MAS and AirAsia Shares Swap

[nrazmoor 0]

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.

 

 

Of course not it will be stupid for them if they did He's a politician.., of course he will listen. Btw, thats is why khazanah need to sell more GLC under their wings. Its not healhty at all for a company to see this kind of thing. If anything against your side.. go directly see the PM.

 

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.

 

its not fair to rule out him just because he's ex-AK. I dont think he stupid enough to give a free maintenance to AK or things like that (If that what ur meant). And of course there will be a sacrificial lamb for the cost cutting measures, they can still outsouce the training... not simply denied the staff training oppourtunity. You cannot expect everythings will be the same. they will be ppls affected by the decisions but if that what it takes how can u say no to it?? In the end you need to save the company as a whole and not to run it as a half-dead ones. Still.., im just an outsider who know nothing much about it

Will be interesting to see what is coming for mas.

 

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.

 

IMO, how can u see progress when everyting u plan being opposed in the first place?

[Radzi 2]

What is reported in the media could be very different than what is actually happening. Welcome to Malaysia......

 

 

IMO, how can u see progress when everyting u plan being opposed in the first place?

 

Or sit down and say nothing, until it was too late?

[kandiah k 0]

So what benefit does AK actually get from the share swap ? Many people are very determined that the share swap only benefits one side; i.e. AK. Anyone care to share ?

[Cheng Long 0]

IMO, how can u see progress when everyting u plan being opposed in the first place?

 

Well, not entirely true. We have seen the football club sponsorship went through. Also premium economy in A380 was scrapped. The red paint disappeared. Firefly jet all but gone. A couple of routes cut.

[flee 5]

Trading in MAS, AirAsia suspended Wednesday

 

KUALA LUMPUR: Trading in the securities of Malaysian Airline System Bhd and AirAsia Bhd was suspended from 9am to 5pm on Wednesday, which would be linked to the latest corporate development to unwind their share swap agreement.

 

Both airlines announced to Bursa Malaysia the suspension were for a material announcement.

 

The Star reported on Wednesday the airlines would forge ahead with their collaboration agreement by signing several MoUs to potentially set up joint ventures (JVs) for joint procurement, pilot training and aircraft maintenance and repair.

 

The news report also said this was expected to be announced on Wednesday, alongside a decision to unwind the share swap agreement between the two airlines.

 

Source: http://biz.thestar.c...02&sec=business

 

 

MAS, AirAsia to announce decision to unwind share swap deal today

 

PETALING JAYA: Malaysia Airlines (MAS) and AirAsia Bhd will forge ahead with their collaboration agreement by signing several MoUs to potentially set up joint ventures (JVs) for joint procurement, pilot training and aircraft maintenance and repair, reliable sources said. This is expected to be announced today, alongside a decision to unwind the share swap agreement between the two airlines.

 

These were some of the areas identified under the comprehensive collaboration framework (CCF) inked last August, which also saw the exchange of shares that led to Khazanah Nasional Bhd taking a 10% stake in AirAsia and Tune Air Sdn Bhd a 20.5% in MAS.

 

Under the CCF, MAS would concentrate on being a full-service premium carrier, while AirAsia would remain a regional low-cost airline and AirAsia X a medium- to long-haul low-cost airline.

 

This follows a string of abandoned proposals by MAS, including the ending of talks with Australian carrier Qantas to create a premium airline and discussions for a new short haul premium carrier.

 

The unwinding of the share swap also means that AirAsia chief Tan Sri Tony Fernandes and his partner Datuk Kamarudin Meranun will probably give up their board seats on MAS.

 

However, their collaboration remains intact on the basis that there is no reason why both airlines can't get into mutually beneficial collaborative agreements, which could save both airlines' money and reduce outflows of money from the country.

 

Both airlines had initially agreed to cooperate on areas such as aircraft purchasing, engineering, ground support services, cargo services, catering and training.

 

Sources told StarBiz they will announce today plans to establish a JV company to explore the potential of oursourcing their procurement activities to save on costly items including fuel and aircraft parts.

 

The second proposed JV will look into collaborating on pilot training and infrastructure, and the third on component, maintainence support and repair services.

 

Fernandes had previously said in September that the CCF could help create the largest hub in Asia for pilot training and maintenance, repair and overhaul services, giving Malaysia an edge over Singapore.

 

Quoting people with knowledge of the matter, Reuters also reported yesterday that shares of MAS will be suspended from trading today due to a “pending corporate announcement”.

 

Besides ending the long-standing and at times bitter rivalry between MAS and AirAsia, the original intent of the share swap was to strengthen both carriers in anticipation of the 2015 enforcement of Asean's open-skies policy, by which time all domestic air-travel restrictions in the 10-nation region would be lifted, paving the way for full competition.

