Rumours have been gong around since early July that MAS is going to be restructured. [Read The Star here].
Stockbrokers have been quietly recommending a BUY on MAS to take advantage of the plunge in shares arising from the alleged shooting of MAS MH 17. The price is too low vis-a-vis it's asset value and MAS has a better asset backing than lean mean Air Asia.
The rumour that it will go private has reached the ears of Wall Street Journal. Supposedly another turnaround plan will be proposed after Raya. Yes, everything will be after Raya.
Most likely, Khazanah Nasional will offer a General Offer and take charge privately like it did to hide the true financial status of UEM. With the same hands that wrecked it in the first place at the helm of Khazanah, serious doubt they can pull off another "turnaround".
That is unless Tun Dr Mahathir is willing to be there as Adviser to guide the National Pride and most valued brand name to Malaysia back to past glory. [Read back our posting Dollars and Sense of Flagbearer]
There will be a lot of hardwork needed and the management, particularly middle management need to be kicked in the right spot out or remain in.
The staff will need to be remotivated or revived their morale from a recent witch hunting done from a certain RM150,000 per month salary Head of Human Resource. The former Human Resource Manager of Danone biscuit factory think work stress is the problem and the solution is a chicken dance. [Read Woo Chee Keong here]
All one need to do is to think of MAS from the perspective of national interest and the path forward can be clearly seen. It would be foolish on government to retrench 20,000 staff. Country lose face and the political implication is multiple of the staff number.
MAS has three major components; Cargo, and Passenger Operation - International, and Domestic.
Cargo is profitable and must continue to be profitable. The role that MAS played to bring tourist, businessman and people to this country has lead to increase trade between Malaysia and other countries. That has translated to benefit MAS through MasKargo.
The problem with MAS lies in the passengers carrying operations which covers international and domestic.
Someone was saying MCA wanted an airline for Chinese and Firefly was established, thus for the controversial Mandarin proficiency requirement for flight attendants. It was not necessary but since we have it, might as well expand Firefly to takeover the domestic route and give Air Asia (AK) a run for their money regionally. It must be profitably driven.
Change that name, it is cool but does not add value and stature. Call it Malaysian Airline or plain Malaysia.
MAS will focus on international and carry the name of Malaysia more than MAS. It must revert to its previous role as National Carrier and flag bearer.
AK cannot be considered as National Carrier for the same reason Garuda is not an Indonesian Carrier or flag bearer. For one, it has no Malaysia on its name, thus does not give brand value to Malaysia but to Asia. AK is listed in other countries in the region and is also associated with other country brand.
As an only for profit organisation, it has refused national and social obligations. The fine example is AK ending the Rural Air Service (RAS) because it is not sufficiently profitable.
MAS could be made part of government tourism, trade or transportation role. For instance, why do one need TDC offices all over the world? That can be combined under one roof with MAS.
In fact, MAS office and presence at Airports all around the world are a better and more cost affective advertising to country than a big TDC downtown office or large expensive billboard.
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| From people to people to trade |
If it is a money drainer, then keep it to few flights a week but presence all over the world we must.
Iran which faced economic sanction see the need to have a national carrier to enable Iranian and foreigners to come to and go out of Iran.
Air Asia could stop their routes when profit is not there any more. But, Malaysia must remain connected to the world. Israel is willing to pay for extra for security for El Al to fly all over the world despite many years of boycott to remain connected and have their presence.
Can MAS afford to do so? With some creative thinking, MAS and Malaysian government can do it.
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| Sold by Butcher from Shell |
They say MAS is bleeding by the day but government has a sizeable tourism promotional budget badly utilised. Lets not waste that fund as political fund to create wasteful unnecessary event to please Ministers' cronies.
Why not re-channel that budget for MAS to play the role of tourism promotion?
If it is going private, MAS does not have to answer and report to Bursa every quarter. It can go on a long term thought through turnaround plan. No need to give a damn of opposition politicians. They are shallow in their thinking of nation building.
MAS could be used as conduit to invest in tourism. As a corporation, they would be more effective and synergistic to be involved in tourism than Tourism Ministry's PAMPENA. MAS has the customer service culture that could help.
If MAS involvement in tourism expanded, most of tourist agencies cannot squeezed MAS any more cause or MAS will compete at their doorstep.
If only MAS management had some thoughts to buy the company providing ticketing system, Abacus which they used to subscribe to, that would have put their hands direct on a valuable database of air travellers around the world. It would have been convenient to pull air travelers to Malaysia
The important thing to do is to bring back the old sense of family and pride back to the staff. Managers of MAS must stop behaving like school headmaster going around with a cane to find fault and scold.
Everyone in MAS must be appreciated because they are serving the nation. They need to be more a listeners than the old school egoistic tendency to demotivate and muscle flexing.
No chicken dance can solve that attitude.
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| Nation builder |
Most important in getting this plan is to have someone who feels strongly about national pride and bringing dignity to Malaysia. It has to be someone so synonymous with nation building
His presence is not to sleep and enjoy the lavish salary and office paid by MAS for his retirement but to motivate, inspire and bring back a sense of pride for serving the nation into the psyche of management - top, middle and lower, staff and down to menial workers.
