MH Continuity under new stewardship

[Ja Singh 2]

Hi saw rhis article and couldnt help sharing with you guys : Some of it :

 

The second phase, or BTP 2, kicked off in January last year, focusing on resilience and turning the airline into a five-star value carrier.ome tweaking to the BTP 2 is necessary to ensure MAS is truly a five-star airline that gives good value. “We do not want to be the number one airline. That is not our game and no one can afford it.

 

However, he is quick to add: “The one thing we do not want to do is (compromise on quality and service). One airline took caviar out of its first class menu and we think that is a mistake. The cost of caviar is far too small. We want to improve our service and not give our first class passengers an excuse not to fly with us,” he elaborates.

 

MAS has cut capacity by 12% and this does not include it’s KL–Stockholm–New York–KL route. It has also grounded three B747 aircrafts while rival SIA is expected to ground 13 and Cathay Pacific six, with five more by year-end. (But what about SIA adding 10 A380's as well and MH none?)

 

By 2010 Azmil believes MAS will have a refreshed product, many more new destinations, a host of new capacity with new aircraft deliveries and additional frequencies.( How do you do that without ordering any planes besides 737's?)

 

Not true, says Azmil. “You cannot compare us with AirAsia. You have to look at the regions we fly into. We are into six continents and we are a full service carrier. Our product is far superior. (Is that true that MH product is far superior to AK or was he thinking of SQ?)

 

An order for 35 new B737-800 aircraft has been made, which it will use for long haul trunk routes.(737's for long haul?)

 

MAS is one of the few airlines that has ordered aircraft during a downturn. In a downturn, managing additional capacity poses a major challenge, which explains the move by most airlines to ground their planes.(Really?MH is the only airline that ordered planes?)

 

“Many within the industry repeat the same mistakes of ordering aircraft during peak and get it in bust times. We did not want to be in that position as it is very difficult to manage capacity in an oversupply situation. We avoided that as we want to grow when the economy goes up,’’ Azmil said. (Its not peak now, so wht no orders?)

 

 

http://biz.thestar.com.my/news/story.asp?file=/2009/9/12/business/4690404&sec=business

[flee 5]

MAS is quite different from AirAsia. When it went bankrupt a few years ago, it got the govt. to pay for something that it already owns - the planes. In other words, it got bailed out.

 

If AirAsia collapses, it will just disappear and the shareholders will have to bear the losses. As such, MAS management always know that the govt. will not allow it to sink. So it can take reckless management decisions and still don't have to pay the consequences.

[Mohd Azizul Ramli 2]

Looks like for the first time ever, there will be a continuity for the direction of our national airlines, as the newly appointed MC/CEO Datuk Tengku Azmil (DTA) decided to pursue what has been started earlier by his predecessor, Datuk Idris Jala (IJ).

 

MAS upbeat on operating profit in 2010

By Presenna Nambiar Published: 2009/10/03

 

Malaysia Airlines (MAS) (3786) expects to make an operating profit next year, as it slashes more non-viable routes and benefits from a recovery in the economy. "The third and fourth quarter of this year will be tough, but next year, we think we will be able to make an operating profit for the full year," MAS chief executive officer and managing director Tengku Datuk Azmil Zahruddin told reporters in Selangor yesterday.

 

MAS incurred an operating loss of RM420 million in the second quarter ended June 30 2009. "The first quarter of 2010 will probably be a challenging one, but we hope the remaining quarters will work out to meet our target of operating profit for 2010," Azmil said.

 

MAS has cut between 12 and 13 per cent of capacity (available seat kilometre) in the first half of the year, with more expected with the suspension of its Kuala Lumpur-Stockholm-New York route. The national carrier suspended the route on October 1 2009.

 

Azmil was speaking at a media briefing held yesterday, following his appointment as the new head of MAS on August 28 2009. At the briefing, he announced that he plans to accelerate the implementation of the Business Transformation Plan, rather than make any changes to it.

