MAS and AirAsia Shares Swap

[zamim 0]

Shut MAS down. Shut Proton down. Shut KTM down. Shut Government down. What else to shutdown?

 

[Raymund Yeoh 1]

Frankly speaking, they should just shut down MAS. Then all the crony contracts can be terminated.

 

Too bad if TF's 20% is worth 0 sen.

 

Fully agree...They should do a JAL on MH....

[KK Lee 5]

Fully agree...They should do a JAL on MH....

 

Probably is the only solution and is long overdue.

[Arthur Van Straten 0]

@Flee and Raymund.

 

OK then, shut it down. Then what? you have a plan??

 

Comparing JAL with MAS in its present predicament is like trying to eat lobster in a KL mama stall.

JAL has battled the unknown, against all odds , known and unknown.

MAS can never do that as the odds are fully known.

 

Malaysian aviation industry has to come up with far more than, "lets do a JAL"

There is simply no platform for doing things like that. You may try to do another "AK".

 

@ Flee. I admire your unconditional approval of all AK doings. Be a sport, and fence it to the end.

@ others, be informed that no airline, pushed or patronised by whomever, without solid

sustainability in terms of profit potential and customer adherance to promises kept, will never survive.

Despite whatever massive hidden and covert subsidies are applied to them.

 

History always repeats itself.

 

Cheers

Art

[V Wong 0]

 

It's coming close to a year ! N what do we c? Route cuts , the slaughtering of FY jets n noticed that fares r now going up across all the three of them !

 

Exactly... The fares are all going up across all 3 airlines... gone r the days of cheap travel with AK and FY.

So I am back to premium airlines the past few months as the value is higher.

Edited April 26, 2012 by V Wong

[Cheng Long 0]

It's coming close to a year ! N what do we c? Route cuts , the slaughtering of FY jets n noticed that fares r now going up across all the three of them !

 

The last quarter they included one large once off loss.. So hope the numbers will look better this time around.

 

But honestly, the new management is also very disappointing. I have yet to see any meaningful improvements. Having said that keep on changing the management will not be good either, so I think they should be given a bit more time. Maybe see the their financial result this quarter and decide.

[Naim 6]

 

Latest from Reuters today.

 

MALAYSIA PRESS-Talk of MAS deal is off-The Sun

 

http://www.reuters.com/article/2012/04/26/malaysia-press-idUSL3E8FQ1A620120426

[Radzi 2]

Bring back the RED-and blue MAS logo, send the deathly QPR-blue logo back to LCCT where it belongs. And bring back the FY jets !

 

 

Putrajaya to undo MAS-AirAsia share swap, cooperation pact remains

 

 

By Jahabar Sadiq

 

Editor

April 28, 2012

KUALA LUMPUR, April 28 — Putrajaya has decided to unravel the nine-month Malaysia Airlines-AirAsia alliance by next Wednesday as it has failed to show any promised improvement or lift the morale of the 20,000-strong staff in the flag carrier that lost RM2.52 billion in 2011, say sources, but a cooperation agreement is expected to kept in place.

The Malaysian Insider understands that stocks of both Malaysian carriers will be suspended on Monday ahead of the announcement on Wednesday. Tuesday is a public holiday for Labour Day.

"The deal will be unwound next week. That's the end of that," a source told The Malaysian Insider, confirming rumours that swirled for the past few months of a break-up between the flag carrier and Southeast Asia's largest budget carrier.

According to the source, state asset manager Khazanah Nasional Berhad is to take back a 20.5 per cent stake of Malaysia Airlines (MAS) it exchanged with Tune Air Sdn Bhd, the majority owner of AirAsia, for 10 per cent stake in the low-cost carrier. Both carriers' share prices have declined since the deal was made last year. AirAsia closed a sen lower at RM3.37 a share yesterday while MAS also shed a sen to RM1.24 per share.

