MAS and AirAsia Shares Swap

[Mohd Azizul Ramli 2]

Actually I think he is a good candidate for the CEO post itself! We need some new blood and FY's CEO is a refreshing new face.

 

Unfortunately if he becomes CEO, the first duty he has to perform is to kill his own baby, FY jet services. Now, that will be a real test of his courage and creativity!

Very unlikely even though in a million years. Although the new set up has identified that MH needs an operational overhaul, there seems to be no changes to the 'MAS CEO HAS TO BE A MALAY/BUMI' policy, which I think should be the very first operational issue to be abolished. I am in the opinion that MAS' CEO position should be opened to a global audience. Do it the way Emirates does it - hired the very best talent in the world.

 

The focus of this deal is on Firefly as they are "wasting" AK's and MH's resources because it competes with both of them. Firefly is being repositioned as a regional full service carrier and will no longer be a LCC.

So can we dismissed the earlier news report that FY is going to concentrate on turbo props operation out of SZB only? To be a full service regional airline like MI, FY will not only have to maintain its current jet fleet, they will also have to refurbish them from the current LCC configuration to premium configuration with J cabin.

 

The whole deal will last for 5 years and is subject to a renewal of another 5 should the involved parties deem it is necessary [personally I would prefer something of a more long term to be set on stone - 5 years is just like the rollover period of MH's MD/CEOs in the past]. So what if everything fails? What will happen to MH (because I do not see AK being affected negatively at all through this deal)?

[Raymund Yeoh 1]

Very unlikely even though in a million years. Although the new set up has identified that MH needs an operational overhaul, there seems to be no changes to the 'MAS CEO HAS TO BE A MALAY/BUMI' policy, which I think should be the very first operational issue to be abolished. I am in the opinion that MAS' CEO position should be opened to a global audience. Do it the way Emirates does it - hired the very best talent in the world.

 

 

Azizul, I'm with u on this and I guess so does most Malaysians who wants MH to be one of the top in the world but as long as our country is run by BOLEHmen .... this will not happen anytime in the near future......even they do select someone non-bumi, he or she will just be a puppet in a nice cushy leather ottoman....in my opinion, the g'ment and all its associated siblings like Khazanah n the rest needs to HANDS OFF MH for it to be off the life support system.....just look at GA......there r improving by the day n I wont be suprised if they overtake MH in due time

[BC Tam 2]

Rumours (only rumours mind you) circulating was that the Tune Air couple were gunning for management control of MH

The one name heavily linked to the CEO post did not get the job

Instead, you now have an four member plus chair executive committee to "oversee the management of the company until such a time when a new managing director is appointed"

Indications are there of a power struggle at the top already - who and when (whether ?) this new CEO be identified/appointed will be indicator of the interested parties' motives

 

No facts from me, just speculation

[alberttky 0]

MAS, AirAsia shareholders dispell fears of price-fixing

 

KUALA LUMPUR: The collaboration agreement to be forged between full-service carrier Malaysia Airlines and low cost carrier AirAsia and its sister airline AirAsia X, should not viewed as a move to reduce consumer choice in terms of air fares but rather a means of facilitating growth for these airlines.

 

There have been market concerns that the collaboration between both airlines could lead to “price-fixing” of air fares to ensure route profitability and yields do not come under further pressure.

 

Ultimately, the fear is that consumers may be at the losing end as they may then have limited air travel options, more so for domestic flights now that AirAsia and MAS' major shareholders Tune Air Sdn Bhd and Khazanah Nasional Bhd have signed a share swap deal and collaboration agreement.

 

However, concerns that there could be “pricing-fixing” or a potential “cartel” were dispelled by the shareholders of both airlines as well as the deal adviser yesterday.

 

First, the collaboration agreement between MAS, AirAsia and AirAsia X will only come into effect after an anti-trust analysis is completed.

 

“We will be looking at all the anti-trust provisions in all the markets the three global airlines operate in,” said CIMB group chief executive officer Datuk Seri Nazir Razak said at the press conference yesterday after the signing ceremony of the collaboration framework between the airlines.

