MAS-sive move

[Syed A Ridhwan 0]

KUALA LUMPUR: About 600 Malaysia Airlines staff based at its 34-storey headquarters in the Golden Triangle will relocate to offices in Subang and KL International Airport as part of MAS's turnaround plan. 

 

Taking the lead will be MAS chairman Datuk Dr Munir Majid and managing director Idris Jala; this month, they will move to the airline’s former headquarters in Subang, near Terminal Three of the old international airport.

 

Moving with the chairman and managing director are the executive director, company secretary, and the finance and corporate communications officers.

 

Phase one of the big shift will be from January to March. 

 

The second phase will be in June when the sales, distribution and marketing divisions will also move into Administration Block Three.

 

Idris had earlier told senators that the airline was considering selling the headquarters building located in Jalan Sultan Ismail as part of plans to raise RM3bil to keep the national carrier afloat.

 

However, it is learnt that the board has not made a final decision on the sale and the move out was to enable the airline to cut costs.

 

Besides staff consolidation, emptying the 20-odd floors of the building will enable the airline to rent out the premises if the final decision is not to sell. 

 

In a memorandum on Thursday to MAS staff, Idris said the company was operating in four different locations in the Klang Valley and the big move was to consolidate operations.

 

“We have made every effort to consolidate the business units as much as possible: using existing furniture and partitions, minimising renovations, introducing common discussion areas, and sharing meeting rooms, storage and other office facilities,” Idris added.

 

“This move may cause inconvenience to some staff temporarily, but I am sure you would agree that this is an important part of our business turnaround plan to streamline operations and reduce cost.”

 

He added that the decision to consolidate operations was based on the need to further streamline the operating units’ offices so that personnel were less dispersed.

 

It is aimed at achieving greater efficiencies in terms of reduced travelling between offices to attend meetings, and reduce building maintenance and other support costs.

 

In this consolidation exercise, all MAS head office staff will be relocated to Subang, except Ticketing Office, Federal Territory Sales, Golden Holidays and Enrich service counters.

 

The Star

[H Azmal 0]

How much tops can they get if they were to sell the JSI HQ building?

[Raj 0]

A few Million??

[Hisham Albakri 0]

In this consolidation exercise, all MAS head office staff will be relocated to Subang, except Ticketing Office, Federal Territory Sales, Golden Holidays and Enrich service counters.

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I also read this news in The Star (not the online version - newspaper version lah!) this morning ... does this mean that the GB shop will no longer be in KL?!? I'm not going to Subang or KLIA to buy my models ... then again, I can 'kill 2 birds with 1 stone' by going spotting as well ... hmm

 

I personally doubt they could find serious buyers for their building ... for rental, maybe ... supply for office space have actually exceeded demand nowadays!

 

[Pieter C. 5]

How much tops can they get if they were to sell the JSI HQ building?

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Is this the beginning-of-the-end ???

This exactly happened to PanAm also, selling property first

[Sing Yew 1]

Is this the beginning-of-the-end ???

This exactly happened to PanAm also, selling property first 

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Selling off properties isn't a sustainable solution though.

 

[Seth K 3]

Selling off properties isn't a sustainable solution though.

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First of all, who the heck sell headquater for money(that is desperate), I know that Malaysia has some sort of pride to buy 6 A388, but from my point of view, they just got to cancel all of them, B747 will do the route. In fact, I don't really think MAS can fillup the A380 all time. As the 380 is built TO BE ECONOMY WHEN IT IS FULL HOUSE. Like I said before, it is better to fill up small airplane than flying a half empty plane, think about it...............................................

 

I dont wanna se MH the next Pan Am

Sad that MAS famous logo will be removed from the top of that 39 storey

[Rozhan 0]

The lady at GB did mention about the impending move some time ago. From the newspaper report, the sales and marketing dept will move in June, so we have about 5 months to shop at MAS HQ before having to go the SBZ for future purchases.

 

Too bad MAS finally has to resort to this.

[Izanee 0]

you can sell planes, buildings, hangars; lay off staff; compromise on inflight services etc etc. BUT if they DON'T STOP the bloody bleeder at the top... its all going to be the same later on. GET their thumbs out... stop the rot, corruption and nepotism...

whatever they are doing now will only give them temporary reprieve.