When the deal was announced last August 9, AirAsia was trading at RM3.95 a share while MAS was at RM1.60.

The Malaysian Insider had reported on March 9 that Putrajaya was reviewing the deal after the MAS Employees Union (Maseu) had met and urged Prime Minister Datuk Seri Najib Razak to unravel the deal, which would have broken MAS into separate long- and short-haul operations.MAS also operates the Firefly community airline and MASwings for rural air services in Sabah and Sarawak.

However, MAS has aborted plans for the short-haul operations, castin doubts over its business transformation plans it announced last December as part of the comprehensive collaboration framework (CCF) signed between both carriers.

The CCF and share swap has come under scrutiny from the Malaysia Competition Commission (MyCC) due to concerns of a domestic monopoly.

“I cannot make any announcement ... we are still investigating (the share-swap agreement). When the time is right, we will tell you,” MyCC chairman Tan Sri Siti Norma Yaakob was quoted as saying recently.

But another source said the CCF between both carriers will continue as Malaysia needs to fight off other airlines coming in when the Asean Open Sky Policy takes off in 2015. The policy will see increased competition with unlimited flight frequencies between Asean's 10 major cities.

"The CCF remains. Both airlines will work together despite not having common main shareholders," added the source.

Khazanah and Tune Air agreed to the share swap last August, after four previous unsuccessful attempts for an alliance between MAS and AirAsia, which soared from a decade ago when Tan Sri Tony Fernandes and partners bought the two-aircraft operation and its debts for RM1.

Khazanah’s CIMB Bank advised both parties in the deal, which was seen as the last attempt to save MAS despite an earlier rescue programme in 2001 planned by advisory firm BinaFikir Sdn Bhd.

MAS has slightly more than 20,000 staff although former MD Datuk Seri Idris Jala had cut it down to 17,000 when he left in 2009. Industry analysts say the flag carrier could just do with one-third of its current staff especially with cuts in routes in the past six months.

Cutting staff could improve costs but is seen as a major political liability in Selangor, where MAS has most of its operations and the state that Najib wants to win back in the next elections.

The entire airline group posted a net loss of RM1.28 billion for the fourth quarter of last year, bringing its total net loss for 2011 to RM2.52 billion. MAS, however, did see a marginal increase in group revenue, going up two per cent from the previous year to RM13.9 billion in 2011.

The airline attributed the losses to the increase in fuel price, which rose up from US$95 per barrel in 2010 to US$133 per barrel in 2011.

The bigger-than-expected losses were also due to additional provisions like redelivery of aircraft, impairment of freighters and stock obsolescence.

MAS hopes to finalise and announce a plan to raise funds and strengthen its balance sheet by May. This is critical as the carrier’s plan to deploy 23 new aircraft this year would cost some RM6 billion.

 

 

http://www.themalays...n-pact-remains/

Edited April 28, 2012 by Radzi

[Cheng Long 0]

Will be interesting to see how this unravel.. So guess TF will leave MH.. What about his men now in many top management positions? They already know a lot of MH's confidential business info by now. MH will need a strong leader and team to fight all odds foreign and within.

[S V Choong 4]

Bring back the RED-and blue MAS logo, send the deathly QPR-blue logo back to LCCT where it belongs. And bring back the FY jets !

 

 

Fully agreed... the blue logo is anything but "premium" feel...

 

Didn't know they hired Landor to do the design too. Hopefully it doesn't last... like the one on JAL...

Edited April 28, 2012 by S V Choong

[Radzi 2]

So much has been said about the resistance of MH staff toward the CCF. Not much was heard from the other side. So what is the view of AK / D7 staff regarding the collaboration?

 

Just a couple of months ago it seems that MH narrowbody crew will be the victim; with the split of the company, FY will run the newco and some MH NB crew will be of of job or seconded to foreign carriers such as Lion. Now it seems that the fortunes has reversed; FY jet crew will either get seconded somewhere, go back to ATR or lose their job.