 

Both AirAsia and MAS said in their respective statements to Bursa Malaysia yesterday that the collaboration agreement would only be committed upon once an anti-trust analysis had been completed and was in compliance with the applicable laws with regards to anti-trust.

 

Locally, the Competition Act, which will be enforced from next January, prohibits anti-competitive agreements and abuses by dominant players.

 

Essentially, the anti-trust analysis by the local airlines will see them making the necessary anti-trust assessments for the areas they intend to collaborate, such as network and the viability of interlining passengers, and seek all necessary and desirable anti-trust approvals before undertaking or implementing them.

 

If there is any anti-trust, competition or other equivalent legal requirement under the collaboration agreement that does not allow such matters or transaction to be undertaken unless certain legal requirements are complied with, then such matter or transaction will not be proposed or undertaken until legal requirements have been complied with, both companies clarified in Bursa statements.

 

Under the collaborative agreement, the idea is for MAS to focus on being a full-service premium carrier, AirAsia at being a regional low cost carrier (LCC) and AirAsia X focusing on being a medium-to-long haul LCC, subject to appropriate anti-trust review.

 

MAS will also review Firefly Sdn Bhd's operations and MAS's shorthaul full-service carrier business may be undertaken by itself and/or through a new MAS subsidiary (proposed to be named Sapphire).

 

AirAsia group chief executive officer Tan Sri Tony Fernandes said AirAsia's fares would be reflective of the low cost market segment and the airline would not look at pricing itself out of the market.

 

“This is not a merger; it is a shareholder alignment. AirAsia has always been and will continue to be about lowering air fares. Every year, our fares go down (as load factors improve on route maturity). We will have to remain competitive and will not price ourselves out,” he said at the media briefing yesterday.

 

He added that for international routes, consumers still had the option to fly with many international carriers and therefore, both AirAsia and MAS needed to remain competitive in their air fares to draw in passengers.

 

http://biz.thestar.com.my/news/story.asp?file=/2011/8/10/business/9270728&sec=business

[Craig 0]

...First, the collaboration agreement between MAS, AirAsia and AirAsia X will only come into effect after an anti-trust analysis is completed.

 

“We will be looking at all the anti-trust provisions in all the markets the three global airlines operate in,” said CIMB group chief executive officer Datuk Seri Nazir Razak said at the press conference yesterday after the signing ceremony of the collaboration framework between the airlines.

 

Both AirAsia and MAS said in their respective statements to Bursa Malaysia yesterday that the collaboration agreement would only be committed upon once an anti-trust analysis had been completed and was in compliance with the applicable laws with regards to anti-trust....

 

http://biz.thestar.com.my/news/story.asp?file=/2011/8/10/business/9270728&sec=business

 

My emphasis bolded - Malaysia have anti-trust laws? That's news to me!

Edited August 10, 2011 by Craig

[Nik H. 3]

My emphasis bolded - Malaysia have anti-trust laws? That's news to me!

 

Craig, the Airline business is borderless. They are more concerned about foreign anti-trust laws rather than Malaysia's. Not everyone is stupid.

[flee 5]

My emphasis bolded - Malaysia have anti-trust laws? That's news to me!

No anti-trust laws until next year. However, they do not want to be blacklisted internationally for anti-trust practices.

 

Very unlikely even though in a million years. Although the new set up has identified that MH needs an operational overhaul, there seems to be no changes to the 'MAS CEO HAS TO BE A MALAY/BUMI' policy, which I think should be the very first operational issue to be abolished. I am in the opinion that MAS' CEO position should be opened to a global audience. Do it the way Emirates does it - hired the very best talent in the world.

Yes, unfortunately politics will prevail over business common sense when you are a GLC. Its a shame that MH will not be able to have the best people running it.

[Cheng Long 0]

My emphasis bolded - Malaysia have anti-trust laws? That's news to me!

 

Even if there is one, it's as good as people interpreting and enforcing them.

