View Full Version : MAS; more woes for the beleaguered national flag carrier
14th Jun 2012, 10:19
Report extracted from Channel News Asia :
Malaysia Airlines fined A$6m for price-fixing
Posted: 14 June 2012 1432 hrs
SYDNEY: An Australian court has fined Malaysia Airlines Aus$6 million (US$5.98 million) for price-fixing linked to a massive international cargo cartel.
Australia's anti-trust regulator said the carrier's cargo division was hit with the fine after it admitted in the Federal Court that it colluded with other airlines on various fuel, security and customs fees.
The admissions related to surcharges on freight from Indonesia between October 2001 and October 2005, a racket in which eight international airlines have already admitted involvement.
"This penalty sees the total penalties ordered against this international cartel increase to a record A$58 million," said Rod Sims, chairman of the Australian Competition and Consumer Commission (ACCC), on Thursday.
"The ACCC's focus on stopping cartel conduct has sent a strong message... cartel conduct is damaging and unlawful because it harms competition and usually inflates prices for consumers," he added.
Settlement has already been reached with Korean Air, Japan Airlines, Qantas, British Airways, Cargolux, Martinair, and the now-merged Air France and KLM.
Cases continue against Singapore Airlines, Cathay Pacific, Emirates, Air New Zealand and Thai Airways International, according to the ACCC, with proceedings against Garuda Indonesia halted pending a High Court challenge.
14th Jun 2012, 11:04
The amount they paid for QPR jersey sponsorship will be paid to the Aussie Courts. Cool. Wonder what the staff will say now?
18th Jun 2012, 07:33
(Bernama) - In the face of prolonged losses, Malaysia Airlines (MAS) and its employees will have to go the extra mile to restore the pride of Malaysia and the national carrier.
The airline that gave most Malaysians their flying experience is now technically bankrupt.
“Currently, MAS remains in business even though it is technically bankrupt due to assistance from the government because the company is a national pride,” said an investment strategist who declined to be identified.
“But this time around the government has to do it right,” he said when referring to plans to turn around the airline as the government is its major shareholder.
MAS has tried to make many turnaround plans in the past whenever it faced falling revenues.
However, its share swap deal with AirAsia was aborted after strong protests from the premium service airline’s employee unions and some sections of the public, as it was perceived that MAS was getting a raw deal.
Now, it has to come up with a new turnaround strategy to maximise yields from its operations and reduce costs wherever possible.
One of the plans being floated is a possible move of its offices from Subang to its main operational hub at Kuala Lumpur International Airport (KLIA) in Sepang.
But this idea of “going the extra mile” to cut costs is said to have met strong opposition from the affected staff.
National Chamber of Commerce and Industry of Malaysia secretary-general Syed Hussein Al Habshee feels that the airline’s management and employees should continue to have an open dialogue on the matter as this is the only way to achieve better understanding.
Speaking to Bernama, he said the issue of moving or not should be the management’s decision alone, and it must have solid reasons behind that move.
Syed Hussein said while the employees’ views should be considered, the airline’s financial perspective also would be taken into account.
Strong bargaining position
It makes practical sense over the long term for MAS to have its offices next to its main operational hub at KLIA, said the investment strategist, who believed the airline’s present management is more than capable of lifting it out of trouble if given the right support and opportunity.
But whether it is a good time to implement the relocation in view of its financial position will have to depend on its priorities and whether the benefits of moving outweigh those of deferring such a decision.
The employees, he said, should also not take advantage of their strong bargaining position at the moment, and should instead adopt a “give and take” attitude for the benefit of the airline.
“Just because the unions have many members, they should not make demands on selfish reasons,” an analyst at an investment bank said.
In managing a company, first and foremost, he said the management must be practical and should not be listening to the employees 100%.
“At the end of the day, for people like myself, let us say, if the management makes a decision that is good for the company, I have to follow or find another job.
“Today the fundamentals of making business work is all about financials. The bottom-line is what everybody is looking at,” he added.
Another analyst said MAS and national carmaker Proton shared a similar problem.
But he felt that the government did not have a suitable candidate like DRB-Hicom Bhd to take over MAS at present “because it’s financially too big and there are also legacy issues and the need to uphold national service”, said the analyst, who also declined to be quoted.