His presence will attract the trust and harness the right brains to help strategically draw up a proper turnaround plan and not the one level thinking turnaround plans that have been brought in.
He has committed himself for Proton to bring in RM1 billion of R&D funding, thus he can do a national pride revival for MAS too.
After all, Tun Dr Mahathir does not need to bother of Petronas anymore. It is an MNC taking it's own path. His heart is no more there with the attitude of Tan Sri Shamsul Azhar.
The way we see it is him and only him that can inspire MAS back to its former great when it roam the world in 100 countries.
With the way the Wall Street worshipping people in Khazanah thinks, there is no way MAS will ever turnaround. The last so-called collaboration with Air Asia had sinister intention. Malaysia Airport under Khazanah could have raised the profile for MAS and Malaysia but they fail to do so.
Tan Sri Azman Mokhtar has openly said Khazanah will not invest anymore in MAS. So it means he cannot appreciate the need to reinvest to upgrade fleet to stay competitive. Thus he could be thinking of cashing out - liquidating or a selling the parts of MAS.
Dato Nazir Abdul Razak must be thinking of saving CIMB's loan he approved to Air Asia and that was the reason for the manouvre for Air Asia to "takeover" MAS. He must be either thinking of chopping up MAS for Tony F to get his hands in MAS Kargo or commission taking sales to a foreign airline.
The reason MAS could not turnaround was also because the member of the Baord of Directors of MAS and Khazanah has no creativity to do turnaround and create opportunity for MAS. They are too predictably text book and their ideas does not bring about awe.
Among them are the very same people that plundered and failed in carrying out their task for MAS. They are never concerned with MAS. They do not know it's history and thought MAS started as Malaysian Airlines System.
As for sleepy, why was he as Adviser not seen visiting the aggrieved families of the crew victims of MH 370 and MH 17?
Only Tun Dr Mahathiir showed concern and took the effort.
* Edited 25/7 1:30 PM
11 comments:
Japan Airlines is a national "flag carrier".
Yet the Japanese government was willing to let it go into bankruptcy. Under bankruptcy protection, it did a drastic restructuring (slashing jobs and routes, cutting costs), before re-emerging as a lean and profitable airline.
Or how about Qantas - the Aussie flag carrier? Tony Abbott's government has ruled out any bailouts for the airline. The airline has to fix itself. The CEO is slashing jobs and routes and partnering with Emirates.
What about Alitalia - the Italian flag carrier? The Italian government has ruled out any bailouts. Instead, it has allowed a Gulf carrier to acquire a substantial stake in the airline, take over management and do the necessary restructuring (read job cuts, among other measures).
There are enough case studies in the global aviation industry for MAS top management, Khazanah and the government to study and deliberate on.
Here are a few facts for you to consider:
- low-cost carriers are going to take an increasing share of passengers, in the region and worldwide.
- low-cost carriers are going to muscle into the air cargo business (empty space in the bellies of their aircraft).
- cost-conscious companies are going to require their employees to fly "budget" instead of "full service" airlines.
- premium full service airlines will increasingly depend on their "home" airports to be major regional air hubs in order to take advantage of business and transit traffic. Does KLIA have what it takes to compete against Changi Airport, Dubai, Doha, Hong Kong or Narita?
- with increasingly thin profit margins and escalating fuel and aircraft prices, airlines will find it very difficult to get financing for fleet expansion or modernisation.
Not even Tun Dr Mahathir can go against the inexorably irreversible trends in the global aviation industry.
He won't be able to pull a "capital controls-type fait accompli" this time around.
Tun Mahathir should be appointed as an adviser and not Tun Dollah. Tun Mahathir always bring good to anything that he touches. May the Almighty save and guide us to safeguard our national sovereignty. Only a true leader can get us through this difficult times as always.
Tried calling mas for something and every number from every department wont pick up bar the investment division. To save mas, your points are all valid except you didnt mention that its staffs are too comfortable and wont even bother picking up calls. They've grown bigger accross the waist. Mas is bloated in the number it employs. Bloated salaries alone could maybe halve the 4 mil daily it loses. Ridiculous wages to the BoD could maybe slash another mil. The very essence of the problem is that the majority shareholder of mas is corrupt. Not doing what is in the best interest of malaysia per se but lining ones own pocket in the process. Malays who feel first class but are merely on par with corrupted millionaires from lagos, niger, chad and so on. Stupid but corrupted and taking advantages of position. Sad really
the sleepy has no news value and his ideas are out
Producers in Hollywood have a tendency to promote American brands which in turn receive overwhelming support from industries. FedEx was chosen for Cast Away (2000).
Can Dato' Yusof Haslam's family or KRU Productions come up with something to promote MAS through a movie? Something like MAS pilots and crews struggle in flying through a storm to save a child from foreign land who needs urgent kidney transplant in IJN. Or anything else that has nothing to do with violence, terrorists, hijacking or war.
This is what I witnessed on 25/6/14 at the MAS AGM:
A former Mas manager turned lecturer was in her element querying the board on airline economics, branding, outsourcing, among other relevant matters. The reply by Md Nor was general in nature while AJ gave answers sounding like a confused politician.
