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Sing Yew

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Posts posted by Sing Yew

  4. Posted · Report reply

    I managed to book the fare for 2 pax SIN-MEL-SIN for SGD403 each. Managed to grab the last 2 seats for the June holidays. Not sure if I am looking forward to a flight chocked full of noisy school kids but hey, for that price I cannot complain. :lol:

     

    SGD 403 return is a bargain.

    When does school holidays start in June ?

  6. Posted · Report reply

    But the CEO of CX clearly clearifed that fuel hedge is not the main losses..the promary reason is due to drastic reduction in demand

     

    Fuel is still one of the major culprits.

     

    As quoted below and also by CX's Chairman:

     

    Cathay Pacific Chairman Christopher Pratt said: “Having made a painful adjustment to high fuel prices, the aviation industry now has to adjust to a severe economic downturn. Cathay Pacific expects an extremely challenging year in 2009. Passenger and cargo demand are expected to remain weak and, if fuel prices remain at their present levels, further losses on fuel hedging contracts will be incurred (although they will not be at the levels incurred in 2008 and the actual cost of fuel will be substantially lower than in 2008). Up to the end of February, unrealised mark to market losses on fuel hedging of HK$1.9 billion have been incurred in 2009, compared with HK$7.6 billion for the whole of 2008. The 2009 losses principally reflect reductions in the forward prices payable for fuel during the periods in which the relevant fuel hedging contracts will mature.

     

    Source: Link

     

    [Airline braces for more pain following 2008 record loss

     

    Briefings for staff on Thursday - conducted by Chief Executive Tony Tyler and Chief Operating Officer John Slosar - pulled no punches in giving details of why the Cathay Pacific Group made a big loss last year, and why the situation seems to be going from bad to worse.

     

    The reasons behind the HK$8.6 billion loss - the triple whammy of a soaring fuel bill, fuel hedging losses and a recession-drive in passenger and cargo demand - were clearly outlined, with both Tony and John going into some detail to explain how the hedging losses came about. "The airline business was a bad business to be in last year and the hedging situation just made it worse," said John.

     

    Staff were shocked to discover that, disregarding hedging and other variables, CX and KA actually made a HK$1.34 billion operating loss in 2008 compared to a HK$5.2 billion gain in 2007, and that there was a significant drain on the Group's cash reserves last year.

     

    Tony made it clear that the big worry is what will happen in the months to come. Hedging losses are still being made - HK$1.9 billion in the first two months of 2009 - but the major concern now is the continued impact of the economic downturn on the airline's core business.

     

  7. Posted · Report reply

    Plaza Premium Lounge at the Satellite Terminal offers the following package:

     

    LOUNGE USE

    Package:

     

    Day package (0700 hours to midnight)

    2 hours package: RM 88.00

    5 hours package RM128.00

    6 - 10 hours package: RM148.00

     

     

    Night package (0001 hours to 0659 hours)

    5 hours package: RM108.00

    6 - 10 hours package: RM128.00

     

     

    Even with the package (or MH 100 RM per entry) I am far from being tempted. Why shoud I pay that much of I can pay less and still have a decent meal and wireless far cheaper at Starbucks or Burger King?

     

    Free entry to the Plaza Premium Lounge at the Satellite Terminal if you are a Citibank Platinum Credit Cardmember (Malaysia issued cards). It applies to both Visa and Mastercard.

  8. Posted · Report reply

    I predict the Tune Hotel LCCT will be sold as a residential college to INTI/Lim Kok Wing University Colleges etc when no one is staying there or converted into an apartment block. Or it could be a staff quarters for AK/MH/MASkargo/MAHB/KLIA whoever interested.

     

    The Tune Hotel at LCCT is somewhat far from Inti/Lim Kok Wing University Colleges isn't it ?

  9. Posted · Report reply

    This was the letter addressed to J customers on this aircraft at KL Sentral check-in :

     

    "Dear valued customer,

     

    Your flight today is on a new leased B737-800 aircraft. You will notice some differences in the seat arrangement, seat pitch and recline. It has a 3 seat configuration. For your comfort and convenience, the middle seat will be left empty.

     

    This is a short-term arrangement while we wait for our new B737-800 aircraft which will be delivered to us at the end of next year. We truly regret any inconvenience. If you have any feedback, please email customer@malaysiaairlines.com

     

    Thank you,

     

    ....................

    Duty Manager

    Malaysia Airlines

    KL Sentral Station"

     

    So can I go into 'shiok sendiri' mode in future if I ever hop aboard one of the leased B737-800 aircraft flying on Y but claim that I was flying J just because the seat next to me was empty ??