If MAS moved to KLIA, its existing building in Subang could be used for something else that could generate income for the airline, he said.
He agreed that the only obstacle for such a move was resistance from the unions.
Some quarters believed that opposition to the relocation had stemmed from a perception that the valuable piece of property in Subang would benefit other parties instead and not MAS.
Now that MAS is on its own, perhaps it could look at how best to generate revenue from the Subang property.
23rd Jun 2012, 01:09
Now that MAS has settled its claim against Tajuddin, is this the end for the pursuit of criminal charges?
MAS settles suits against Tajudin Ramli
Friday, 22 June 2012 Super Admin
He has claimed that his purchase was forced “national service”, disguised as an arm’s length commercial deal, because the government wanted to appease the investment community and the public.
(The Malaysian Insider) - Malaysia Airlines (MAS) has settled out of court its three lawsuits against ex-chairman Tan Sri Tajudin Ramli, a move the national carrier described as “considerably viable”.
The Malaysian Insider understands that the High Court has allowed both MAS and Tajudin to withdraw their suits and counterclaim respectively.
The matter was settled in chambers earlier today in the presence of Justice Rosilah Yop.
“He (Tajudin) has agreed to surrender valuable land in Langkawi where the Four Seasons Hotel stands,” a court source told The Malaysian Insider on condition of anonymity.
Another source close to MAS disclosed that the national carrier considers the settlement as a viable move which will allow it to “move on and to provide closure to a very longstanding matter.”
It is also understood that an official announcement will be made to Bursa Malaysia later today.
MAS was represented by lawyers from the firm of Lee Hishammuddin Allen & Gledhill, while the firm of Lim Kian Leong & Co represented Tajudin.
Tajudin, who was executive chairman of the airline from 1994 to 2001, had applied to cancel MAS’s suit over allegations he abused his position and concealed his interests in business decisions made during his watch.
Putrajaya also sought to strike out Tajudin’s counterclaim, in which he alleges the government and MAS defamed him with the civil suit for abuse of power while heading the flag carrier.
MAS had accused Tajudin of unconscionable conduct by using his influence to continue the VIP chartering service with the purchase of a Boeing 737 business jet for US$31 million (RM93.5 million) in 1997, despite MAS suffering losses.
The airline also claimed that Tajudin had dishonestly concealed his interests in Cendanasari Insurance Brokers Sdn Bhd, in matters involving a parcel of land in Langkawi and a luxury yacht, Colombo Star.
The Kedah-born businessman had in turn claimed that the suit contains bare allegations with no basis and that MAS had acted with malice and in bad faith in taking legal action against him to embarrass and tarnish his reputation.
Earlier this year, Tajudin settled out of court his debt owed to Pengurusan Danaharta Bhd (Danaharta) and several other government-linked companies (GLCs) for an undisclosed sum of money.
This was despite a High Court decision in December 2009 ordering the ex-MAS chief to pay the state asset management manager RM589.14 million plus two per cent interest per year, backdated to January 1, 2006.
Tajudin has been entangled in a complicated series of expensive suits, countersuits and appeals with various parties arising from his failure to service a billion ringgit loan he took to purchase a major stake in MAS in 1994.
He has claimed that his purchase was forced “national service”, disguised as an arm’s length commercial deal, because the government wanted to appease the investment community and the public.
Former Prime Minister Tun Dr Mahathir Mohamad, however, denied in his autobiography published in March last year that he and former Finance Minister Tun Daim Zainuddin had forced Tajudin to bail out MAS in 1994 for RM1.8 billion.
Last August, Putrajaya intervened and commenced action to put an end to the controversial legal battle by ordering all suits against Tajudin to be dropped.
The move has been described as an attempt by the government to cover-up details found in Tajudin’s affidavit in support of his counter-claim where the embattled tycoon purportedly revealed much of the inner workings behind the purchase of MAS.
According to media reports, Tajudin had also claimed of an over-riding agreement protecting him from liabilities.
The 65-year-old was a poster boy of Daim’s now-discredited policy of nurturing a class of Malay corporate captains on government largesse during the Mahathir administration.