 

No more competition, people losing their job, these are the untold stories.

[S M Tang 0]

Will we see ANOTHER new livery on the A380?

[flee 5]

So much has been said about the resistance of MH staff toward the CCF. Not much was heard from the other side. So what is the view of AK / D7 staff regarding the collaboration?

 

Just a couple of months ago it seems that MH narrowbody crew will be the victim; with the split of the company, FY will run the newco and some MH NB crew will be of of job or seconded to foreign carriers such as Lion. Now it seems that the fortunes has reversed; FY jet crew will either get seconded somewhere, go back to ATR or lose their job.

 

No more competition, people losing their job, these are the untold stories.

I don't think those at the AirAsia Group people are that happy about it either. Sleeping with the "enemy" is not something either MH or AK people had anticipated!

 

However, I do think that the initial intention is to eliminate wasteful competition and to pool resources so that economies of scale can be had. There is enough common ground on things like MRO, catering, fuel management, etc.

 

I think the govt. was pretty alarmed when Firefly jet had a few unintended consequences - e.g. caused MH and AK losses while FY was also losing money on those services too.

 

As of 4 pm, the rumoured share suspensions have not happened. So it could be that those rumours are unfounded or the action may take a few more days to be implemented.

 

I think that this is a really difficult case to solve. Govt., MH Unions and staff,TF/AK group all have their own agendas. Whether these agendas can be successfully combined or not remains to be seen. But I still stand by my original comment - MH should be shut down if the problems are insurmountable.

 

What will replace MH after that? Why not let the private sector decide? Govt. should not be involved in business, it should only act as a facilitator - especially in the aviation industry where competition is global and things move very quickly, far too quickly for corrupt and inefficient politicians to respond.

Edited April 30, 2012 by flee

[Ikman Ikreza 0]

So much has been said about the resistance of MH staff toward the CCF. Not much was heard from the other side. So what is the view of AK / D7 staff regarding the collaboration?

 

Just a couple of months ago it seems that MH narrowbody crew will be the victim; with the split of the company, FY will run the newco and some MH NB crew will be of of job or seconded to foreign carriers such as Lion. Now it seems that the fortunes has reversed; FY jet crew will either get seconded somewhere, go back to ATR or lose their job.

 

No more competition, people losing their job, these are the untold stories.

 

Yup, some of FY jet crew now no more much roster on May onwards (just standby) and as per previous townhall they have decided either secondment to MH (start all over from below) or back to ATR for those got ATR rating.

[jahur 0]

Heard some rumors that ex FY and ex South African 9M-FFD and 9M-FFE will be returned and no longer operating for MH after the end of may. Can anyone clarify this?

[flee 5]

What’s next for MAS?

 

WHAT now for MAS? Chances are that the speculation is true, that the Malaysia Airlines (MAS)-AirAsia Bhd swap is being unwound as we speak, with an official announcement out soon.

 

Collaboration between the two will be maintained, so the theory goes. If so, while AirAsia will continue to get on with its business of providing low-cost connectivity, what will happen to MAS?

 

Assuming the share-swap agreement wasn't the best fix for MAS, going by those who denounce it, the million dollar (or in MAS' case, the billion dollar) question is, what's it going to take to turn this company around?

 

Previous suggestions by this writer included flogging it off to the highest bidder. That must remain an option for its largest shareholder, Khazanah Nasional Bhd, which had only recently successfully divested its holdings in another problematic company, Proton Holdings Bhd. But selling MAS won't work if there aren't any takers or the bids aren't high enough.

 

It will also be interesting to see if MAS does revert to any of the thinking that went on when the share swap was envisaged, namely to focus on the premium market. Other national airlines seem to have made some progress in that direction, such as British Airways and Singapore Airlines.

 

Will MAS, with its large staff count and widespread business areas, be able to morph that way? Will it be able to change to meet the rising competition or will there be too much resistance?

