the deal.

Saying that passing judgment on the CCF and share swap now was premature, Mohd Nor said people should judge the team by the results under their new business plan.

The airline announced last month that it recorded a huge loss of RM2.5bil last year but expected to make a turnaround this year when its new aircraft, including five super jumbo Airbus A380, come into operation.

In August, Khazanah took up a 10% stake in AirAsia while Tune Air, the investment vehicle of AirAsia founders Tan Sri Tony Fernandes and Datuk Kamarudin Meranun, bought a 20.5% stake in MAS.

On top of the share swap, a collaboration agreement was signed simultaneously by MAS, AirAsia and AirAsia X, which would effectively see MAS concentrate on being a full-service premium carrier, AirAsia on being a regional low-cost carrier and AirAsia X, a medium-to-long haul low-cost carrier.

“The Board is confident that the CCF will benefit both Malaysia Airlines and AirAsia by promoting synergies in many areas. I would like to be very clear in stating that the share swap is not part of the acute financial problems at Malaysia Airlines; it is part of the solution,” said Mohd Nor.

AJ is a man of impeccable record as Manager CEO in two previous public listed companies he was attached to before MAS. Why the need for such statement?

Could there be truth that he is not comfortable being made puppet to a young ciku like Rashdan and an untested business managers like Amokh? Both are examples of what constitute rising to the level of incompetence.

In this blog's previous posting, we've told of rumours of Mohd Nor berating AJ for expressing desire to quit to PM. Is this a desperate attempt to make AJ stay?

Why does Mohd Nor need AJ around when it is Rashdan and Tony F that is really calling all the shots in MAS?

A more important question is why must Mohd Nor make this statement before Najib make his decision?

He sounds overzealous and nervous. Has he got something to hide to keep CCF going?

After all, words are that Tony F too spoke to the Prime Minister and he expressed his grave concern to friends of Najib's penchant of reversing Government's decision.

Idris Jala, the previous failed CEO that couldn't operationally turnaround MAS but was merely doing asset sales, made a statement in favour of the collaboration. Si Guan Eng bodoh boleh puji dia!

MAS-AirAsia collaboration workable: Idris

Business Tiimes
16 March 2016

By Presenna Nambiar

KUALA LUMPUR: Performance Management and Delivery Unit (Pemandu) chief executive officer Datuk Seri Idris Jala maintains that he believes both Malaysia Airlines and AirAsia Bhd can work together.

“That means competing in areas where they (MAS and AirAsia) will define to compete, and agreeing in areas where they need to work together.

"So as a team I understand they are working out those boundaries, working out the details and in due time they will announce it,” he said yesterday after attending a monthly National Committee on Investments meeting.

Idris, who is also Minister in the Prime Minister’s Department, added that it is very important that both MAS and AirAsia comply with the recently enforced Competition Act.

“The conversation that we have (with them) is that they are doing everything they can to comply,” Idris said.

On how a possible reversal of the share swap between MAS and AirAsia would impact Pemandu’s Government Transformation Programme, he said: “Well we cannot speculate.

As the Minister of Transport said yesterday, he has not heard of any evidence that shows that (a reversal) is going to be the case. Let’s leave him as the authority on this,” Idris said.

Meanwhile, Minister of International Trade and Industry Datuk Seri Mustapa Mohamed said the RM113 billion private investments the ministry has set for 2012 has taken into account the troubles that the global economy might be facing this year.

“In all our conversations with investors, they have not said they will cancel investment plans due to the European crisis. This is a function of these investments being long termin nature,” Idris added.

True, the Deputy Transport denied such but such denial could at times be followed with a major announcement. It is basically a no comment statement.

Idris should not try to play dumb. Oh well he was actually one when he was at MAS. The MAS management team are not figuring out the boundaries as Idris decribed, they had it all planned out what is in it for Tony F.

The report on Kong Cho Ha below:

The Star
Wednesday March 14, 2012

MAS-AirAsia deal rumoured scrapped, but nothing concrete so far

Behind The News - By Leong Hung Yee

DESPITE all the brouhaha surrounding speculation that the Government is re-looking the share swap deal between Malaysia Airlines (MAS) and AirAsia Bhd, all relevant parties aren't saying a thing.

The latest to be asked on the matter was the Transport Ministry, whose Minister Datuk Seri Kong Cho Ha said his ministry was unaware of any development and had not received any information on the said deal.

“No, I have not received any reports. I won't say anything at the moment because I have not been informed yet of any changes to the current arrangement,” he told reporters on the sidelines of the World Cargo Symposium 2012.

Kong said that was a decision to be made by the relevant companies and he could not comment on anything for the time being.

MAS group managing director and chief executive officer Ahmad Jauhari Yahya, who was also present at the event, succeeded in dodging the media who were determined to pose the same question to him.

Speculation is rife that the Prime Minister is considering aborting the share swap deal between both companies as the alliance had failed to show any improvement.

An Air Asia aircraft (background) prepares for take-off while a MAS aeroplane is taxiing on the tarmac of KL International Airport. Speculation is rife that the Prime Minister is considering aborting the share swap deal between both carriers as the alliance has failed to show any improvement.