 

MAS will focus on three core areas of enhancing customer satisfaction, generating revenue and intensifying structural cost reduction. "This has a two pronged approach - address current operational losses and position the airline for growth," Azmil said. MAS has identified Asean, Australia, North Asia, China, South Asia and the Middle East as its core network plan for 2010.

 

On whether there is still a need for the six A380s on order, with a more regional core network, Azmil said the aircraft would be used for its high density routes. The six A380s to be delivered beginning 2011 will be used for routes such as London, Sydney and Amsterdam.

 

MAS expects MASKargo, its cargo division, to return to profitability next year, while MAS Aerospace Engineering aims to achieve revenue targets of RM1 billion by 2010 and RM3 billion by 2013.

 

Azmil said MAS will continue to pursue structural cost reduction with a target of RM700 million this year. Over the last three years, MAS has saved more than RM2 billion.

 

MAS aims to return to operating profit by 2010

Written by Siti Sakinah Abdul Latif

Friday, 02 October 2009 15:17

 

KUALA LUMPUR: MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) hopes to return to operating profit by 2010 depending on the carriers turnaround plan and global economic conditions, says its CEO, Tengku Datuk Azmil Zahruddin. To achieve the target, MAS will continue its cost reduction programme, which has managed to save RM2 billion in the last three years and targets saving another RM700 million for 2009.

 

“There’s always costs to cut ”Azmil said at a briefing in Kelana Jaya as he updated the media on the progress of MAS' business transformation plan. He indicated that the national carrier would continue to pursue cost reductions. Azmil explains that the 62-year-old carrier inherited a lot but the aggressive cost-cutting measures were to get rid of " 'bad' costs such as those that do not add value or give poor returns".

 

"A significant portion of our savings is returned to customers in the form of lower fares and better services," he says. "We will continue to invest in 'good' costs such as inflight food, safety and regulatory requirements and to generate third-party revenue", he adds. Azmil says that MAS had no intention to cut employee salaries, as the cost cutting measures involve the disposal of assets that are not related the company’s core business. The airline also aims for a 10% reduction in overtime next year, with recruitment taking place only in critical areas.

 

Meanwhile, Azmil says MASkargo aims to return to profitability next year while MAS Aerospace Engineering plans to achieve revenue targets of RM1 billion by 2010 and RM3 billion by 2013. MAS has also set up the MH Customer Value Proposition committee headed by Azmil himself to identify extra costs that are a burden to customers and eliminate them.

 

“The source of the extra cost would keep changing. Customers may want a certain item or service today, but that may change tomorrow. We only want to give the things that customers wants and are willing to pay for,” he said. Asked what the extra costs were, Azmil says the company is still in the process of identifying them.

 

On a separate matter, Azmil says MAS would continue to renew its fleet. It will take delivery of 35 Boeing B737-800 aircraft commencing in 4Q2010. It has options on another 20 planes. "These planes will be deployed in Malaysia, Asean, South Asia and China," he said. As for high-density routes such as London, Sydney and Amsterdam, MAS will be using the Airbus A380 that will be delivered beginning 2011.

 

Azmil says that MAS aims to grow its network mostly in the Middle East, China, Asia and Australia region in 2010. He adds that MAS may add new routes but declined to elaborate.

In summary, these are what we can expect from the new MD/CEO:

• slashes more non-viable routes
  
• accelerate the implementation of the Business Transformation Plan, rather than make any changes to it
  
• focus on enhancing customer satisfaction, generating revenue and intensifying structural cost reduction
  
• identified Asean, Australia, North Asia, China, South Asia and the Middle East as its core network plan for 2010. May add new routes
  
• to get rid of 'bad' costs such as those that do not add value or give poor returns
  
• to invest in 'good' costs such as inflight food, safety and regulatory requirements and to generate third-party revenue
  
• no intention to cut employee salaries, as the cost cutting measures involve the disposal of assets that are not related the company’s core business
  
• aims for a 10% reduction in overtime next year, with recruitment taking place only in critical areas
  
• MASkargo to return to profitability next year while MAS Aerospace Engineering is to achieve revenue targets of RM1 billion by 2010 and RM3 billion by 2013
  
• set up the MH Customer Value Proposition committee to identify extra costs that are a burden to customers and eliminate them
  
• continue to renew its fleet. Will take delivery of 35 Boeing B737-800 and the 6 Airbus A380 aircrafts.
  