24th Jun 2012, 10:36
By.. Friday Reflections - By B.K. Sidhu (The Star)
THIS year again the number of shareholders that showed up at Malaysia Airlines (MAS) AGM were aplenty.
Some just lingered in the lobby area at the MAS Academy in Kelana Jaya instead of attending the AGM on the second floor.
A lady in her sixties said: “I am already late so I rather just sit in the lobby and wait for lunch.''
Another said: “I am here for the goodie bag and lunch but they don't give us free tickets, and they have forgotten about giving us dividends.” This year MAS rewarded shareholders with a muffin, a can drink, a notebook and a car stick in their goodie bag.
The side attraction at the lobby was the sale of branded perfumes, some up to 50% discount. But the bigger attraction many of the media had been waiting for was for the arrival of Wee Choo Keong (Member of Parliament) as a proxy at the AGM but obviously he did not show up because Parliament was in session. Wee has been very vocal in Parliament and on his blog over the MAS/AirAsia share swap and purportedly seen to be in support of MAS unions and associations in what they claim is their fight to save the airline that they are so passionate about. It was partly due to the objections from the unions and some politicians that the share swap was reversed recently.
That aside, there were other shareholders who listened intently to what MAS board had to say. It was also during yesterday's AGM the renewed business plan was unveiled.
Those in the know of the first business plan announced previously said “the only difference from the December plan is that MAS will take one year longer to be profitable.''
Still there were some shareholders who came prepared, and were furiously taking on the directors to task with their questions. The AGM is the only time shareholders can ask whatever they want for they have a vested interest in the company.
Among others, the shareholders queried on the executive director's fees of RM3.7mil which they say was high when there were no dividends for the shareholders; why the board composition was lacking airline people; MAS had too many staff; MAS fares were too high to be competitive.
One MAS ex-employee felt the airline has an identity crisis with no corporate image, and a shareholder even suggested that MAS should consider giving out free seats to be popular. That is what many of the low-cost carriers do.
At the AGM, MAS also admitted that corporate travel had decreased as people go for AirAsia and this could, perhaps, be an indication for MAS to revisit its strategy. Its new plan is to focus on the regional market as there is where the growth. It also wants to sweat its assets and increase productivity levels to tap the market but it should also look at what its peers in the region are doing in terms of capturing growth from the different segments of the market and not relying purely on premium travel.
Most of the regional premium carriers have low-cost units but MAS dismantled Firefly's jet operations last year. Yesterday, there were also reports suggesting that the Government should issue more licences for low-cost airlines because people are beginning to see competition lacking in the local market space.
Later at a press conference, MAS said it had not discounted the thought of having low-cost operations but it was not its priority. For now, it believes that the focus is to earn more and spend less.
Whether or not MAS should revive the Firefly jet operations remains its prerogative, but whatever it does, it has to listen to market demands; listen to its investors, shareholders, the employees, and it is about seizing the opportunities that come its way. Or else the airline will only have itself to be blamed if it has to undergo restructurings, one after another.
25th Jun 2012, 05:05
"MAS must win back customers it lost to other carriers due to price competition
By B.K. SIDHU
Yesterday must have been a busy day for those at Malaysia Airlines (MAS) (http://archives.thestar.com.my/search/?q=Malaysia%20Airlines%20%28MAS%29). They were once again briefed on yet another business plan to chart its journey ahead.
To some, the new plan was no different from the one crafted in December, and it lacked details on the implementation.
The reality is, there is a slight difference in the sense that the return to profitability timeline has been pushed a year later to 2014 and the airline will continue to operate its long and short-haul business under one roof instead of separately.
This new plan which MAS group CEO Ahmad Jauhari Yahya (http://archives.thestar.com.my/search/?q=Ahmad%20Jauhari%20Yahya) says is a “renewed plan'' is about cost cuts and revenue generation. MAS has come to realise that it needs to sweat its assets and earn more as it cannot be on life support forever.
There is a 6.3 sen gap between its revenue per seat km and cost per available seat per km. Its revenue per seat km basis is 18.5 sen, as per its 2011 annual report, and its cost per available seat km is 24.8 sen. With the new plan, MAS hopes to rev up revenue and cost on a per-seat-km basis by 10% and 20% (or 5 sen) respectively.