 

Also, it will be interesting to see what rationale is put forward if and when the unwinding of the share swap is announced. It may be that anti-competitive concerns may be the stated rationale, although word on the street is that the decision is more related to the wishes of some quarters within MAS.

 

If the latter is true, one really wonders if this group of people have any answer on how to fix MAS. It is hoped they or someone else does, because if no plan comes up fast, this company could be nose-diving into more financial trouble if not bankruptcy.

 

And that must surely mean huge pay cuts or worse, retrenchments.

 

Hence, those who will be pleased with any decision to unwind the share swap should be just as enthusiastic about what's next for MAS, because left alone, its future may be even more dicey.

 

Source: http://biz.thestar.com.my/news/story.asp?file=/2012/5/1/business/11208532&sec=business

[KK Lee 5]

Watch out for ‘one may get more than what s/he wish for’

[Josh T 0]

Good lord...what a mess!

Qantas should buy a 49% stake in MAS so they can have enough power to effect some changes to turn this airline around!

[BC Tam 2]

Watch out for ‘one may get more than what s/he wish for’

Yup, another upcoming opportunity for "Going Beyond Expectations"

 

Qantas should buy a 49% stake in MAS so they can have enough power to effect some changes to turn this airline around!

I suspect as long as gahmen still holds the one golden share, no sane outsider will come within a barge pole length

[flee 5]

Malaysia Airlines shares to be suspended amid tie-up doubt, say sources

 

KUALA LUMPUR, May 1 – Shares of Malaysian Airline System (MAS) will be suspended from trading tomorrow, two sources said, amid speculation that the national carrier’s proposed RM1.1 billion share swap with AirAsia will be cancelled.

 

Trading of the stock will be halted due to “a pending corporate announcement,” according to one of the sources, who declined to say if the share swap will be scrapped.

 

The second source said MAS will announce the cancellation of the deal with the budget carrier. Both of the sources have direct knowledge of the proposed share swap.

 

Speculation that the deal would collapse has grown in recent weeks as the plan encountered strong resistance from the 20,000-strong MAS union, which voiced concern that the tie-up resembled a takeover by AirAsia founder Tony Fernandes and his brand of aggressive cost cutting.

 

Under the deal announced in August, Tune Air, controlled by AirAsia’s Fernandes and his deputy Kamarudin Meranun, would take a 20.5 percent stake in MAS and two board seats. In exchange, state investment arm Khazanah Nasional, the majority shareholder in MAS, would hold 10 per cent in AirAsia.

 

The deal, formulated by Prime Minister Najib Razak and signed last August, was to help both carriers compete effectively against rivals like Tiger Airways and Singapore Airlines once the Southeast Asian open-sky policy comes into effect in 2015.

 

In February, MAS reported its worst-ever loss of RM2.5 billion for 2011, shocking analysts who had expected the restructuring to limit losses.

 

MAS and government officials couldn’t be reached for comment today because of a national public holiday.

CIMB was the adviser for both companies on the deal, banking sources said. – Reuters

 

Source: http://www.themalaysianinsider.com/business/article/malaysia-airlines-shares-to-be-suspended-amid-tie-up-doubt-say-sources/

[Ruiz Razy 1]

Malaysia Airlines shares to be suspended amid tie-up doubt, say sources

 

KUALA LUMPUR, May 1 – Shares of Malaysian Airline System (MAS) will be suspended from trading tomorrow, two sources said, amid speculation that the national carrier’s proposed RM1.1 billion share swap with AirAsia will be cancelled.

 

Trading of the stock will be halted due to “a pending corporate announcement,” according to one of the sources, who declined to say if the share swap will be scrapped.

 

The second source said MAS will announce the cancellation of the deal with the budget carrier. Both of the sources have direct knowledge of the proposed share swap.