Quite interesting. I wonder:

• Which routes to be axed next?
  
• Will new destinations emerge from the identified regions?
  
• Will inflight catering quality improve tremendously since it is regarded as a 'good' cost?
  
• Is generating third party revenue means ancillary income like what AirAsia is doing at - something like BOB to be introduced on MH flights?
  
• Is there any other non core assets left to sell?
  
• What is the 'extra costs that are a burden to customers and eliminate them' as per the definition of the MH Customer Value Proposition committee? Does it includes cost such as telephone charges to call MH's Hotline because the online features are lousy, or the cost travelling to MH's Office because the online features are lousy, or the tension and depression experienced by the customers because the online features are lousy?
  

So many things to find out.

 

 

Current sentiment towards MH:

 

MAS plans further cost cuts

Published: 2009/10/02

 

Malaysian Airline System Bhd, the nation’s largest carrier, said it plans further cost cuts to help narrow an expected loss this year. “We will focus on three core areas - enhancing customer satisfaction, generating revenue and intensifying cost reductions, the airline’s chief executive officer Tengku Azmil Zahruddin said at a press briefing today.

 

Tengku Azmil took the helm in August as the worst global recession in half a century hammers travel demand, threatening to push the airline to its biggest loss in four years. The 39- year-old chief plans to cut costs and trim capacity, part of a five year plan put in place by this predecessor in 2008, to ensure the survival of the airline.

 

Malaysian Air reported a profit of RM876 million (US$252 million) in the second quarter, helped by paper gains from fuel-hedging contracts that masked losses from operations.

 

This year, the carrier may post a loss of RM840 million, according to the median estimate of 11 analysts compiled by Bloomberg. That will be its first loss in three years and the biggest since 2005, according to Bloomberg data.

 

Malaysian Air fell 0.3 per cent to RM2.94 as of 10:31 am in Kuala Lumpur trading. The stock has fallen 3.9 per cent this year. Of the 18 analysts tracked by Bloomberg, 15 are recommending that investors sell the stock, while three have “hold” ratings.

 

Airlines worldwide may lose a total of US$11 billion this year, as demand dwindles amid the worst recession since World War II, according to the International Air Transport Association. Carriers in the Asia Pacific will account for a third of that, the trade group predicted.

 

Maintaining Plane Orders

 

As carriers including Singapore Airlines Ltd and Australia’s Qantas Airways Ltd. push back deliveries of new planes in anticipation of slower travel growth, Malaysian Air still plans to receive aircraft starting in the fourth quarter of next year, Tengku Azmil said.

 

The carrier will progressively take delivery of 35 Boeing Co 737-800 planes, he said.

 

Malaysian Air has ordered six of the double-decker superjumbo Airbus SAS A380s, with deliveries starting in 2011.

 

Tengku Azmil joined Malaysian Air in 2005 from Penerbangan Malaysia Bhd., which leases aircraft to Malaysian Air. He has also worked at PricewaterhouseCoopers LLP in London and Hong Kong. -- Bloomberg

 

AND NO MENTION WHATSOEVER ABOUT BEING 5 STAR THIS AND THAT!!! WILL THE WHOLE 5 STAR NONSENSE FINALLY COMES TO AN END?

[Ja Singh 2]

Looks like for the first time ever, there will be a continuity for the direction of our national airlines, as the newly appointed MC/CEO Datuk Tengku Azmil (DTA) decided to pursue what has been started earlier by his predecessor, Datuk Idris Jala (IJ).

