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MAS and AirAsia Shares Swap

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AJ is a great guy who is really down to earth. Have known him personally more than a decade ago when he was in Malakoff and politely declined any title award (Datoship/TanSriship etc) ever since. He is not only a gentleman who have passion towards flying and possessed a Private Pilot Licence, he is also would like to spend his free time by polishing his flying skill and taking parts in most of extreme outdoors activities.

 

I wish you all the best AJ.

 

:hi:

 

Sounds promising!

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Sounds promising!

 

I hope this AJ (if he is indeed the next CEO) have enought guts n brawn to turn the whole airline upside down if needed to bring it back to the good old days...

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AJ is a great guy who is really down to earth. Have known him personally more than a decade ago when he was in Malakoff and politely declined any title award (Datoship/TanSriship etc) ever since. He is not only a gentleman who have passion towards flying and possessed a Private Pilot Licence, he is also would like to spend his free time by polishing his flying skill and taking parts in most of extreme outdoors activities.

 

I wish you all the best AJ.

 

:hi:

 

The million dollar question is how much free hand he has for execution or he is merely the management committee postal boy? :pardon:

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Are minority shareholders being given the full picture of MAS-AirAsia collaboration?

 

THE recent share swap arrangement between the major shareholders of AirAsia and Malaysia Airlines (MAS) comes with the benefit of a period of contemplation.

 

On Aug 9 a collaboration agreement was announced between Tune Air Sdn Bhd and Khazanah Nasional Bhd, the major shareholders of AirAsia and MAS respectively, to strengthen their collaboration to “further align their respective interests in AirAsia and MAS”.

 

Our views are from a minority shareholder perspective on both sides of the public listed companies (plcs). Firstly, the collaboration sees two domestic competitors wanting to work together for a common good. It also seemed like a move toward acknowledging the seemingly unsolvable problems that MAS poses, and the Government allowing Tan Sri Tony Fernandes to come in and shake things up. MAS minorities gain the considerable expertise of Fernandes and Datuk Kamarudin Meranun, two of the four pioneers of what is essentially one of the best low-cost airlines in the world.

 

However, this significant advantage is somewhat cancelled out by a couple of key challenges.

 

One of them could be a new chief to handle the mindset of MAS' 20,000 employees under the old bureaucreatic way, quite the opposite of AirAsia's entrepreneurial and achievements-based culture of Fernandes' team.

 

Another issue that further blots MAS' long-term view is an out-of-court settlement involving MAS' former executive chairman, Tan Sri Tajudin Ramli where MAS is among a number of GLCs negotiating for global settlement of all civil suits against Tajudin.

 

The case management has been set for Sept 29.

 

Our interest is centred on the following:

 

That the respective GLC boards, including MAS, assess the merits and demerits of the proposed global settlement, and to be transparent to their shareholders including the timelines, settlement term, the pros and cons, rationale, the ringgit amount involved, and other financial and non-financial impacts.

 

Interested directors should also declare their interests and abstain from participating in any discussion or voting on the proposed settlement.

 

The boards are responsible and accountable to all the shareholders, hence full and proper disclosures will go a long way to help to clarify the doubts of the shareholders.

 

As we know from recent announcements, the problems at MAS kept adding up. It reported a wider-than-expected second quarter loss of RM530mil, bringing its year-to-date losses to a staggering RM745mil.

 

And what of the perspective from an AirAsia minority shareholder? Slightly negative.

 

Where MAS benefits from the added expertise of Fernandes and Kamarudin, it in turn could be AirAsia's loss. Shareholders would have bought into AirAsia's attention to costs management, brand-building, fleet and regional expansion. And until recently, both Fernandes and Kamarudin executed brilliantly on all these counts.

 

This share swap could dilute their attention.

 

However, this is still an arrangement that can work, since two heads are better than one provided always that execution and absolute accountability is the order of the day. Any less, and any one of a number of externalities, such as volatile fuel costs, uncertainty over global economies and trading activity, makes this partnership of unequals an arrangement that could yet trigger the exit clause under the five-year duration of the collaboration agreement.

 

It is also a deal made by the parents of both airlines, and thus does not involve the buy-in of the shareholders of either airline. But given the significance from both a national as well as public-private initiative viewpoint, the interested parties must at all times make their key decisions transparent.

 

To recap, the announced deal saw an agreement to acquire from each other existing shares of both companies, with the result that Tune Air will hold 685,142,000 ordinary shares of MAS representing 20.5%, while Khazanah will hold 277,650,600 ordinary shares in AirAsia representing 10% equity interest in AirAsia.