     

    Lame. It probably can be considered as deceptive.

  14. Posted · Report reply

    Fascinating insight from an obvious pro in the field ! Thanks :good:

     

    Is there any obligation as to when one has to realize those losses/profits ?

    Meaning, is one at liberty to either KIV the issue (hedging loss, delay unwinding in hope losses will be less nearer contact expiration) or book in any profit earlier ?

     

    Far from being a pro BC. Still climbing the steep learning curve.

    Had a quick look at the Malaysian Accounting Standards Board's website and it seems that FRS 139 - Financial Instruments: Recognition and Measurement which is to be applied alongside FRS 132 will only be made effective from 1 January 2010 onwards. So MAS may not have had to comply with FRS 132 as yet.

     

    There was a news article in today's Star newspaper that reported about MAS' potential losses due to hedging costs and if that's really the case, it would potentially reverse all the profits made in the past couple of years:

     

    MAS stands to lose RM3bil in hedging costs

    By YVONNE TAN

     

    PETALING JAYA: Malaysia Airlines (MAS) stands to chalk up close to RM3bil in hedging costs over the next two years while its competitor AirAsia Bhd enjoys the benefits of lower crude oil prices, analysts say.

    An analyst estimated that MAS was currently sitting on a collective paper loss of around RM2.8bil for financial year 2009 and 2010 as a result of its hedging activities.

     

    MAS has hedged 64% of its fuel requirements for financial year (FY) ending Dec 31 at US$100 per barrel and 40% of FY10 at US$95 per barrel while crude oil is hovering around US$40 per barrel. The analyst estimates MAS using up to 16 million barrels of crude oil per year.

     

    “It is paying higher for crude as it has locked positions at US$100 and US$95 a barrel whereas the current price is only around US$40 a barrel,’’ the analyst said. The national carrier does not book any losses as it does not adopt the mark-to-market practice, which essentially means assigning a value to a position held in a financial instrument based on current market price.

     

    Kenanga Research said MAS’ FY09 hedge price was much higher than the figure revealed last year, which was 53% of FY09 crude at US$83 per barrel. “We suspect that the increase in FY09 hedge price could be due to non-linearity and complexity of the hedging instruments involved. As there are more than 80 fuel hedge instruments available in the market, these complicated derivatives when combined might have an adverse effect should spot prices reach a certain threshold,” it said.

     

    While analysts have raised concerns about MAS’ pricing ability which could be handicapped by its fuel hedge, they are equally concerned about AirAsia’s associates’ longer term prospects as these continue to gush red ink.

    However, AirAsia said it is now free of hedging contracts but not without having immense pressure on its profits in the second half of 2008. But going forward, AirAsia is in a better spot as it is paying market prices. AirAsia posted hefty losses of RM425.7mil in its latest quarter from the unwinding of its fuel hedge and interest rate swaps positions, which resulted in its exceptional losses increasing to RM833.4mil for FY08.

     

    The low-cost carrier had been buying fuel at spot price since the fourth quarter of last year and would start “on a clean slate” where hedging was concerned, analysts said.

    Hedges are essentially derivatives which airlines use to lock in a fuel price in advance to protect themselves from price volatility.

     

    The airline industry was plagued by record crude prices, which influenced jet fuel prices in the first half of last year.

    “Airlines entered into their hedging arrangements when it seemed that oil prices would not see their limit and that is why MAS is still paying more than double the current price,” an analyst noted.

     

    The global economic crisis has since brought prices well below the forecasts made by airlines when they bought into their respective hedges.

     

    http://biz.thestar.com.my/news/story.asp?f...mp;sec=business

     

  16. Posted · Report reply

    A reason could be reduction in advanced ticket purchase :(

     

    Sale in Advance of Carriage (Liability) fell from RM 1.56 billion (31/12/2007) to RM 1.22 billion (31/12/2008)

     

    What was the price this fuel was hedged at? A US$30 loss per barrel will total to US$500+ million! =@ =@ =@

     

    :drinks:

     

    Not too sure about that.

  17. Posted · Report reply

    We have recently leased 3 B737-800 aircraft. Customers will notice some differences in the seat arrangement, seat pitch and recline. The aircraft has a 3 seat configuration. For our business class customers’ comfort and convenience, the middle seat will be left empty. We are aware that there have been complaints and we are currently doing service recovery.

     

    This is a short-term arrangement while we wait for our new B737-800 aircraft which will be delivered at the end of next year.

     

    We regret the inconvenience.

     

    Thank you.