 

MAS, which is undergoing its fourth turnaround attempt since the wide asset unbundling brokered by Bina Fikir Sdn Bhd in 2002, posted a record RM2.52bil net loss in its financial year 2011, weighed down by an uptick in fuel prices as well as non-cash provisions and impairments.

 

The latest turnaround plan, which was unveiled in December, outlined an aggressive 12% capacity cut - the largest in its history - and targets to achieve some RM1.18bil to RM1.51bil in cost savings and additional income to make the airline profitable by 2013.

 

The plan also aims to narrow MAS' losses to a base case RM165mil net loss this year.

 

The airline's next hurdle is to raise enough money to pay for the 23 aircraft it has ordered, for which the capital expenditure is RM6bil this year and RM3.5bil next year. Its cash in hand is only RM1.1bil.

 

MAS has about 30 days left to come up with a plan to boost cash reserves and funding capacity, and it has not ruled out the possibility of a cash call or selling of non-core assets to raise cash.

 

Source: http://biz.thestar.c...07&sec=business

Edited May 2, 2012 by flee

[Mohd Suhaimi Fariz 2]

Share swap may be off - but CCF remains, so the only advantage of this is that TF will not be able to get insider information about MH's operations & strategies anymore.

 

That's all.

[Ikman Ikreza 0]

Share swap may be off - but CCF remains, so the only advantage of this is that TF will not be able to get insider information about MH's operations & strategies anymore.

 

That's all.

 

It's victory for Malaysia Airlines and Malaysian.

[Ruiz Razy 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 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 )

 

I think you have missed a few key points in what a significant believes that it is one sided! I strongly believe that MH ( and unions) has had given the chance for TF but the following are some of the key actions that does not favour fairly towards MH :-

1 HND operations was given all out to D7; when all premium carriers are fighting for its slot considering that it is more premium demand than NRT. If AK group is genuine, D7 should have gave their HND slots for MH to operate daily from KUL and D7 should have taken a daily NRT slots. Furthermore the AK Japan Operations would be based in NRT. Wouldn't that be logically and cost effective.

2 Why Premium Economy was removed from 380? Globally, there's a growing trend for such market. Or were they trying to protect D7's premium cabins? FYI, CX & QF are enjoying good revenue including from this region.

3 Why FY jets were killed after a few months of operation. "Did not make money" is not a valid excuse as airlines do need a year or two to break even and make money. FY jets could have easily fit the shorthaul market to further support MH connectivity. Killing FY Jets is a clear mark of protecting AK's market.

4 If AK is serious in filling the shorthaul connectivity for MH; the interline connections should have been available ASAP.

5 As a consumer, we noticed all of the fares of MH/FY/AK have increased and somehow there were no longer that fair trade. Please do not argue premium/legacy/LCC as in some cases we do see Premium airlines such as MH/CX/SQ are cheaper than AK/3K

6 Transferring D7 pax. to MH for LON/PAR/BOM/CHC flights; was it a fair deal ? Plse don't argue "Market rate" as RM1 could also be a "Market rate"

7 We dont't see any significant improvements in service delivery and products on MH. We know it takes time for the hardware , but some of the softwares can be done fairly quickly. A good example , no improvements in "kids" giveaways, "kids menu, amenities ..etc.

[Mushrif A 3]

Also if some of you need reminding...didnt D7 get its AOC through the FAX charade? So, here we have another charade taking place....

[Naim 6]

A businessman can be as cunning as he wants, but not at the expense of a national institution sacred to every Malaysian's heart.

[Ruiz Razy 1]

Also if some of you need reminding...didnt D7 get its AOC through the FAX charade? So, here we have another charade taking place....

 

It's simply UNFORGIVEN ! ; I'm sure it hurts so much for Sarawakians and Sabahans.

[Naim 6]

MAS, AirAsia boards form SPV for procurement; undo share swap

 

http://www.themalaysianinsider.com/malaysia/article/mas-airasia-boards-form-spv-for-procurement-undo-share-swap/

[flee 5]

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

I am just providing some balance to this emotional discussion.

 

Many are quick to bash AK, but really they are supporters or staff of MH. They may have vested interests. I am looking at this from a wider perspective and with a view to the history of MH since 1972. I am also trying to peer into the future - 2015 and beyond. I believe that Khazanah is worried about the AFTA FTA and Open Skies policies that will be coming into effect then. That is why they divested Proton (it may burden taxpayers due to increased competition from 2015 onwards) and now, they may be looking to divest MH too. MH will be far more capital intensive than Proton. So it probably scares the hell out of the Khazanah people.