 

In addition, a proposed warrants exchange was announced, which involved AirAsia issuing 111,060,240 free AirAsia warrants to MAS shareholders and MAS issuing 274,056,812 free MAS warrants to AirAsia shareholders. Assuming all the warrants are exercised, the total number of AirAsia shares to be issued amounts to 111,060,240 shares, or 4% of the total. And the total number of ordinary shares in MAS be issued assuming full exercise of the MAS warrants is 274,056,812 MAS shares, representing 8.2% of the total.

 

Some of the stated positives are collaborating in areas where there are “substantial synergies” to be realised, either through joint procurements, increased scale, migration to best practices, lower cost, and the enhanced ability to capture non-captive third party revenues.

 

And the recognition that there is significant potential in areas like maintenance, repair and overhaul, ground-handling, training, catering and cargo. The plan envisaged an early focus on quickly-achievable synergies such as joint procurements.

 

http://biz.thestar.com.my/news/story.asp?file=/2011/9/7/business/9431799&sec=business

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Looks like early "close shop" for FY Jet's to BKI and KCH, NO MORE price from Oct 30, 2011; plus LGK route is NULL and VOID now...

 

That's mean FY cancel flight KUL-LGK early schedule commence on Dec 2011?

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I think so, after sawing someone post a thread on their FB; I click on the website, found that only SBW and SDK remains open for sale from Winter schedules...the other 3 no more...

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So they are going to transfer all the flights back to MH?

Even if they transfer to MH, don't expect FY prices.

 

Anyways, I've heard that Mr. Ahmad Jauhari is considering the offer for the MD's spot, though Rashdan aka Danny is angling to be named as MD himself.

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Anyways, I've heard that Mr. Ahmad Jauhari is considering the offer for the MD's spot .....

In my opinion (quirky & warped I'll admit) it's getting progressively promising that Mr AJ's appointment as MH's CEO (if it is to be so) is taking longer than usual to be officially announced :D

Edited by BC Tam

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In my opinion (quirky & warped I'll admit) it's getting progressively promising that Mr AJ's appointment as MH's CEO (if it is to be so) is taking longer than usual to be officially announced :D

 

Well, he's still weighing the pros and cons. But apparently he's leaning towards saying yes. An acquaintance of mine is a relative of his and she confirms what's been said about him, that he's humble etc.

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So it is true that FY will be suspending all the Boeing routes/ East Malaysian routes?

Any idea what are the reasons behind?

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AK is already getting what they want out of this deal... <_ src="%7B___base_url___%7D/uploads/emoticons/default_mad.gif" alt=":angry:">

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from here

 

MAS unions in labour action threat over AirAsia deal

UPDATED @ 04:35:34 PM 08-09-2011

 

September 08, 2011

 

KUALA LUMPUR, Sept 8 — Three unions in Malaysia Airlines representing about 15,000 employees have threatened picket action over the national carrier’s share swap exercise with AirAsia.

Union representatives told reporters today that they feel the deal would not benefit MAS, and that they suspect the carrier’s new management team was planning the creation of a new brand within the airline as part of a union-busting move.

 

“We do not agree with the collaboration or the move to establish the new airline Sapphire (under the deal),” said MAS Employees’ Union (Maseu) president Alias Aziz.

 

Maseu is joining the Airline Workers Union of Sarawak and Air Transport Workers Union of Sabah in threatening industrial action in the attempt to stop the share-swap from going ahead.

 

In an attempt to bolster the fortunes of the flag carrier, state asset manager Khazanah Nasional Berhad swapped 20.5 per cent of MAS stock for a 10 per cent stake in Asia’s biggest budget carrier AirAsia on August 9.

 

The swap enabled AirAsia bosses Tan Sri Tony Fernandes and his partner Datuk Seri Kamaruddin Meranun to sit on the MAS board and will ostensibly help turn it around.

 

Khazanah has denied 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.

 

MAS announced in August a net loss of RM527 million for the second quarter of 2011 due to higher fuel costs despite recording a better yield and a 9 per cent growth in passenger revenue from the same period last year.

 

This brings total losses in the first half of the year to RM769 million even as the airline said that profit outlook for the second half of the year appears bleak.

 

Its main regional competitor Singapore Airlines, while also hit by higher fuel costs fared better with a S$44.7 million (RM108 million) net profit for the same period.