 

 

 

 

In summary, these are what we can expect from the new MD/CEO:

• slashes more non-viable routes
  
• accelerate the implementation of the Business Transformation Plan, rather than make any changes to it
  
• focus on enhancing customer satisfaction, generating revenue and intensifying structural cost reduction
  
• identified Asean, Australia, North Asia, China, South Asia and the Middle East as its core network plan for 2010. May add new routes
  
• to get rid of 'bad' costs such as those that do not add value or give poor returns
  
• to invest in 'good' costs such as inflight food, safety and regulatory requirements and to generate third-party revenue
  
• no intention to cut employee salaries, as the cost cutting measures involve the disposal of assets that are not related the company’s core business
  
• aims for a 10% reduction in overtime next year, with recruitment taking place only in critical areas
  
• MASkargo to return to profitability next year while MAS Aerospace Engineering is to achieve revenue targets of RM1 billion by 2010 and RM3 billion by 2013
  
• set up the MH Customer Value Proposition committee to identify extra costs that are a burden to customers and eliminate them
  
• continue to renew its fleet. Will take delivery of 35 Boeing B737-800 and the 6 Airbus A380 aircrafts.
  

Quite interesting. I wonder:

• Which routes to be axed next?
  
• Will new destinations emerge from the identified regions?
  
• Will inflight catering quality improve tremendously since it is regarded as a 'good' cost?
  
• Is generating third party revenue means ancillary income like what AirAsia is doing at - something like BOB to be introduced on MH flights?
  
• Is there any other non core assets left to sell?
  
• What is the 'extra costs that are a burden to customers and eliminate them' as per the definition of the MH Customer Value Proposition committee? Does it includes cost such as telephone charges to call MH's Hotline because the online features are lousy, or the cost travelling to MH's Office because the online features are lousy, or the tension and depression experienced by the customers because the online features are lousy?
  

So many things to find out.

 

 

Current sentiment towards MH:

 

 

 

AND NO MENTION WHATSOEVER ABOUT BEING 5 STAR THIS AND THAT!!! WILL THE WHOLE 5 STAR NONSENSE FINALLY COMES TO AN END?

 

As carriers including Singapore Airlines Ltd and Australia’s Qantas Airways Ltd. push back deliveries of new planes in anticipation of slower travel growth, Malaysian Air still plans to receive aircraft starting in the fourth quarter of next year, Tengku Azmil said.

 

 

That is one big fat lie.

In the last 3 years Mh has added nil new planes and SQ 9 A380's and many A330's as well QF to.!

Edited October 3, 2009 by jadivindra

[Pieter C. 5]

As carriers including Singapore Airlines Ltd and Australia’s Qantas Airways Ltd. push back deliveries of new planes in anticipation of slower travel growth, Malaysian Air still plans to receive aircraft starting in the fourth quarter of next year, Tengku Azmil said.

 

 

That is one big fat lie.

In the last 3 years Mh has added nil new planes and SQ 9 A380's and many A330's as well QF to.!

 

Think, he's talking about A380's only; both SQ and QF have pushed-back deliveries of that plane, while MH still sticks to 4th Quarter of 2010...

[KK Lee 5]

Believe IJ’s BTP will eventually degenerate MH to a 2nd tier regional airline with a few intercontinental destinations. To compete with SQ, EK, EY, CX, QF, BA, LH, KL, AF, AK, D7, TG, etc MH need to reconsider long term strategy and decide where it wants to be positioned relative to SQ and AK in 3 to 5 years time.

 

Until DTA walks the talks, we can only wait and see.

 

[Mohd Azizul Ramli 2]

Think, he's talking about A380's only; both SQ and QF have pushed-back deliveries of that plane, while MH still sticks to 4th Quarter of 2010.

But MH will receive the A380s beginning 1Q 2011, not 4Q 2010.

 

Believe IJ’s BTP will eventually degenerate MH to a 2nd tier regional airline with a few intercontinental destinations. To compete with SQ, EK, EY, CX, QF, BA, LH, KL, AF, AK, D7, TG, etc MH need to reconsider long term strategy and decide where it wants to be positioned relative to SQ and AK in 3 to 5 years time.