 

To me, TF and AK were asked to do national service by the PM. It is something they cannot say no to. When the share swap was announced in August 2011, my initial reaction was that the govt. has now got its grubby hands on AK. It will be the beginning of the end for them.

 

However, to their credit, they are now preparing for 2015 by trying to become an ASEAN airline. As such their risks are diversified whereas MH is all about Malaysia. If the share swap is abandoned today, it can only mean good news for AK. They can be free from govt. meddling in their business plans once again, MAHB permitting (of course!).

 

I am not so sure what will be MH's future. Perhaps another turnaround plan?

Edited May 2, 2012 by flee

[jit 0]

I am just providing some balance to this emotional discussion.

 

Many are quick to bash AK, but really they are supporters or staff of MH. They may have vested interests. I am looking at this from a wider perspective and with a view to the history of MH since 1972. I am also trying to peer into the future - 2015 and beyond. I believe that Khazanah is worried about the AFTA FTA and Open Skies policies that will be coming into effect then. That is why they divested Proton (it may burden taxpayers due to increased competition from 2015 onwards) and now, they may be looking to divest MH too. MH will be far more capital intensive than Proton. So it probably scares the hell out of the Khazanah people.

 

To me, TF and AK were asked to do national service by the PM. It is something they cannot say no to. When the share swap was announced in August 2011, my initial reaction was that the govt. has now got its grubby hands on AK. It will be the beginning of the end for them.

 

However, to their credit, they are now preparing for 2015 by trying to become an ASEAN airline. As such their risks are diversified whereas MH is all about Malaysia. If the share swap is abandoned today, it can only mean good news for AK. They can be free from govt. meddling in their business plans once again, MAHB permitting (of course!).

 

I am not so sure what will be MH's future. Perhaps another turnaround plan?

 

An interesting viewpoint.. I was also quite open to the CCF and could see enormous benefits to both airlines with the collaboration..

Unfortunately, the actions the last 10 months seems to benefit one party over the other.

 

TF coming in to save MH? Well, he had 10 months to prove himself, .. and after all that has happened I can only conclude that he's just a typical businessman with a lot of bull..

 

For those who still believe that TF was in MH to save MH.. well I rest my case!

[Ruiz Razy 1]

I am just providing some balance to this emotional discussion. Many are quick to bash AK, but really they are supporters or staff of MH. They may have vested interests. I am looking at this from a wider perspective and with a view to the history of MH since 1972. I am also trying to peer into the future - 2015 and beyond. I believe that Khazanah is worried about the AFTA FTA and Open Skies policies that will be coming into effect then. That is why they divested Proton (it may burden taxpayers due to increased competition from 2015 onwards) and now, they may be looking to divest MH too. MH will be far more capital intensive than Proton. So it probably scares the hell out of the Khazanah people. To me, TF and AK were asked to do national service by the PM. It is something they cannot say no to. When the share swap was announced in August 2011, my initial reaction was that the govt. has now got its grubby hands on AK. It will be the beginning of the end for them. However, to their credit, they are now preparing for 2015 by trying to become an ASEAN airline. As such their risks are diversified whereas MH is all about Malaysia. If the share swap is abandoned today, it can only mean good news for AK. They can be free from govt. meddling in their business plans once again, MAHB permitting (of course!). I am not so sure what will be MH's future. Perhaps another turnaround plan?

 

I'm not a staff of MH ! Don't use the 2015 open sky policy as an excuse. IMHO both MH and AK should be ready for that. What needs to be appreciated is the actions and what are being said in between the lines. A good and far sighted businessmen and politician should think in such manner before saying yes to what's on the table. Problems with MH now should easily be seen as a bi-product taken 3-5 years ago. As an example, one of MH problems now is shrinking connectivity and dated aircraft. Arrangements could easily be made for Lease - buy similar to Airbus offer for Eastern in 1980s.

 

First and foremost AK should be allowed allowed to "rollover" it's business model across ASEAN and FAR EAST as what is happening now.

 

As for MH , do allow them to collaborate only with the ones that are appropriate and truly complimentary to each other such as IAG or QF ( more so now if they are focussed for that ONEWorld) . Similarly in the case of Proton, VW would have been the better option for excellent track record of successfully transforming AUDI, SKODA, SEAT....etc. ( BTW i'm not a VW staff either)

 

As mentioned earlier, that 10 months have proved the imbalances of collaboration. Hey , look at HND slots!

 

In the end, i'm a Malaysian and I do want both to succeed and not one killing the other! Especially when the other is the National Carrier.