A local news portal reported last week that the Government was also considering taking MAS private and asked Khazanah Nasional Bhd to buy back a 20.5% stake that has been exchanged with Tune Air Sdn Bhd for a 10% stake in budget carrier AirAsia.

The report also said that MAS Employees Union (Maseu) had met and urged the Prime Minister to abort the deal. MAS employees' complaints include the management style of deputy chief executive officer Mohammed Rashdan Yusof. Another complaint is the talk of being redeployed outside MAS to the short-haul premium airline headed by Rashdan as that would mean a loss of benefits.

Both Khazanah and Ahmad Jauhari have yet to respond to earlier StarBiz queries.

“While the cries of the union workforce of MAS over the need to protect their jobs are felt by the Prime Minister, we have reiterated that the key low-hanging fruit for MAS to pick lies in trimming its excessive workforce (MAS has some 20,000 employees versus AirAsia's 9,000 and Singapore Airlines' 21,000),” OSK Research said.

Furthermore, the research house said with routes between AirAsia and MAS already rationalised as well as key employees from AirAsia being deployed to MAS, it believes the unravelling of the share swap deal inked last year would not bode well for the Malaysian corporate scene.

“Aside from scrapping the share swap deal, rumours are abound that the union is requesting MAS (in an attempt to protect jobs) to abort its plan to start a new premium short-haul carrier (and instead focus on Firefly) as well as abort its planned entry into the oneworld alliance.

“We think any reversal of the share swap is highly unlikely but we do not discount this possibility entirely,” OSK Research said.

MAS and AirAsia has entered into a share swap deal that saw AirAsia group chief executive officer Tan Sri Tony Fernandes becoming a substantial shareholder of MAS with a 20.5% share. Khazanah Nasional Bhd, the controlling shareholder of MAS, in turn, owns 10% of AirAsia. Under the collaborative agreement, both parties would cooperate in the areas of ground handling, training and engineering, among others.

As a result of that, MAS and AirAsia now work together instead of competing furiously against each other. This has also raised concerns of a monopoly in the domestic airline industry and prompted the Malaysia Competition Commission (MyCC) to probe if there was a breach of anti-competitive behaviour and abuse of dominant position in the deal, which was signed in August.

The recent route rationalisation by both airlines have also come under close scrutiny for anti-competitive behaviour.

MyCC had given AirAsia and MAS a month from Jan 20 to provide the relevant documents. However, there have been no public disclosure on this issue so far.

When contacted, MyCC chief executive officer Shila Dorai Raj said: “Not taking any questions on this for now.”

MAS aims to be a premium carrier and the best in class. It has thus far cut 9% of its unprofitable routes to stem losses and by mid-year will launch a short-haul premium service to tap into the East Asian market. But for now, the carrier need to get money to foot bill for all the aircraft it has ordered.

The flag carrier expects its capital expenditure (capex) for 2012 to be at RM6bil and for 2013 at RM3.5bil due to aircraft deliveries, including six A380s for this year and next. The first A380 will arrive in Kuala Lumpur on June 18.

MAS recently reported a RM2.5bil net loss for financial year ended Dec 31, 2011. It is currently looking at several options to finance its capex, including spinning off some of its non-core assets. It is giving itself 60 days to come up with a plan to strengthen its balance sheet.

The airline's plan to form a joint venture with Qantas has fallen through as talk between both parties has been terminated. Qantas said the discussion with MAS could not continue as the parties were “unable to reach mutually agreeable commercial terms”.

The pro-unwinding side is beginning to get support by the likes of The Star's Gunasegaran here. Unlike politically inclined Malaysian Insiders here, and here, who see it narrowly from election perspective and bame Najib inclined, Guna see it from the perspective of competition.

Although he has been lately exposing abuses after abuses by Air Asia on MAS (read a few here and here), Wee Choo Keong was first to raise the issue of anti-trust. Read here, here, here and here.

Whilst, others are lost in the "how to" of unwinding agreement and was looking for an easy sell option out. Read Risen Jayaseylaan here.

Anyway, now we know.

Despite Idris Jala's good words for his fellow collaborators in shredding MAS to ruin, it is not supported with confident words from the Minister of Transport and AJ himself. Thus the simplistic ploy to express support for CCF and AJ.

This is a classic Tony F bulldozer.

Only someone as unrefined and with poor up bringing like Tony F do not realise that he has broken unstated protocol to supercede the PM and using the media to pressure the PM.

This is totally unbecoming because these people have access to meet, talk and convince the PM. It is unlike two bit blogger like yours truly and union members, that had to wait almost three months and MAS near to ruin, before they could get an appointment to meet the PM.

Why are they nervous? Do they have something to hide?

Is time running out on MAS or Air Asia? MAS has the revenue size to sqeeze out profits by cutting leakages and improving sales, but Air Asia will be doomed if it does not grwo (not just profit).

Tony F is the one under real pressure and pushing the table on PM.

PM has a lot on his table before calling the election but do not play that cheap media game.

He has to think of CIMB too. Heard CIMB is not doing to shabby. Nazir should be the last to get bail out. Definately, not after having many deals sent his way.

The last the PM needs is another attempt of mutiny like at Lembaga Felda. Try if you wish to see the Najib you've never seen before.