[Mohd Saat 0]

My emphasis bolded - Malaysia have anti-trust laws? That's news to me!

 

Malaysia will put into place anti-trust law next year.

 

However anti-trust laws are extra-territorial which means that a company can be taken to court for act of antitrust in a country where they do business even if the act was carried out another country e.g. at their home base. So MH can be taken to court by SQ in Singapore for an act of anti-trust done in Malaysia where SQ and MH both operates where in Singapore the anti-trust laws have been in place for sometime and yet there is none yet in Malaysia.

 

This is what needs to be established.

 

 

Very unlikely even though in a million years. Although the new set up has identified that MH needs an operational overhaul, there seems to be no changes to the 'MAS CEO HAS TO BE A MALAY/BUMI' policy, which I think should be the very first operational issue to be abolished. I am in the opinion that MAS' CEO position should be opened to a global audience. Do it the way Emirates does it - hired the very best talent in the world.

 

........

 

 

Please get your facts right. Kindly do not post without checking your facts.

 

Tan Sri Saw Huat Lye was chief executive officer of Malaysia Airlines from its inception in 1971 to 1982.

Edited August 10, 2011 by Mohd Saat

[flee 5]

MAS shares up, AirAsia down after stock swap

 

KUALA LUMPUR, Aug 10 — AirAsia shares were the biggest loser in early morning trade after yesterday’s collaboration and share swap with Malaysia Airlines was announced.

 

Shares in the low-cost carrier fell 27 sen or nearly seven per cent to RM3.68 as at 9.45 am this morning.

 

Share of the national carrier, meanwhile, jumped about 11 per cent to RM1.79.

 

Under the share swap unveiled yesterday, Tune Air and Khazanah, which control AirAsia and MAS respectively, will swap a 10 per cent stake in the budget airline for a 20.5 per cent share of the national carrier.

 

Khazanah denied yesterday, however, that AirAsia was bailing out MAS.

 

Shareholders of AirAsia will get one free MAS warrant for every 10 shares in the low-cost carrier while MAS shareholders will get one free AirAsia warrant for every 30 MAS shares.

 

HwangDBS Vickers upgraded MAS this morning to a “Buy” while maintaining its “fully valued” call on AirAsia.

 

Trading in the shares of both airlines resumed this morning after being suspended on Monday.

 

The two counters were the two most active stocks on Bursa in the first hour of trading.

 

Source: http://www.themalaysianinsider.com/business/article/mas-shares-up-airasia-down-after-share-swap/

[Mohd Saat 0]

Wow I'm amazed at how easy it is to hit the keyboard and past judgement on people. Unless you have the privilege of knowing all the facts first hand, it's better to just keep your judgemental comments to yourselves.

 

Agreed

[flee 5]

MAS-AirAsia deal: Back to the future

 

Let's first get the facts correct in the Malaysia Airlines (MAS)-AirAsia-AirAsia X deal just inked yesterday.

 

It is not a merger as widely reported although a stock or share swap normally occurs as part of a merger or acquisition when shareholders' ownership of the target company's shares is exchanged for shares of the acquiring company.

 

There is no reasonable rationale for a merger since all three airlines operate totally different business models. It is a swap to pave the way for what some analysts has described as a "partnership". In fact, yesterday's signing ceremony was termed as "comprehensive collaboration framework".

 

Through the share swap, AirAsia group chief executive Tan Sri Tony Fernandes is not the single largest shareholder in MAS.

 

The government's investment arm Khazanah Nasional Bhd, with a 49 per cent stake in MAS after the share swap and holding a special shareholder position of the government, will continue to maintain its position as the single largest shareholder in the national carrier. The aviation sector is a strategic sector to the economy and MAS will remain as a core holding in Khazanah's portfolio.

 

Also, Khazanah's commitment to AirAsia is considered "firmer" given its stake is via the unlisted Tune Air, hence illiquid.

 

As Tune Air's stake is via MAS, it would seem to have the option to sell into the open market if it is not in alignment with the views of MAS' board majority.