 

MAS only made profits the past two years because:

1. the government assumed all debts

2. THEY SOLD AIRCRAFT..

 

my two sens' worth

 

 

[H Azmal 0]

I guess we can say that the MAS acronym can once again begin to mean

Mana Ada Sistem ?

 

[Sandeep G 1]

The move is good in many ways..

after looking at it from every angle in the past few days, and seeing the announcement in yesterday's paper.. I think ultimately, the goal to streamline operations is good and if MAS can lease out its building, why not.. but as Izanee has said, the corruption must be stopped!!!!

 

Let's just wait and see what happens in the coming months... what happens will happen

[T Azahan 1]

in the current wild and unforgiven airline business environment, many successful airlines are moving towards owning less assets. selling assets and lease/rent it back is the way to go because airlines can pass on depreciation charges (on assets) to the new vendor/owner. depreciation dampens profit because it is an expense. so when business goes bad, u can chuck the aircraft back to lessor (with affordable penalties). it is good to start selling assets so that u dont own anything. u can just have a mas logo on top of that building with a token fees to the new owner for good impression. u just operate the assets. look at tony or michael o'leary or even sir richard and this is how they do it.

 

who cares if u dont own assets. bottom line is profit profit profit to the company, its investors and shareholders.

[Sing Yew 1]

you can sell planes, buildings, hangars; lay off staff; compromise on inflight services etc etc. BUT if they DON'T STOP the bloody bleeder at the top... its all going to be the same later on. GET their thumbs out... stop the rot, corruption and nepotism...

whatever they are doing now will only give them temporary reprieve.

 

MAS only made profits the past two years because:

1. the government assumed all debts

2. THEY SOLD AIRCRAFT..

 

my two sens' worth

23908[/snapback]

 

Agreed

 

[Sing Yew 1]

in the current wild and unforgiven airline business environment, many successful airlines are moving towards owning less assets. selling assets and lease/rent it back is the way to go because airlines can pass on depreciation charges (on assets) to the new vendor/owner.  depreciation dampens profit because it is an expense. so when business goes bad, u can chuck the aircraft back to lessor (with affordable penalties).  it is good to start selling assets  so that u dont own anything. u can just have a mas logo on top of that building with a token fees to the new owner for good impression. u just operate the assets. look at tony or michael o'leary or even sir richard and this is how they do it.

 

who cares if u dont own assets. bottom line is profit profit profit to the company, its investors and shareholders.

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Agreed. Though some airlines have been purchasing their own aircrafts instead of leasing them and doing quite well too e.g. SQ and QF.

 

[Rozhan 0]

If Idris manages to turnaround MAS in the months to come, good for him, for MAS, and the people of Malaysia. But he only has a 2-year contract ,if I heard correctly through the TV3 news when he first check-in at MAS HQ.

 

In a statement by the Backbencher's Club cheif after meeting top management of MAS recently, it was also said that Idris will quit if the turnaroun plans don't work.

 

In any case Idris will not be at MAS forever. From now, the major shareholder i.e. the gov, must groom people with integrity and accountability, and perceived by the rakyat to be a person/s of integrity and accountability, to manage MAS in the future.

 

Not people who has passed their prime.... but continue in service because of titles and connections.

[Bing Chu 0]

The last few replies have been excellent !

 

Whether or not a company (not restricted to airlines) decide to accumulate or dispose of assets (properties, aircraft, works of art .... ) SHOULD be determined by current financial footing of the company, NOT by pride nor perceived prestige.

 

Why the big fuss now when Mr Jala decides it's in MH's best interest to dispose of their HQ building ? IIRC, there wasn't much of a squeak from anyone a few years back when MH disposed of it's entire fleet of aircraft. Pardon my ignorance, but isn't aircraft the principal tool with which any airline is supposed to generate revenue, and hence profit to the shareholders ?! What does a building and few expensive (overpriced ?) paintings contribute to a company's prestige when the management has to continually defend their very existence and their continued employment within the company against the flood of red ink emerging from each set of accounts ?

 

Enough ranting for now I suppose ?