Edited May 2, 2012 by Ruiz Razy

[kandiah k 0]

MAS, AirAsia boards form SPV for procurement; undo share swap

 

http://www.themalays...ndo-share-swap/

 

 

Good job!!! This will benefit AK and the AirAsia group in general! As for MH and the rest of the Malaysians who believe that the share swap has been a big mistake, I think you all have a point. After all, our pride of the nation has only been brutally dashed by our own greed, our own people, oh well, let's just continue to loose MH in the process! There is no point discussing this now, the benefit of the aviation industry in Malaysia is again "terbantut" thanks to the mentality we have here. I believe there was hope to salvage the Malaysian aviation industry with the collaboration between MH and AK. Well, I agree to disagree.

[flee 5]

As for MH , do allow them to collaborate only with the ones that are appropriate and truly complimentary to each other such as IAG or QF ( more so now if they are focussed for that ONEWorld) . Similarly in the case of Proton, VW would have been the better option for excellent track record of successfully transforming AUDI, SKODA, SEAT....etc. ( BTW i'm not a VW staff either)

As with most Malaysian GLCs, govt. is never able to be humble and take 49% stake. Any surprise that MH can't work with QF? Same story as Proton and VW. If a company is supposed to transfer technology and know how to you (the beggar), do you expect them to cede control of their technology and know how to you?

 

They say that beggars can't be choosers. In this case, it would appear that the beggar is actually dictating the terms...

[BC Tam 2]

In this case, it would appear that the beggar is actually dictating the terms...

Er, no - 'beggar' is trying to dictate terms but nothing seem to be biting

Big brother probably also tried to muscle in at AK/D7 (of course a few carrots had to be dangled about for enticement) but you see the smart and fast thinking fella already shifting focus to where there is less danger of interferences

[Ruiz Razy 1]

As with most Malaysian GLCs, govt. is never able to be humble and take 49% stake. Any surprise that MH can't work with QF? Same story as Proton and VW. If a company is supposed to transfer technology and know how to you (the beggar), do you expect them to cede control of their technology and know how to you?

 

They say that beggars can't be choosers. In this case, it would appear that the beggar is actually dictating the terms...

 

FYI, back when MH was born in 1972; it was QF that provided the assistance to MH. It worked really well in setting the right foot and ground for MH. Of course back then the "Commonwealth" collaboration was stronger thn ASEAN.

 

IMHO, Transfer of Technology is becoming somehow embedded within the era of globalisation in todays world and to talk so much of pride in politics and nation these days may compromise one's global edge . BTW, in airline industry, i don't think there's that "Transfer of technology" , particularly in MH. However, in the case of Proton; it's a matter of surviving the global challenges and to be in a successful group would likely be an advantage.

[flee 5]

Share swap cancellation could dampen sentiment on MAS

 

PETALING JAYA (May 2, 2012): Malaysian Airline System Bhd (MAS), which has suspended its shares pending a material announcement, is expected to see investor sentiment on its stock negatively affected if the national carrier's share swap with AirAsia Bhd are cancelled, Kenanga Research said.

 

"We believe that the cancellation of the share swap deal will not bring any material impact to our (earnings) forecasts (on MAS and AirAsia). However, the sentiment on MAS will be negatively affected as the management is at stake of losing the value added contribution from AirAsia leader, that is, Tan Sri Tony Fernandes to turn around the operation of MAS," the research firm said in a report today.

 

"With fuel jet prices hovering above US$130 to US$140 per barrel, coupled with the low seasons in the first-quarter and second-quarter, MAS is likely to face a challenging time to turn around its earnings in the financial year ending Dec 31 2012 (FY12)," it added.

 

Kenanga Research reckons that a cancellation of the share swap will, however, less likely affect AirAsia's business fundamentals throughout FY12 and FY13 as compared with MAS.

 

"For AirAsia, there are more expectations and surprises in FY12 apart from its Comprehensive Collaboration Framework (CCF) with MAS, that is, the launch of Japan AirAsia and listing of Thai AirAsia and Indonesia AirAsia.

 

"At first glance, the share swap will only bring the additional benefits for AirAsia via maintenance and bulk purchasing," it said.

Trading in shares of MAS and AirAsia was suspended today pending a material announcement.

 

Speculation is rife that the national carrier's share swap with AirAsia, via Khazanah Nasional Bhd and Tune Air Sdn Bhd, will be cancelled.

 

Kenanga Research is neutral on this news, saying the CCF between MAS and AirAsia will likely continue even without the share swap exercise.

 

It is maintaining its "neutral" call on the aviation sector and keeping its "underperform" and "outperform" ratings for MAS at a target price of RM1.06 and AirAsia at a target price of RM4.06, respectively.