Being a second tiered regional airline is only acceptable if MH is part of an alliance. But it is not the case. I don't think MH can achieve anything in terms of growth, if it only depends on code share partners. MH is not EK that can brave in the storm on its own, although MH is assured a bail-out whenever it failed by the government.

[Mohd Azizul Ramli 2]

A recent interview with MH's MD/CEO.

 

MAS' new CEO steers steady course

Published: 2009/10/19

 

Business Times speaks to Datuk Tengku Azmil Zahruddin about his plans to manoeuvre MAS out of the 'toughest year for the airline industry'

 

DATUK Tengku Azmil Zahruddin took over the helm at Malaysia Airlines (MAS) on August 28, as the national carrier entered the second year of a five-year Business Transformation Plan (BTP) facing huge challenges and recording operating losses.

 

KANG SIEW LI, JEEVA ARULAMPALAM and PRESENNA NAMBIAR sat down with the newly-appointed managing director and chief executive officer (CEO) to hear about his plans to manoeuvre MAS out of the "toughest year for the airline industry".

 

Below are excerpts from the interview:

 

 

Question: Are there any routes operated by MAS that are subsidised by the government?

Answer: No. The only routes subsidised by the government are the ones under MASwings. These are the old FAX (Fly Asian Xpress, previously operated by AirAsia) routes. These are not commercial routes and are done more as a social service. For many towns in Sabah and Sarawak, air travel is a very fundamental part of travel because the infrastructure is not there. Those are the only routes subsidised by the government.

 

Q: Is it possible to make MASwings' routes profitable?

A: Very tough. I don't believe that it is right, in many of the cases, to make them profitable because it is really a lifeline for many of the people there. What is a 45-minute flight becomes a two-week trek through the jungle if the flight is not there. To make money and hike up the fares is not what the government is looking for, and these routes are quite regulated (in terms of fares) by the government. We can try and make them profitable, but I don't think we can achieve the social objective that is intended.

 

Q: As a national carrier, you have received criticism for cutting certain routes and not operating as many routes as what some quarters want. Can you comment on this?

A: It really depends on what you want. Hypothetically, the government can tell us tomorrow that we don't need to make money but just fly everywhere. (If that happens, you have to) expect us to come every year to the taxpayers for more handouts and the government has to be prepared to subsidise MAS for a long time. But you cannot instruct a listed company to lose money. As such, we have to anchor our operations based on profit and loss (P&L). If you are not anchored on P&L, you will not work so hard to take costs out and I can guarantee that you will then end up with an airline that is very bloated, slow, unresponsive and self-serving. I'm not sure if people want that airline.

 

Q: MAS plans to be number one in terms of market share. However, there has been a transfer of passenger volumes from MAS to AirAsia, especially since the economic downturn. How will you achieve your market share target?

A: We believe that people are willing to pay a premium, but there is a limit to how much more they will pay. So we need to make sure that we are taking out the bad costs to close the cost gap so that the fare premium we charge does not have to be much higher than AirAsia's fares. Our fares will be higher because we have different products, but we believe that people will pay more to fly with a full-service carrier like MAS. We don't have to match AirAsia's prices to get market share.

 

Q: What is MAS' current market share?

A: It's about 50:50 now. Some routes, we carry more passengers; and others, they (AirAsia) carry more.

 

Q: How do you plan to make an operating profit next year?

A: By doing all the things we are doing (under BTP 2). Aside from cutting costs, we are preparing ourselves for growth when the economy recovers and to be in a position to take advantage of it. Also, we have kept up on our advertising activities so that our presence in the market is still there. The first thing some people do is to cut advertising. As a result, they lose their presence in the market.

[Mohd Azizul Ramli 2]

Another interview with MH's MD/CEO about his strategy for the airline in 2010.