The question is, can it generate the revenue it needs and bring cost down when its cost are somewhat fixed?
Jauhari told his people the strategy is to win back customers. That would involve the need to revamp MAS commercial team (though parts of it is already in process), review its sales and distribution efforts, fix corporate travel, revamp the internet booking engine, enhance branding and grow ancillary income like excess baggage fees.
From the operational side, he wants to realign the network based on demand and profitability, and increase aircraft utilisation. Staff productivity levels should then go up, which will then increase the airline's efficiency. Other measures include a review and revamp of legacy process, as the decision-making process currently involves several layers. If work can be done in-house, there would be less reliance on vendors. The airline also plans to overhaul procurement and fine comb each and every contract that has been inked.
These were some of the suggestions the MAS unions and associations gave management to turnaround the airline.
MAS is often said to have a bloated workforce and cost cuts should ideally involved jobs cuts. But Jauhari is steering clear of this sensitive topic. MAS has 20,477 employees and its staff cost is its third largest expenditure after fuel and other cost. Those familiar with the matter claim that eventually there will be “some alignment; it is a question of timing.”
But for now, the need to rev up revenues is critical. In order to to do that, MAS wants to expand its network instead of shrinking it. Asia remains its playground and MAS will fly to new destinations and add more frequencies to existing routes. Increasing frequencies is necessary with MAS becoming a One-World member by year end as it would need to feed traffic, says a source.
It is learnt that MAS will expand further into Japan, China, India, South Asia, and Asean. Those in the know claim that MAS may form a code share though it is still in talks with Air Mauritius to offer connectivity into Johannesburg and Cape Town, as it had earlier pulled out of these stops.
The new points it is looking to add include Sapparo, Haneda (it is not known how MAS is going to get rights for this and why it wants to reinstate this route when it axed it earlier this year), Chengdu, Wuhan, Ahmedabad, Kochi and even Calcutta. It may add frequencies to Jakarta, Manila, and to points in Laos and Vietnam, among others, those in the know say.
“MAS also plans to mount flights into Katmandu in Nepal in December this year,'' they say.
Apart from optimising its aircraft usage, especially the B737, it is learnt that MAS plans to limit aircraft used to three, namely A380, A330 and B737-800. It will return the other aircraft types including the B777 provided it can be modelled after the A330, to carry more fuel to do the 12-hour flying radius instead of the existing nine hours. With that, it can be used for the European sector, they say.
MAS' end game - boost sales to bring in the income.
That job is now in the hands of Duncan Bureau, the new head of sales. Early indications are that he is “savvy and knows the industry well.” It is a positive but the challenge is to “price it right” as for now, experts say MAS has “priced (its fares) out of the market.”
“It has to benchmark itself against carriers like Emirates, Etihad, Qatar Airways and even Singapore Airlines. MAS has to win back some of its customer that have gone to these carriers because of fare pricing.
“If you are in trouble and want to rev up revenue, you have to be in the competition and fill the aircraft instead of sticking to high fares. The emphasis going forward should be to fill the aircraft and generate as much revenue as possible, as it is better to get something rather than not get anything at all. People not on corporate travel are more price conscious and they do not mind waiting two to four hours at the airport in order to save on fare.
“Being premium does not mean that you can price yourself out of the market,” says the expert.
The fare strategy aside, some are wondering why MAS is not riding on the A380 to communicate to travellers the selling proposition of this new beauty.
“We are baffled with their communications strategy. The A380 commercial flight is on July 1 but it is not shouting the good things about its A380, where the flat beds are much bigger than its competitors, the virtually noise free headphones, its in-flight entertainment, its service and its glorious food,” says an expert.
“MAS should, by now, be drumming home the differences between their A380 and that of their competitors, namely, SIA, the Emirates and Qatar Airways. Why not highlight the pluses and get the market excited,” he adds.
Those in the know claim that MAS' load factor for the A380 for the first month is more than 90% due to the summer holidays, the Euro 2012, and the fact that traditionally, this is a busy period.
MAS, which recently took delivery of its first A380, returned it to Toulouse, France to get its economy seats re-configured from four to three seaters. That in itself has got some people wondering why the fit-out was not done prior to taking delivery, which is the industry norm. However, those in the know claim that there was a late booking for the seats, which resulted in the delay. Hence, the aircraft had to be re-configured. That exercise involves the burning of extra fuel at a time when the airline is trying to keep cost down.