     

     

    Regards,

    Dr Amin Khan

    Senior General Manager, Network Revenue Management

    Malaysia Airlines

     

    I hate to be saying this but I do not consider the time-frame of between now and till the end of next year as being short time. It may not necessarily be considered as long term but I think it still shouldn't be considered as short term. Short time would probably be appropriate a term if it's for say 3-6 months.

  18. Posted · Report reply

    Can the accountants in this forum shed some light into how fuel hedging losses/gain is taken up in the books?

     

    I think usually the airlines would have to account for the fuel hedging losses as a cost i.e. an expense item for this case, it'd probably be recognised under Fuel Costs.

     

     

    The International Accounting Standards Board's (IASB) issued Standard 132 re Financial Instruments - Presentation. In accordance to the accounting standard, any hedging contracts would be considered as a financial instrument and therefore any interest, dividends, losses and gains relating to a financial

    instrument or a component that is a financial liability shall be recognised as income or expense in profit or loss.

     

    I think the Malaysian Accounting Standards Board has harmonised IASB 132 with FRS 132. Perhaps any accountants/auditors based in Malaysia can confirm that. So if that's the case, those fuel hedging losses would be booked as an expense and thus be reflected in the Profit and Loss (Income Statement).

     

     

     

     

  19. Posted · Edited by Sing Yew · Report reply

    And here are the Profit and Loss figures for the full year ending 31/12/2008

     

    RM ‘000

    Operating Revenue 15,035,303

    Operating expenses (15,198,257)

    Other Operating Income 466,001

    Gains on sale of properties 2,410

    Profit from operations 305,457

    Finance Cost (60,770)

    Share of results from assoc comps 19,974

    Profit before tax 264,661

    Taxation (19,086)

    Profit after Tax 245,575

     

     

    Operating Profit/Loss by Business Segments

    RM’000

    Airline Operations 295,595

    Cargo Services 22,392

    Catering Services 1,999

    Others 6,652

    Total before Eliminations 326,638

    Eliminations (21,181)

    Post Eliminations 305,457 These should tie up with the Profit from Operations figure

  20. Posted · Report reply

    Other info worth noting:

    Profit for the year ending 31/12/2008 was RM 245.7 mil as compared to 31/12/2007’s RM 852.7 mil.

     

    Cash and cash equivalents declined by RM 0.86 billion to end year (31/12/2008) with RM 3.57 billion.

     

    As at 19/2/2009:

    Entered into various fuel hedging transactions for periods up to 31/12/2011 in lots totalling 17,350,000 barrel.

     

     

    These are the interesting bits:

     

    Operating Revenue 3,764m

    Operating expenses (3,800m)

    Other Operating Income 102m

    Gains on sale of properties 13m

     

    If not because of 'other operating income' + 'gains on sale of properties', if would have been a LOSS.

     

    Yup. Which is something that goes unreported in the news at times. They just see the profits as profits.

  21. Posted · Edited by Sing Yew · Report reply

    The financials: Quarter Ended 31/12/2008

     

    RM ‘000

    Operating Revenue 3,764,132

    Operating expenses (3,800,197)

    Other Operating Income 102,304

    Gains on sale of properties 13

    Profit from operations 66,252

    Finance Cost (20,058)

    Share of results from assoc comps 3,647

    Profit before tax 49,841

    Taxation (3,219)

    Profit after Tax 46,662

     

     

    Operating Profit/Loss by Business Segments

    RM’000

    Airline Operations 93,815

    Cargo Services (14,148)

    Catering Services 610

    Others (350)

    Total before Eliminations 79,927

    Eliminations (13,675)

    Post Eliminations 66,252 - This should tie up with the Profit from Operations figure above

  23. Posted · Edited by Sing Yew · Report reply

    For example, KL - Melbourne is costing RM111 while the Melbourne - KL costs RM243

     

    SO THE TOTAL FARE (incl tax) is only RM354!

    (of course luggage + meal extra) but that's not cheap, I don't know what to say.

     

    It is even cheaper if booked from MEL-KUL return as the total fare is AUD120 which is around RM 293.

     

    The website is very slow now, and the seats are already very limited.

     

    Did you grab any of them to head home Azri ?

  25. Posted · Report reply

    Totally agree with you on them all.

    All my Temptations purchases have yet to be credited with any Enrich miles and when contacting on the phone, apparently it is OUR responsibility to provide the transaction records e.g. receipts and all at your nearest MAS office for them to take copies of it and have them forwarded to the Enrich department. Which is just bizarre.

     

    I emailed Enrich numerous times in regards to this and other feedback and to this date I have yet to receive a single reply from them. Perhaps they are just plainly keen on tempting the passengers to make purchases and not keen on awarding miles after all. So, agreed, memang lembap.

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