MAS The Flying Buffet - Part 2

[Jamie H 0]

Source : http://www.mggpillai.com/sections.php3?op=...cle&artid=13004

 

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02 December 2005

 

The following was not reported in any of the newspapers about MAS and Datuk Munir Majid - the Chairman of MAS' difficulty in meeting the Press and the Unions on 30 Nov 2005..

 

The news carried by Sang Kancil about MAS THE FLYING BUFFET (29 NOV 05) has been widely read by the Press as well as employees at MAS. On 30th Nov MAS Chairman Datuk Munir Majid organized three sessions to meet the Unions, the staff and the Press.

 

Datuk Munir came late for the meeting with the Unions. Almost all the staff at MAS had read the Sang Kancil report about 'MAS the Flying Buffet' and came prepared to ask questions. At the meeting with the Unions, the members asked Datuk Munir about the lavish expenses incurred by Datuk Munir and MAS. Datuk Munir dismissed their question as 'Rubbish'. He also became visibly upset and cut short the meeting with the Union and went to the next meeting with the staff.

 

But at the Staff meeting Datuk Munir was visibly upset and could not handle himself anymore. So much for the mettle of the Chairman of a RM12.0 Billion revenue airline. Since Datuk Munir had lost his cool, Tg Azmir the Executive Director of MAS had to brief the staff. Of course the staff did not ask any questions at all.

 

Then Datuk Munir went to meet the Press. The first question asked was about the numerous consultants in MAS. What if the consultants do not perform ? Datuk Munir started fidgeting and fudging the issue. He said something - if the consultants do not perform, MAS would do something. One reporter kept insisting and asked if the consultants do not perform, would MAS ask for a discount or refund of money from the consultants ?

 

Datuk Munir avoided the question completely.

 

Then one reporter asked about the RM1.0 million paintings that Datuk Munir had bought for his office. Datuk Munir said those paintings were ordered during the time of Datuk Ahmad Fuad Dahlan, the previous Managing Director of MAS who resigned because he could not get along with Datuk Munir. Datuk Munir said, 'Let the previous management be held accountable'. Here Datuk Munir was clearly passing the blame and accusing Datuk Fuad Dahlan of being lavish and spendthrift with MAS' and taxpayers' money. (I hope someone tells Datuk Fuad Dahlan about this. According to dtuk Munir, Datuk Fuad must be held accountable for buying the expensive RM1.557 million paintings).

 

But despite saying so, Datuk Munir did not explain the instruction on the Invoice, in his own handwriting, addressed to Low Chee Teng (MAS Chief Financial Officer) whereby he instructs Low to pay for the three paintings.

 

Then in the same handwriting Datuk Munir also instructs Low to hang one of the Botero paintings in the MAS Golden Lounge for 1st Class passengers but hang the other two paintings in his (Munir's) office on the 34th floor. Certainly if this was an extravagant expenditure incurred by Datuk Fuad Dahlan who has to be held accountable, then why instruct payment for the paintings or ask for the paintings to be hung in your office. Clearly Datuk Munir is pulling a fast one here.

 

Well MAS did release some financial figures to the Press. Of course being the Malaysian Press, none of them could analyse the numbers very quickly or press the difficult issues.

 

As late as 29 Nov, Datuk Munir had faxed to the Bursa Malaysia pleading to postpone the announcement of their 2nd qtr losses by just one day ie to Dec 1st. That would have meant that the new Managing Director Idris Jala would have had to handle the Press and Datuk Munir would have escaped. Bursa Malaysia refused the request and so Munir had to face the Press on the 30th Nov.

 

MAS had earlier hoped to report about RM260.0 million in losses for the 2nd qtr. thru deft cooking of the books to show that Datuk Munir was at least doing something. But Ernst & Young the external auditors had refused some of the more creative things MAS was suggesting. They refused to accept certain write backs or recognize some overprovisions and as a result MAS showed even higher losses of RM367 million. Even I was surprised !

 

While passenger load has increased 12%, total expenditure has increased 30%. This is what is killing MAS. And staff cost has increased from RM321 million in 2nd qtr 2004 to RM427 million in 2nd qtr 05. That is an increment of RM106.0 million or 33%. The pilots 25% pay increase accounts for about RM37 million of this staff cost increase but over 6 months. Where is the remaining RM70 million increase in staff cost coming from ? Anyone care to guess ?

 

The payment to over 20 consultants (which is captured under staff costs) amounts to over RM60.0 million. Chris Andrews the British consultant who is now Senior General Manager of Strategy was paid RM450,000 for July - September 2005 or RM150,000 per month. This is big bucks. The RM450,000 was paid directly to Chris Andrews personal name. Other orang putih consultants who are ripping off MAS are David Burton, SV (Sourcing Value) and others. This is a flying buffet. Everyone gets to eat.

 

MAS cash position has reduced from RM2.05 billion in 2nd qtr 2004 to RM1.42 billion in 2nd qtr 2005. After the Press meeting, Low Chee Teng said that MAS' cash will last only another 7 months ie until June 2006.

 

MAS has gone on an almost insane recruiting binge of senior execs over the last two years. There are now over 55 AGMs, GMs and SGMs in the company. An AGM is paid RM13k per month minimum, a GM RM16k min, an SGM RM20k and above per month. The top earner is an ex Citibank woman from Singapore who is paid RM60,000 a month.

 

Few of these top management staffs know anything about the airline business. People say that meetings with GMs end very quickly or become blank because the GMs do not know what to say. One meeting became embarrassing for to the people around the table when their new GM just could not lead the meeting.