That aside, those in the know claim that MAS may get its second A380 ahead of schedule from end-August to mid-August. MAS could be using the second A380 for its London route too, making it a daily service compared to the current thrice weekly schedule."From the Star-
As I posted earlier, MAS confirms it getting rid of their long-range jets, with only the A380's remaining that can fly to Western Europe, Eastern Oz or the US (2 777's this year, 6 next year, and 6 the following year). Look at the routes that the 777 flies for MAS now and scratch most of them off the map, as the 330 can't fill in on the longer range flights. This is not the way to become 'the' preferred carrier for SEAsia's premium clientele. All you 777 guys, get ready for the year-long course in MAS A330 flying that awaits you when they park the Boeings. Or simply do what so many of your brothers have done and skip to the Sandbox.
MAS is only consistent in their inconsistency, frequently contradicting themselves in the same sentence. Rudderless, clueless, paralyzed are all words that describe those in charge. Though I believe handcuffed by way too many greedy outside forces probably better describes the situation. AJ, I feel nothing but compassion at your impossible task. Thank goodness you are making millions to be the whipping boy for everyone.
25th Jun 2012, 06:07
MAS " kowtim " ed with Tajuddin,
I wonder if MAS has " kowtim "ed with rain5, rainwho bolakrishnan? Remember he expected RM30 Million settlement! Did his fengshui compass spin to the jackpot spot?
26th Jun 2012, 08:54
I guess... we still flogging a dead horse..by the Malaysia PM. its pityful.. Look what happen to Firefly.. TF blew out the fire from Firefly a@<hidden> TF with MASWING..haha. TF..is real life god Shiva...
MAS Can Operate At A Lower Cost Via MAS-AirAsia X Supplemental Collaboration - Najib
June 25 (Bernama) -- The supplemental collaboration agreement between Malaysia Airlines (MAS) and AirAsia X was signed to provide an opportunity to the national carrier to operate flights at a lower cost, Prime Minister Datuk Seri Najib Tun Razak told the Dewan Rakyat.
He said the agreement and two other memoranda of understanding inked after the MAS-AirAsia ahare-swap deal was shelved was for procurement, aircraft repair and maintenance services.
"MAS had the opportunity to enjoy better terms and conditions through sharing of equipment and services besides sharing and selling reserve capacity to other airlines," said Najib, who is also Finance minister, in his written reply to Wee Choo Keong (IND-Wangsa Maju).
Wee had queried why a joint venture had to be formed between MAS and AirAsia X after the MAS-AirAsia share-swap deal was revoked on May 2.
Najib said such collaborations had to be continued to increase MAS' business snergy by enhancing MAS' flight services in the main market, improve passenger handling and optimum utilisation of resources.
He said MAS' business plan focused primarily on engineering and maintenance as a strategic move to enhance the potential of the Malaysian Aerospace Engineering (MAE) not only for aircraft maintenance but also to further develop maintenance, repair and overhaul services.
"This will make MAE more competitive and can entrench its position in the increasingly challenging and rapidly developing aviation industry," he added.
26th Jun 2012, 09:20
what the fark... straight to the point now. what the hell does MAS have to gain from AAX? Pax handling? balls! optimum utilisation of resources? what resources?
boring la.. i've had it up to FL999. i've lost hope with this management (company and country)
ye, saya tak suka, ye, saya akan keluar.
27th Jun 2012, 01:44
Nobody gives two sh*t about MAS no more. All waiting for it to die together with the ruling regime. Too many pigs in the whole set up, rotten to the core and we have this bangla lookalike conman coming in to skim all the goodies. Firefly destroyed, an able Chinaman dispatched off and all the pigs are happy. They don't care about MAS or Malaysians, they only want the ketuanan agenda to succeed at fill their pockets at the same time.
28th Jun 2012, 07:55
Aye, aye Ngap...that's the true assessment. All rotten effects of the Malay first policies are really coming home to roost. The snakes then pick off the choice bits and the tax-payers will be forced bail out all the failed GLCs.