[T Azahan 1]

in business, never be emotional towards the assets that we own. if we need to sell it for the good cause and to ease burden, we have to do it. yes we can own certain assets. we still can own a number of aircraft so that to some extent a company does have assets. but the significant amount of equipment should be leased from third party. so that we are not bogged down with too many assets when times are bad. that was WAU (widespread asset unbundling) all about. senior mgmt and its advisers realised the company was broke, very short of cash but had few billions in terms of unencumbered assets. so MH thru its good advisers at that time unlocked the value by unbundling them and sell them to government to get cash to pay debts and for operational purposes. and with such a move, the company had been so called 'freed' of large depreciation and other expenses (interest payments on loan) on the assets (aircraft) and those expenses were passed on to PMB (the govt). and since these burden was taken away, mas could concentrate on its operation. that was why mas made money few quarters after WAU as large chunk of expenses i mentioned was no longer in its books. but MAS i think had failed to take advantage of this exercise. it could have concentrated on improving its operation efficiency and productivity because these were where real profits could be generated in the future.

 

and we could not allow MH to fail. because imagine if it failed. the multiplier effect of the whole business/economy in malaysia would be greatly affected. people on business could not fly, cargo could not be carried and these would negatively effect many many industries. the total loss would be way greater than the loss of MH. however the notion that 'mh will never fail' is also detrimental to the moral/efficiency of the staffs.

[Sing Yew 1]

in business, never be emotional towards the assets that we own. if we need to sell it for the good cause and to ease burden, we have to do it. yes we can own certain assets. we still can own a number of aircraft so that to some extent a company does have assets. but the significant amount of equipment should be leased from third party. so that we are not bogged down with too many assets when times are bad. that was WAU (widespread asset unbundling)  all about. senior mgmt and its advisers realised the company was broke, very short of cash but had few billions in terms of unencumbered assets. so MH thru its good advisers at that time unlocked the value by unbundling them and sell them to government to get cash to pay debts and for operational purposes. and with such a move, the company had been so called 'freed' of large depreciation and other expenses (interest payments on loan) on the assets (aircraft) and those expenses were passed on to PMB (the govt).  and since these burden was taken away, mas could concentrate on its operation. that was why mas made money few quarters after WAU as large chunk of expenses i mentioned was no longer in its books. but MAS i think had failed to take advantage of this exercise.  it could have concentrated on improving its operation efficiency and productivity because these were where real profits could be generated in the future. 

 

and we could not allow MH to fail. because imagine if it failed. the multiplier effect of the whole business/economy in malaysia would be greatly affected. people on business could not fly, cargo could not be carried and these would negatively effect many many industries. the total loss would be way greater than the loss of MH.  however the notion that 'mh will never fail' is also detrimental to the moral/efficiency of the staffs.

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Well said Azahan, and ppl at MH need to realise that there's no longer such thing as an iron ricebowl. The point that Denny pointed out regarding BR's turnaround was a good one. Perhaps they could learn from there.

 

[Bing Chu 0]

..... but the significant amount of equipment should be leased from third party.....

 

..... and we could not allow MH to fail.....

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Sorry, can't say I totally agree with your first comment there - it all depends on the business model you are working on. Different companies (more specifically dirrefent captains of the companies) can have different approaches, but still achieve the same goal, which is to bring in a healthy bottom line.

 

Actually, now that the "few billions in terms of unencumbered assets" have now been 'unbundled' and their value realized through WAU, and that MH is now in dire straits again - ever wondered how and where the few billions was 'disposed' of ?!

 

As for Mr Jala, why the constant need to highlight his two year contract and promise to quit if things do not turn out right ? Has any of the current management or chairman offered to quit due to the massive losses before this ? Yes, the previous MD did leave, but was he solely responsible or just a convenient scapegoat ?

 

I do feel it's grossly unfair on Mr Jala to talk about grooming a successor when he hasn't even had a chance to warm up the MD's seat yet ! Give the guy a chance. Though the stated two years period before we can expect to see any positive results, it does smack of an attempt to buy time !