 

The people who keep MAS flying are the multi talented middle managers who have spent 10 years, 15 years or 20 years with the company learning the whole works of the airline business. Unfortunately for MAS these people are not recognized and promoted.

 

For example a very talented ex MAS route planner (Network Planner) was ignored for promotion, left the company, joined Air Asia and is now stealing business away from MAS by executing brilliant flight scheduling at Air Asia.

 

British Airlines or BA has announced that they are laying off many senior execs to cut costs of up to 50 million pounds sterling (RM350 million). BA is suffering losses. Among the people leaving BA is Peter Read - after 32 years at BA. But surprise surprise..MAS has announced that they have hired Peter Read from BA to join the company. Another expensive addition with unproven contribution.

 

BA suffered its worst losses in 2002. In 2003 BA was grounded for a week by Union troubles. On Nov 20 2005, BA announced possible losses of RM 300 million after another wildcat strike by its unions. And now MAS has recruited an exec from this type of airline to run MAS. Why not hire someone from Air Asia ? It would be cheaper and maybe more successful.

 

Inside people say that Tan Sri Tajudin Ramly's ripping off the airline and his mismanagement of MAS was nothing compared to what is happening now under Datuk Munir Majid as Chairman. The problems at MAS started after a change in shareholding circa 2002-3 when Syarikat Penerbangan Malaysia (the parent company) came under the Khazanah Nasional stable.

 

The problems at MAS can be traced to Binafikir and Khazanah Nasional people who don't seem to know anything about anything. Azman Mokhtar from Binafikir was appointed consultant to MAS to undertake the financial engineering - an idea they copied from another consultant. Binafikir - Azman Mokhtar's company - was paid RM100,000 a month by MAS to undertake the exercise. The ripping off started early. Later Azman Mokhtar of Binafikir became the MD of Khazanah Nasional which is now the parent of MAS. Talk about a conflict of interest.

 

This may provide part of the reasons why there are now so many 'con sultans' working for MAS, getting paid a total of RM70.0 million for their 'con sultan' services.

 

Jewel thieves steal jewels. Car thieves steal cars. 'Con sultans' steal thru 'con sultans'.

 

The Press should investigate and see if any of MAS expensive 'con sultans' have 'back to back' bumi partner JV contracts with Azman Mokhtar's 'con sultan' - cies.

 

As we read this MAS is still bungling. As we read this there is a 'Euro Lab' project going on inside MAS. We have all heard of 'Sky Lab' that eventually fell out of the sky. But just what in Dickens is Euro Lab ?

 

Euro Lab is a ridiculous brainstorming project thought up by Datuk Munir and gang whereby about 20 MAS station managers (mostly orang putihs) from its offices in US, Austria, Australia, Europe etc have been locked up for one month (since Nov 1st 2005) at a very posh hotel in London to brainstorm and figure out how to save the company. Orang putih station managers from US ? And we all thought Idris Jala was being hired to do just that ?

 

So for one month from Nov 1st 2005, MAS has been paying exhorbitant hotel, food and entertainment bills as well as travel allowances to keep about 20 people locked up in a London hotel to brainstorm about its future. Some of these 'lucky' all expenses paid brainstormers have even become claustrophobic after being locked up in too much luxury for one month. They are becoming homesick. So MAS has started rotating the brainstormers - 5 at a time. 5 new brains were flown out recently to relieve 5 tired out brains at the London hotel.

 

What is totally stupidly perplexing is that MAS is the owner of a RM200.0 million hotel in Langkawi called the Four Seasons Hotel. This super luxurious 6 star hotel has two Jacuzzis per room or chalet and rents at USD1000 per night (RM4000 per night). Not surprisingly the hotel suffers minimal occupancy and is a big contributor to MAS red ink. Why not have the Euro Lab project at their three quarters empty hotel in Langkawi ? Why waste more money paying hotel, food, entertainment and travel bills for one whole month of brainstorming in London ? This is unheard of anywhere. Malaysia Boleh. MAS also has extensive training facilities and convention rooms at its Kelana Jaya training center. All this is being wasted.

 

MAS people are not surprised. When Datuk Munir became Chairman, he visited almost every single MAS office, station and ticketing outpost all around the world. MAS inhouse newsletter would proclaim 'Chairman Visits Vienna Office, Chairman Visits Tokyo'. Did Chairman visit Chittagong or Chennai ?

 

There is a simple way for MAS to cut its losses and even turn around a profit. Till next time.

Edited December 6, 2005 by Jamie H

[Sandeep G 1]

A very very interesting read... it would now appear that MM is completely screwing the company left right and centre...

[Ruiz Razy 1]

If it is true, he should leave or not, be sued!

 

 

My "condolences" and wishing all the best for all MH staff.

 

As a frequent traveller and a Malaysian, I'm sad and I hope it will one day it will fly high again.

 

I'm always a strong supporter of MH. But if such things do happen and goes on, than there is no point for me to choose MH.

[kandiah k 0]

The guy from BA is officially out of MH now.

 

[Sing Yew 1]

The guy from BA is officially out of MH now.

 

26603[/snapback]

 

Since when ?

 

[S V Choong 4]

Since when ?

 

Since when have they woke up and realised that he has earned enough money from MH?

[kandiah k 0]

Since when ?

26609[/snapback]

 

 

since a couple of weeks ago Sing Yew, but it was not over hyped but it is weird coz I watched it over the news on RTM1 some weeks ago.