 

In addition, Khazanah also proposes to acquire some AirAsia X's shares on terms and at a price to be mutually agreed later.

 

Negotiations on a partnership had been ongoing since the days of Datuk Seri Idris Jala as MAS managing director. Khazanah's managing director Tan Sri Azman Mokhtar confirmed negotiations concluded at 2.05am on Sunday morning.

 

Shukor Yusof of international rating agency Standard & Poor's, who has been tracking both airlines for years, sees it as the "financial reengineering of MAS" that is "the hallmark of the Binafikir boys", who now run Khazanah.

 

Azman is one of the co-founders of Binafikir. The other is Mohammed Rashdan Mohd Yusof, who is Khazanah's executive director (investments) and recently named to the board of MAS. He has been named as MAS executive director.

 

"They (Azman and Rashdan) crafted the Widespread Assets Unbundling (WAU) for MAS in 2002 - essentially moving the debts to another government agency Penerbangan Malaysia Bhd - and it would seem they are having another go at realigning MAS' financial profile," he said.

 

Shukor is not far from wrong really. The man that brought in the Binafikir boys into MAS back then has returned as chairman of the national carrier. Tan Sri Md Nor Yusof had served as MAS managing director before.

 

At the press conference, Azman, Md Nor and Fernandes talked about growth and the immediate synergistic opportunities which can be realised without significant effect on any party's operations. This includes aircraft purchasing, engineering, ground support services, cargo services, catering and training.

 

The collaborative agreement signed between the three airlines will be for five years, with the option for a further five-year renewal.

 

Md Nor said the joint collaboration will help MAS focus on its strengths in its core markets . It will be able to offer services in engineering and other areas to both AirAsia and AirAsia X.

 

Source: http://www.btimes.com.my/Current_News/BTIMES/articles/masment-2/Article/

Edited August 10, 2011 by flee

[Kee Hooi Yen 0]

Is it possible to configure MAS A380 with premium seats on the upper deck (aka MH) and high density or budget seats at the lower deck (aka D7) ?

[Mohd Suhaimi Fariz 2]

Please get your facts right. Kindly do not post without checking your facts.

 

Tan Sri Saw Huat Lye was chief executive officer of Malaysia Airlines from its inception in 1971 to 1982.

 

And in 2001 they offered Niki Lauda the top spot. He turned them down to go back into F1 with Jaguar.

 

I wonder if the situation would be different if Lauda had accepted

 

Is it possible to configure MAS A380 with premium seats on the upper deck (aka MH) and high density or budget seats at the lower deck (aka D7) ?

 

Better yet, why not sell the A380 to D7 at cost price and use the proceeds to buy 77Ws. Then the question of 772 replacement can be solved in one go!

[khair 0]

Sapphire Air ? good bye to firefly

[Nik H. 3]

My comment was more about the assumptions being made about the "failure" or leadership qualities of individuals.

 

Alan, you will be even more amazed when you work with certain individuals in MAS, wondering how they ever got to where they are. There are two types in MAS, the not so smart group, probably the honest type, where being out of depth because they were thrusted into such duties is OK, and hence failure must be rewarded, and the very smart ones, the ones able to powerpoint their way and manipulate themselves into positions of power for self interest regardless of Management change. They are always there.

 

I will observe with great interest if the group of teflon coated SVPs of MH can con Tan Sri Tony and gang.

 

Please investigate :

 

a. Latest Security Boom Gate System which costs plenty of RMs but everyone knows is not necessary and will always break down. This project is unworkable but approved because of great powerpoint work. No one will be guilty here. Everything is well covered. - small money, just a couple of million.

 

b. The Al Wafeer Scandal that I have warned about many many many times. - big money, perhaps in excess of RM100 million.

 

My stories comes at the price of just a teh tarik.

 

My Number 0192310005.

 

I said investigate. I am not alleging wrongdoing. The above, just a teaser. I have more amusing stories.

 

Damn you people, how dare you screw up my beloved airline.

Edited August 10, 2011 by Nik H.