Another shareholder's questions on "What happened? Where did we go wrong? When will we do things right?" were not answered...
Overall, shareholders were not happy with the board n management but attempts to reject AJ from being reelected to the board were curtailed by the biggest shareholders having many proxies present. Ditto the directors fees.
AJ talked about reboot, restart n radical change. What do all these mean? No details were given. No time frame.
Some board members also look bored which may mean that they also dont know what is meant n where they are heading. Only God knows... May He save MAS!
Following this the newpapers reported that directors fees were being returned.
The directors returning the money is not to be seen as an honest or noble act! If the shareholders votes to reject the fees were enough, why did the chairman and the Khazanah rep (a young man in his twenties who was dressed very simply, not reflecting the image of Khazanah) ask for a poll vote? This shows that they were eager to be paid for a job they failed in! If they sincerely felt they didnt deserve the money, it should have stopped when the shareholders voted the first time.
If they were really honest, the management team should also return at least one month's salary because they didnt do their job as well!
As for the re-election of directors, if the shareholders had their way, one of those mentioned would have been rejected. But proxies who were seen to be favorable to him bailed him out.
How can someone who doesnt meet his KPI, who didnt keep his promise and keeps losing money for the past three years be allowed to continue?
To add insult to injury, the chairman had the courage to say that luckily he has no Mas shares! What?! No wonder they care more about what they get paid than what they do to the company.
What nonsense is this? I say if this is the way GLCs do business, the public's money and our personal investments are done for!
Najib, as chairman of Khazanah, you better look into this! This kind of nonsense will ruin businesses and our economy in no time. You better do something radical about it. Get rid of the non-performers! If you can do that in politics, you jolly can do so in business!
May God help Mas and all GLCs under Khazanah. Amen.
Good points, anon 11.11. all these people tak de maruah langsung. even my monkeys tau berhenti kalau dah makan lebih.
Persoalan yang ingin saya lontarkan, kenapa ahli-ahli lembaga pengarah dan pengurus2 dalam MAS yang besar gaji mereka masih bergayut dalam MAS. Tidakkah mereka berasa bersalah, dengan PAY CHEQUE yang besar tapi depa tidak dapat Contribute kepada MAS. Sepatutnya mereka menunjuk tauladan dengan memotong perolehan mereka agar MAS dapat dipulihkan.
MAS telah membawa keuntungan besar dari segi perkhidmatan pengantara membawa perolehan perlancungan keMsia semenjak tahun 50an lagi. Banyak jasanya. Dari dulu MAS tidak pernah mengecapi bahagian keuntungan dari benefit yg diperolehi oleh operator2 perlancungan. Sepatutnya, MAS kena kira balik nilai jumlah perlancungan yang dibawa kesetiap negeri dan mengenakan sebahagian caj perolehan keuntungan. Ini tidak, bila negara dan negeri untung dari sektor perlancongan, MAS tak dapat apa2 pun. Cuba hitung dari tahun 50an nilai keseluruhan keuntungan yang diperolehi dari sektor perlancungan.. ambil saja kata 15% dari bahagian itu. Rasanya MAS tak akan rugi. Biarlah kita tengok kembali dasar Perkhidmatan MAS kembali dan MEMBINA semula kecemerlangan MAS. Ini adalah masa untuk kita berkorban. Janganlah hanya diukur dari segi nilai ringgit dan sen sahaja. Orang berniaga kadang2 kena berfikiran panjang, jangan diikut dari pandangan orang yg menjaga akaun sahaja. Depa ni hanya tau nak untung cepat saja.
Ingat jangan jadi macam syarikat motosikal yg dicadang jual dengan nilai RM4 dulu. Lihat apa jadi dengan penilaian bodoh juru akauntan tu. Patutnya kita kena caj akauntan tu, kerja dan kembalikan kerugian yg dia telah sebabkan. Aku rasa aku tak akan ampun dia tu hingga ke akhir hayat Negara kita.
Jangan biarkan tangan2 berlagak suci memusnahkan MAS.
"Cargo is profitable and must continue to be profitable."
Obviously reading and understanding financial reports are not your strength. Either that, or most of us have been reading financial reports from MH wrongly...
Persoakannya, jika insiden MH370 dan MH17 tidak berlaku, bolehkah Mas menepati sasaran untuk memperolehi keuntungan pada tahun ini mengikut jadual yang telah diwarwar dan dijanjikan oleh penguran Mas yang sedia ada (yang dikatakan mantap) ini?
Why are the MAS employees' unions still clinging to the belief that MAS is somehow exempted from the brutally competitive scene that is the aviation industry today?
Are the unions deluding themselves into wishful thinking or are they being used by certain quarters who have vested interests and agendas?
I am sure that the more savvy MAS union leaders and members can see for themselves what other airlines are doing to stay competitive.
Yet, when push comes to shove, these union leaders go back to the same tired rhetoric - no job cuts, sack the top management yadda yadda.
Perhaps these union leaders should be sent for internships in airlines which are shaping up to the new realities and see for themselves how these airlines are adapting to the competition.
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