 

"We are opting for Malaysia Airports Holdings Bhd (MAHB) at a target price of RM6.50 as our top pick in the sector for now.

 

"We like AirAsia and MAHB due to their passenger growth prospect and stable recurring income. We believe that the new low-cost carrier terminal in Sepang (KLIA2) will benefit both the companies when it starts operation late next year," said Kenanga Research.

 

Source: http://www.thesundaily.my/news/366322

[Cheng Long 0]

Share swap may be off - but CCF remains, so the only advantage of this is that TF will not be able to get insider information about MH's operations & strategies anymore.

 

That's all.

 

But he will still have his eyes and ears via the ex-Air Asia men in MH now. Life will still be difficult for MH for a long time.

[Mohd Suhaimi Fariz 2]

But he will still have his eyes and ears via the ex-Air Asia men in MH now. Life will still be difficult for MH for a long time.

 

I'm sure they're bound by the agreements of their contact - if the management's sincere they should take action if they found out any info's passed to the Reds.

[BC Tam 2]

I wonder if this share swap unravelling thing is some sort of face saving measure made necessary by any anticipated obstacle(s) posed by anti-trust legislations ?

My understanding is that the proposed MH/AK entity would need to satisfy foreign anti-trust requirements (potentially exposed to much greater scrutiny, and more difficult to contain) on top of local laws (well ......)

Fodder for discussion

[Naim 6]

The way this discussion is going, the cows will never ever come home!

[flee 5]

On behalf of MAS, we wish to announce that the Company has today, 2 May 2012:

 

(i) entered into a Supplemental Agreement to vary the terms and scope of the Collaboration Agreement;

 

(ii) pursuant to the Supplemental Agreement, MAS has separately entered into memorandums of understanding in respect of the following:

 

(a) to jointly explore the setting up of the joint-venture company by MAS, AirAsia and AAX to provide aircraft component maintenance support and repair services; and

 

(

to establish the broad set of business principles for the proposed establishment of a special purpose vehicle by MAS, AirAsia and AAX to improve value for money and increase competitiveness and benefits to customers through procurement synergies by outsourcing to the SPV the procurement processes for identified goods and services in agreed categories; and

 

(iii) in view of the Termination of Share Swap, the Board of Directors of MAS has agreed to mutually terminate the Proposed Warrants Exchange and the warrants exchange agreement entered into between the Company and AirAsia on 21 October 2011.

 

Please refer to the attachment for further details.

http://announcements...nnouncement.pdf

 

In respect of the MAS raise RM3 billion Islamic bond, the Company is currently considering various funding options and will make the appropriate announcements once these funding plans are finalised.

 

 

What's Next For Malaysia Airlines And Airsia?

 

KUALA LUMPUR, May 2 (Bernama) -- Now that the share swap deal between Malaysia Airlines and AirAsia is off, what does the future hold for both the national premium service carrier and low-cost carrier?

 

The share swap deal was put together nine months ago as one of the many initiatives to help boost Malaysia Airlines, whose financial performance has lagged in the last two years or so.

 

But several months down the road, it has been discerned that the move has not gone down well with the majority of the 26,000 workforce at Malaysia Airlines.

 

The concern of the disgruntled employees is understandable: they just do not want Malaysia Airlines to be led by the nose and benefit the other party.

 

Now that they have been cut loose from a seemingly unpalatable partnership, they would have to roll up their sleeves and start helping the revival of Malaysia Airlines.

 

And they should heed the words of their group managing director Ahmad Jauhari Yahya as their clarion call: "It's about survival and winning back the customers again."

 

They would have to help him stem the losses at Malaysia Airlines and make the national carrier the preferred choice of many travellers.

 

For AirAsia, it has to stay competitive and ward off many other low-cost airlines snapping at its heels.

 

If it can keep its fares low, service levels high and yet roll in the money, it should continue to be a role model for other low-cost carriers.

 

Although the share swap deal is now history, both the national aviation champions can still collaborate.

 

They need not scuttle each other's businesses as they are in different business segments -- one in premium, the other low cost.

 

They can collaborate on a need basis on various fronts like joint procurement of parts and spares to give more bang to the buck, so to speak.

 

AirAsia can also overhaul its aircraft at Malaysia Airlines' maintenance, repair and overhaul facilities to save on foreign exchange outflows.

 

Upon hindsight, there are many areas where they can partner each other without having to cross-hold each other's shares or have boardroom representation.

 

In the final analysis, both Malaysia Airlines and AirAsia should know and should do what they do best -- filling up their aircraft with satisfied customers. They need to show "Malaysia Boleh".

Edited May 2, 2012 by flee