[Cheng Long 0]

Alan, you will be even more amazed when you work with certain individuals in MAS, wondering how they ever got to where they are. There are two types in MAS, the not so smart group, probably the honest type, where being out of depth because they were thrusted into such duties is OK, and hence failure must be rewarded, and the very smart ones, the ones able to powerpoint their way and manipulate themselves into positions of power for self interest regardless of Management change. They are always there.

 

I will observe with great interest if the group of teflon coated SVPs of MH can con Tan Sri Tony and gang.

 

Please investigate :

 

a. Latest Security Boom Gate System which costs plenty of RMs but everyone knows is not necessary and will always break down. This project is unworkable but approved because of great powerpoint work. No one will be guilty here. Everything is well covered. - small money, just a couple of million.

 

b. The Al Wafeer Scandal that I have warned about many many many times. - big money, perhaps in excess of RM100 million.

 

My stories comes at the price of just a teh tarik.

 

My Number 0192310005.

 

I said investigate. I am not alleging wrongdoing. The above, just a teaser. I have more amusing stories.

 

Damn you people, how dare you screw up my beloved airline.

 

Try send your stories to Malaysia Today. Who knows might get published.

[filipeseda 0]

Quote from the ST 10/8

 

"AK can learn of the experience of MAS and MAS can learn of the cost-cutting measures of AK"-- Mahatir Do I have to say more.

[Mohd Suhaimi Fariz 2]

My stories comes at the price of just a teh tarik.

 

My Number 0192310005.

 

I said investigate. I am not alleging wrongdoing. The above, just a teaser. I have more amusing stories.

 

Damn you people, how dare you screw up my beloved airline.

 

Captain, if you name the time and the place, I'd be eager to belanja you a couple cups of teh tariks.

[flee 5]

AirAsia chief plans to have the last laugh

 

Tony Fernandes, chief executive of AirAsia, is one of the region’s boldest and most successful entrepreneurs. But is his decision to take a stake in lossmaking Malaysian Airline System another masterstroke, or a disastrous mistake? The answer may depend on whether his ego has swamped his business sense.

 

More here: http://www.ft.com/cms/s/0/381bfcf2-c1a0-11e0-acb3-00144feabdc0.html

[Gavin Andrew David 6]

Malaysia will put into place anti-trust law next year.

 

However anti-trust laws are extra-territorial which means that a company can be taken to court for act of antitrust in a country where they do business even if the act was carried out another country e.g. at their home base. So MH can be taken to court by SQ in Singapore for an act of anti-trust done in Malaysia where SQ and MH both operates where in Singapore the anti-trust laws have been in place for sometime and yet there is none yet in Malaysia.

 

This is what needs to be established.

 

 

 

 

Please get your facts right. Kindly do not post without checking your facts.

 

Tan Sri Saw Huat Lye was chief executive officer of Malaysia Airlines from its inception in 1971 to 1982.

 

Things never change in 30 odd years ?

[Mohd Azizul Ramli 2]

I reckon the first set up in 1971 following the split of MSA, where the top 3 positions in MH was occupied by a Chinese, a Malay and an Indian, is pretty much reflective of the current affairs at that time, where the country has just recovered from a deadly race riot just 2 years prior.

[Mohd Saat 0]

I reckon the first set up in 1971 following the split of MSA, where the top 3 positions in MH was occupied by a Chinese, a Malay and an Indian, is pretty much reflective of the current affairs at that time, where the country has just recovered from a deadly race riot just 2 years prior.

 

There never was a policy of Malay/Bumi only CEO Policy as posted.

[Nik H. 3]

There never was a policy of Malay/Bumi only CEO Policy as posted.

 

If there was then in my 30 years there I have never heard nor seen such a policy.

[BC Tam 2]

This from flee's reply #187 above

Also, Khazanah's commitment to AirAsia is considered "firmer" given its stake is via the unlisted Tune Air, hence illiquid.

Anyone know what it means ?

Khazanah will not be holding Air Asia shares but that of Tune Air instead ?