 

As for allowing MH "to fail" it is a harsh reality in today's business world that the weak will go the way of the dinasours. Our govt may wish and try to prop up the (so called) enterprise, but can it afford the cost (estimated RM3b?) and withstand the international political fallout. Remember, we are entering into the realms of AFTA, WTO etc

 

Just a few thoughts to share

[Sing Yew 1]

Sorry, can't say I totally agree with your first comment there - it all depends on the business model you are working on.  Different companies (more specifically dirrefent captains of the companies) can have different approaches, but still achieve the same goal, which is to bring in a healthy bottom line.

 

Actually, now that the "few billions in terms of unencumbered assets" have now been 'unbundled' and their value realized through WAU, and that MH is now in dire straits again - ever wondered how and where the few billions was 'disposed' of ?!

 

As for Mr Jala, why the constant need to highlight his two year contract and promise to quit if things do not turn out right ?  Has any of the current management or chairman offered to quit due to the massive losses before this ?  Yes, the previous MD did leave, but was he solely responsible or just a convenient scapegoat ?

 

I do feel it's grossly unfair on Mr Jala to talk about grooming a successor when he hasn't even had a chance to warm up the MD's seat yet !  Give the guy a chance.  Though the stated two years period before we can expect to see any positive results, it does smack of an attempt to buy time !

 

As for allowing MH "to fail" it is a harsh reality in today's business world that the weak will go the way of the dinasours.  Our govt may wish and try to prop up the (so called) enterprise, but can it afford the cost (estimated RM3b?) and withstand the international political fallout.  Remember, we are entering into the realms of AFTA, WTO etc

 

Just a few thoughts to share

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Well MH is still relatively shielded from the cold hard reality. Despite claims of competition with AK. Besides, it shouldn't be just Idris Jala that has to be the only one at work. That would be unfair.

 

Edited January 8, 2006 by Sing Yew

[T Azahan 1]

and when mr idris jala performs, and performs well...i hope the govt would keep him there. dont take him away. govt took md nor yusof away and put him into securities commission. i dont blame the govt. because everyone expected that after WAU was implemented, MH should start making money and continue to make money.

 

md nor yusof was a good leader. he learned the MH's operation fast. he is an accountant by profession. he was responsible for the success of WAU. then he went to securities commission. grave mistake! thus there were no follow ups on the implemenation. more uncontrolled leakages occurred after his departure i guess. and of course the fuel hike which could have been properly hedged. but dont get me wrong. hedging too much also could kill us if price of oil dwindles down. it's like 'damn if u do, damn if u dont.

 

but i am sure idris jala would be similar to md nor. hands on. smart. no glamour type. tough yet polite. and all i hope they continue to keep him if he succeeds.

[Sing Yew 1]

I suppose being from the petroleum industry Idris Jala may be more well versed when it comes to fuel hedging strategy but then again you need more than just appropriate hedging strategies to turn MH around.

 

[Bing Chu 0]

Well MH is still relatively shielded from the cold hard reality

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More of an understatement there - MH seems to be totally shielded from cold hard reality !

 

The fuel hedging, fuel price hike etc issues are IMO just excuses brought up to mask somewhat real and more deep rooted problems within MH. After all these years and tons of taxpayers' money, MH is still stumbling and tripping along it's merry way. Sad !

[H Azmal 0]

You know, Pan Am sold their HQ building in NYC to Metlife in 1981...and ten years later they went the way of the do-do... Switzerland and Belgium went without a national carrier for some time earlier this decade...anybody care to prophesize the fate of *our* MAS?

Edited January 8, 2006 by H Azmal

[Radzi 2]

Is this the beginning-of-the-end ???

This exactly happened to PanAm also, selling property first 

23879[/snapback]

Scary thought. I was thinking exactly the same thing.

 

Pan Am building in New York City. MAS building in Kuala Lumpur.

 

I still harbor the thought that if MAS wants to be profitable, they should look at procurement. Especially catering and engineering.

 

2 ringgit egg, 60 ringgit nasi lemak and 80 ringgit mineral water is very profitable, only that it is not MAS that will make the profit. But I don't think the catering company make that much money anyway, after all they buy prawns at 120 ringgit per kilo. But who supply them? Solve that problem and I'm sure MAS will be on the road to profitability.