 

MAS under new MD Azmil looks forward to a better year

Saturday January 2, 2010

By TEE LIN SAY

http://biz.thestar.com.my/news/story.asp?sec=business&file=%2F2010%2F1%2F2%2Fbusiness%2F5386082

 

THE end of 2009 has been a busy period for Malaysia Airlines (MAS) as it proposed a rights issue, acquired aircraft and changed its strategy from operating purely on aircraft leases to relying on a mix of leases and acquisitions.

 

The airline entered into a memorandum of understanding (MoU) with Airbus for the purchase of 15 Airbus A330-300 wide-body aircraft with an option for 10 more. The 25 aircraft will cost a total of US$5bil (RM17bil) at list prices.

 

MAS also announced the acquisition of six undelivered Airbus A380s, and the bundling of four Boeing aircraft (two B777s and two B747s) from Penerbangan Malaysia Bhd (PMB) for RM3.19bil, which will be settled by RM1.73bil in cash and the assumption of RM1.46bil liabilities.

 

The carrier’s existing fleet comprises 81 leased aircraft. Through its refleeting exercise, MAS can potentially own an additional 66 aircraft by 2016.

 

Meanwhile, the proposed 1-for-1 rights issue, at RM1.60 per share, will raise between RM2.7bil and RM3bil cash. Khazanah Nasional Bhd and subsidiary PMB, which collectively own 69.3% stake of MAS, have undertaken to subscribe in full their entitlement.

 

The principal rationale for the cash call is to raise funds to support the fleet renewal programme. The proceeds from are needed as MAS will start taking delivery of its aircraft beginning this year. Next year 11 aircraft will be added to the fleet.

 

Hence, MAS’ gearing will jump to 2.1 times (x) in 2011 from 1.3x in 2010, before dropping to 1x come 2016, when all of the aircraft have been delivered.

 

In an exclusive interview with StarBizWeek, MAS managing director and chief executive officer Tengku Datuk Azmil Zahruddin talks about the airline’s strategies and prospects moving forward. Excerpts:

 

SBW: Why did you choose Airbus and not Boeing?

 

Azmil: We’ve chosen to buy up to 25 A330s. This particular decision is a bit different from how we normally approach decisions. For example, when we were looking at the 737-800 replacements, we issued requests for proposals to both Boeing and Airbus. And there was a full and normal competition between them. In the end, we decided on Boeing, with its 737-800 aircraft. In this case, we are buying the new A330s, which Airbus calls the “enhanced A330s”. We already operate A330s in our fleet. So that is an aircraft we are familiar with. And in the long term, we are either looking at the B787s or the A350s, although we haven’t really looked at the timing.

 

So the A330 made a lot of sense for us because we were already familiar with the aircraft. For example, if we were to switch to the Boeing equivalent today, it would be the B767. The adjustment period for us to go from the A330 to the B767, and later on to another aircraft type, would have been difficult. In this case, our pilots are already trained on the A330 aircraft, we already have spares for the A330s, and our maintenance people are used to the A330. It makes sense for us to continue using the A330.

 

Is this A330 more fuel-efficient, hence ensuring better yields for MAS in the future?

 

Yes, the new A330 does a lot of things for us. On the cost side, it is more fuel-efficient that the current A330s that we have. Maintenance cost is lower due to its enhanced features. Another benefit is that it has longer range than our current A330. So we’re able to use it for more missions than we’re able to do with the current A330. We can optimise the cost for the A330, as it is designed for medium haul. We can use it on more routes than the current A330, which will also help us to reduce cost. On the revenue side, it will really help us to upgrade the product. It enables us to refresh the product, to give something that is more modern and cutting edge. And to our customers a better experience. So, yes, I think we will be able to sell more tickets, and customers will also be willing to pay more for the tickets.

 

So MAS is now no longer leasing 100% of its planes. It is going to be leasing some, and acquiring some. Can you tell us about the aircraft mix?