 

Speculation that the deal would collapse has grown in recent weeks as the plan encountered strong resistance from the 20,000-strong MAS union, which voiced concern that the tie-up resembled a takeover by AirAsia founder Tony Fernandes and his brand of aggressive cost cutting.

 

Under the deal announced in August, Tune Air, controlled by AirAsia’s Fernandes and his deputy Kamarudin Meranun, would take a 20.5 percent stake in MAS and two board seats. In exchange, state investment arm Khazanah Nasional, the majority shareholder in MAS, would hold 10 per cent in AirAsia.

 

The deal, formulated by Prime Minister Najib Razak and signed last August, was to help both carriers compete effectively against rivals like Tiger Airways and Singapore Airlines once the Southeast Asian open-sky policy comes into effect in 2015.

 

In February, MAS reported its worst-ever loss of RM2.5 billion for 2011, shocking analysts who had expected the restructuring to limit losses.

 

MAS and government officials couldn’t be reached for comment today because of a national public holiday.

CIMB was the adviser for both companies on the deal, banking sources said. – Reuters

 

Source: http://www.themalaysianinsider.com/business/article/malaysia-airlines-shares-to-be-suspended-amid-tie-up-doubt-say-sources/

 

Now will there b another flip flop decision on pale logo, FY jets , reinstating key economic destinations (ZRH,DXB, EWR .. Etc.) , BKI HUB... Etc.

[nrazmoor 0]

Being an outsider my feeling is that those saying NO to this share swap is just because they hate TF.. nothing more than that.

I mean, how can u go to bed with the one you hate the most??

Dont get me wrong, the Unions are sometimes can lead to the downfall of certain company or country( just see some europe county these days).. It puzzled me to hear that MAS actually have 8 unions when in fact PETRONAS have non for their executive level. If MAS really beyond repair after the split i guess the union will loss the most (do they?)... and yes the critics can say they have undergone many turnaraound and what is the different for tis time around? MAS still have a dear heart in many malaysian and to see it how it perform today definately a sad thing. \

 

heard rumours saying that khazanah will let go mas.. but are they willing to sell mas to foreign company?. If they brave enough i do hope that both IAG and Qantas will buy the share and trully turn MAS to be a force to be reckon with. If that happen not only MAS, MAHB and malaysian will see the benefit. it just that the so called pride of having malaysian owned company will be gone (but hey.. we still have AA aren`t we )

Edited May 1, 2012 by nrazmoor

[flee 5]

AirAsia does not see itself only as a Malaysian company. It is now saying it is an ASEAN company.

Edited May 1, 2012 by flee

[Cheng Long 0]

When this share swap thing first came about, a lot of people were skeptical and not in favour of it. So in order to win trust and support, they need to produce results. But result's lacking. So people are getting even more skeptical and dislike the whole thing.

[Ahmad M 1]

Being an outsider my feeling is that those saying NO to this share swap is just because they hate TF.. nothing more than that.

I mean, how can u go to bed with the one you hate the most??

Dont get me wrong, the Unions are sometimes can lead to the downfall of certain company or country( just see some europe county these days).. It puzzled me to hear that MAS actually have 8 unions when in fact PETRONAS have non for their executive level. If MAS really beyond repair after the split i guess the union will loss the most (do they?)... and yes the critics can say they have undergone many turnaraound and what is the different for tis time around? MAS still have a dear heart in many malaysian and to see it how it perform today definately a sad

 

When the Unions and association went to see the PM last February, do you think they put the hatred of TF as the reason why the CCF should be cancelled? It took them a long time to be able to see the PM and it is laughable to think that they would not have prepared properly for it.

 

Ask any staff of MH and you can can ask them how after more than 8 months they can see that the CCF only benefits one side. How convenient was it to have the head of Engineering, Finance and Sales to be ex-AK just when they have plenty of aircrafts due for heavy maintenance and looking to open new routes? Training department was almost lost too but for some last ditch effort to save it by Flight Operations and training.

 

As you mentioned, you are an outsider my friend.