 

The flag carrier said its group total revenues increased to RM3.485 billion for the second quarter of 2011, or eight per cent more than the RM3.213 billion for the same quarter last year, while passenger revenue was RM2.086 billion for the same period this year compared to RM1.912 billion for the corresponding period in 2010.

 

Maseu secretary-general Abdul Malek Arif claimed today the union expected up to 80 per cent of the company’s staff to be transferred to Sapphire.

 

He said such a move would dilute the union’s membership and affect its ability to represent the employees who will no longer be represented in the new airline.

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Maseu is joining the Airline Workers Union of Sarawak and Air Transport Workers Union of Sabah in threatening industrial action in the attempt to stop the share-swap from going ahead.

Err... the share swap has taken place like a month ago and Uncle Tony has been in like 5 of MAS' BOD meetings. It is such a pity that MAS' 15,000 employees is represented by a snail-paced union that took this long to make a noise, and that the noise won't make any different as everything is a done deal a month ago.

 

Maseu secretary-general Abdul Malek Arif claimed today the union expected up to 80 per cent of the company’s staff to be transferred to Sapphire.

Based on the number of employees of the future Sapphire i.e. 16,000 employees (80% x 20,000 of MAS' current employees), it is now confirmed that MH's future size will be like super tiny from its current size. Can MH survive with just 4,000 staff (20% x 20,000)?

 

I am certain that Sapphire won't be needing as many as 16,000 employees (80% x 20,000) for its operation. We could expect a day after the MH-Sapphire staff transfer, a massive job cut will happen in Sapphire.

 

Anyway, reiterating what Capt. Nik H posted in this thread earlier on, the bright ones won't be staying onboard this sinking ship. On a positive point, this is MH's golden chance to get rid of so many of its dead woods once and for all.

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..... the bright ones won't be staying onboard this sinking ship. On a positive point, this is MH's golden chance to get rid of so many of its dead woods once and for all.

Ouch ! :)

Will there be even 4k left at the end of the day ? :p

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let us see how many workers are required to do the turnaround on MH planes......

and imagine, how much does MH spend on these people!

 

ramai.jpg

 

first, near the engine, 2 people are required to do the refuelling! and second, another operator is required to monitor the tanker. (3 workforces)

luggage handling (4.....with one sitting at faaaar right near the aerobridge! So, that's already 5

and a pilot (that's a must to fly a plane), plus one FO

catering.....2 at least!

cabin crew, 5 for meal sectors, and 4 for juice sectors....

gate operators, 2 or even 3

holding lounge, upon entering, I spotted 4, 1 was checking boarding passes, 1 was doing announcement, and 2 were doing nothing....

cleaners : I spotted 4 cleaners

 

so, at least 30 people are involved in a single turnaround process.....

 

And.....

 

what are they doing?

 

nganga.jpg

 

doing nothing....

the photo was taken during first hari raya where there were not so many movements @ KUL, but they are plenty of workers sitting here and there.

 

Now, I do understand why MH is always in RED. Overhead costs! Any opinions?

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Just to add, our insider friend revealed this not too long ago:

 

 

For instance, our HR & Management proudly announced in public that we have 1300++ employees in maswings, where the fact is our Staff numbers does not exceed 500 (staff number starts with 8000001 to 80004XX now) so i am not sure whether MASWings is paying for ALL OF THE MAS GROUND CREW IN BORNEO'S SALARY aswell.

 

i mean, if the figures are off by maybe 20 to 50 persons, we can understand. But 1300 staff is wayyy off from the actual less than 500.

 

so we might be carrying "dead wood" for our parent company (since MASWings receives the State Government Subsidy!), i suspect this is the case. Parent company takes advantage to dump all their expenses over in Borneo to MASWing's account since it is the government's money anyway.

 

logically thinking, maswings only operated 14 aircrafts (10 ATR72, 4 Twin Otters), does it really make sense that we have an average of 93 staff (1300 staffs divide by 14 planes) to run 1 aircraft?

 

lets take a look, 2 pilots, 2 cabin crews, let's say 5 ground handlers, 1 engineer, 1 technician, 3 dispatch staff, 5 airport operations personnel. That's only 20 workers needed. Lets say we count all the misc personnel, they cant even double to 40 staff per aircraft.

 

but we are talking about 93 staff per aircraft? it would be a miracle to be making money with this amount of staff running such little service.

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You have no idea how the luggage was being unloaded from cargo in KLIA. I saw it with my eyes, they just dumped like that. Holy cow!

 

It happens everywhere. You expect them to handle your luggage with TLC when they are exposed to the elements and paid s#1t? :good:

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