 

After we did the Widespread Asset Unbundling exercise in 2002, we basically moved to a 100% leasing strategy. And that was the right thing at that time. However, we have been saying over the last few years that although operating leases give us a lot of flexibility – which is good – you don’t really need complete flexibility for the fleet unless you plan to exit the airline business.

 

Of course, when you lease planes, you have to pay lessors a premium for that flexibility. We felt it was necessary to have flexibility for the entire fleet and pay a premium for the entire fleet. Even in the worst of times, there will always be a core part of your fleet that you will continue to fly. So for that core part of the fleet, it doesn’t make sense to pay a premium for flexibility that we don’t need.

 

So we’ve said that we’re going to own a third of our fleet, have operating leases for another one third, and the the final one third, we will decide whether we acquire or lease, depending on the situation at that time.

 

MAS is also bundling two B747s and two B777s. Can you tell us how much you expect to save from this exercise?

 

The B747s and B777s are freighters that are operating in our fleet today. The two B777 that we are bundling, are the two newest B777s that we have on our fleet. And the two B747s are also two key freighters that MasKargo is currently using. So these are aircraft that we believe will remain in our fleet for some time, and therefore are part of the core fleet. So like I said earlier, it doesn’t make sense for us to pay a premium for part of the core fleet that will be with us for a long time. That was why we decided to bundle it. It reduces our cost, and on an NPV (net present value) basis, the savings is about RM330mil.

 

And this RM330mil is throughout the 12-year leasing period?

 

Yes.

 

How do you see the prospects for MAS in 2010, along with the rest of the airline industry?

 

2009 has been a tough year, and I don’t think anybody will be sad to leave 2009. I think 2010 will be better, although I don’t think when we flip the switch to 2010, things will immediately get better. There will still be some uncertainty, particularly in the first half. Whether 2010 is better than 2008 and 2007 is still debatable.

 

Will the heavy price discounting seen in 2009 continue into 2010?

 

I hope not. What we’ve seen in the last few months is that seat factors have been very high. Not just for us, but for the industry as a whole. And I think that will reduce the needs for airlines to discount in order to fill up the seats. What we saw in the first half of 2009 was that seat factors were very low. Airlines had to discount, in order to attract customers. If anything, we’ve been too successful, and the complaint we get is that customers can’t get seats! So I really believe that there is less of a need to discount, and yields will improve next year.

 

Under MAS’ Business Turnaround Plan (BTP), you have targeted to achieve net profits of RM1.5bil by 2012. Is that still achievable considering financial year 2009 will be seeing losses?

 

We don’t change our targets halfway. We still aim to achieve RM1.5bil to RM3bil by 2012. And all the things we’re now doing, for example with the fleet, are all part of the overall plan to achieve those targets. Of course, it’s difficult to get those numbers in this economic environment. But this not a one-to-two-year plan. It is a plan up to 2012. So 2009 has been difficult, where we had operating losses for the first three quarters. The fourth quarter will only be announced in February. So we think 2010 will be better, and we will see a return of the long-haul flights.

 

It has been some three months since you took over from Datuk Seri Idris Jala. How has it been like?

 

I’ve worked very closely with Idris when we joined MAS in 2005. It was always our plan that he would stay a bit longer, but I truly understand that the call to serve the country was too strong for him. When he left, I did wish him all the luck.

 

Now as opposed to only MAS customers benefiting, the whole country can benefit from his work. I still keep in touch with him. I last saw him during the launch of the Government Transformation Programme (GTP). We had a chat about the GTP, and he’s taken a lot of the methodology he’d used in MAS for this programme.

 

So are your working styles different? Do you find it hard to fill Idris’ shoes?

 

You know, everyone is different. Each person has a particular way of doing things. My style isn’t exactly the same as Idris’. However, our ideas are quite similar. We were both heavily involved in BTP1 and BTP2. So in terms of what we are supposed to do and why, we both have the same view on that. That is one reason why when I look at the things that MAS is supposed to do, there hasn’t been many radical changes. So with or without Idris, that will continue.