MAS and AirAsia Shares Swap

[Timothy 1]

Golden lounge manager Mohd Husaini Ariffin said the improvement included major renovation at the lounge, from May 9 to June 18, with the addition of new features such as sports bar, kids room and games room.

 

During the renovation, he said the airlines would place the business and first class customers in three alternative lounges.

 

The lounges are regional lounge at the main terminal for first class guests and China Airlines lounge and Malaysia Airport CIP lounge at mezzanine floor, satellite building for first class and business class guests.

 

1) The MAS lounge at the Satellite terminal already has a kids/games room. They used to have a p/s2 in there as well, so what is this new renovation supposed to bring?

2) Regional lounge will be designated only for First passengers? Would C ticket holders be turned away ?

3) What's Malaysia Airport CIP lounge ?

[Rob 0]

Commercially important person lounge? But does Malaysia Airport has one? Never heard of it.

[Mohd Azizul Ramli 2]

Review of the MAHB VIP Lounge by Miss P of SQTalk. http://www.sqtalk.com/forum/showthread.php?t=3522

[Naim 6]

See related news: http://www.malaysianwings.net/forum/index.php?showtopic=17806

[KK Lee 5]

Given powerful unions, management hands are tied on this side of GE, little changes is permitted (except those symbolically linked to AK and TF) and haemorrhaging is difficult to arrest. Delist MH won’t eliminate losses except most if not all bad news are swept under the carpet free from statutory disclosure and public scrutiny.

[Mohd Suhaimi Fariz 2]

Calls for volunteers to go on no-pay leave is already out.

[Mushrif A 3]

Review of the MAHB VIP Lounge by Miss P of SQTalk. http://www.sqtalk.co...read.php?t=3522

 

Not to be confused with the CIP lounge @satellite building.

 

This VIP lounge is at the MTB, usually used by royalty, etc.

[Radzi 2]

THE biggest fear the eight employees unions and associations at Malaysia Airlines have after rushing for two days to prepare a 48-page document outlining a plausible way they think could reverse the fortunes of the airline is that their effort will count for naught.

 

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

 

 

As I've said before, there are many things that is common knowledge by staff and insiders but never reported or reflected by the media, local or international.

Edited May 19, 2012 by Radzi

[jit 0]

quote

They also want the maintenance contract with AirAsia at US$33 an hour reviewed because the norm that MAS charges is US$46 per hour while the industry rate is US$80 to US$85 per hour.

 

 

Wow!!.. no wonder the staff are pissed!!... Billions of ringgit and millions of man hours were spent to built up MH's engineering facility over the last 50+ years, and someone just walks in and uses its facility and pays peanuts!!!

 

Well, looks like more of this one sided deal contracts are slowly leaking out!!

[Radzi 2]

Remember the "bawang putih bawang merah" P Ramlee era movie?

 

Woman marries the man, then does everything to help her own daughter by trying to kill off the step daughter.

[KK Lee 5]

The day the share swap was scrapped on May 2, the leaders of the unions and association were invited to contribute their ideas as to how they can help turn the airline around.

 

They had a preliminary chat with chairman Tan Sri Md Nor Yusof and CEO Ahmad Jauhari Yahya two days later and it was at this meeting that the unions/associations presented their recommendations that prompted Md Nor to invite them to engage with the board on May 5.

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

 

 

Opportunity for MH employee unions and associations to perform, to walk the talk.

[Cheng Long 0]

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

 

 

As I've said before, there are many things that is common knowledge by staff and insiders but never reported or reflected by the media, local or international.

 

It does not require miracles to turn around MAS, all it takes is sensible decisions and commonsense. The leaders must be brave to make those decisions.

[flee 5]

It does not require miracles to turn around MAS, all it takes is sensible decisions and commonsense. The leaders must be brave to make those decisions.

Easier said than done. What is common sense to you and me may not be common sense with those interfering politicians.

[Cheng Long 0]

Easier said than done. What is common sense to you and me may not be common sense with those interfering politicians.

 

That's true, it's easier said than done. That's why the management must have to courage to do so. The suggestions by the unions and MAS employees are not rocket science, they are just common sense stuff. But here, we have people with their own vested interests which complicates things, like eg. someone want only to pay peanuts for aircraft maintenance and etc etc.

[flee 5]

Well, the previous CEO of Petronas had courage and he took the company from being a national oil company to a world class, international Oil and Gas MNC. But his contract was not renewed because he was fiercely independent.

 

If the management of a profitable GLC like Petronas is not appreciated for making billions in profits, there is not much hope for a billion RM loss making company's management, is there?

[Josh T 0]

Well, the previous CEO of Petronas had courage and he took the company from being a national oil company to a world class, international Oil and Gas MNC. But his contract was not renewed because he was fiercely independent.

 

If the management of a profitable GLC like Petronas is not appreciated for making billions in profits, there is not much hope for a billion RM loss making company's management, is there?

How typical! With that kind of mentality, it's no wonder Malaysian companies play 2nd fiddle to the likes of Singapore and Hong Kong.

[Cheng Long 0]

Well, the previous CEO of Petronas had courage and he took the company from being a national oil company to a world class, international Oil and Gas MNC. But his contract was not renewed because he was fiercely independent.

 

If the management of a profitable GLC like Petronas is not appreciated for making billions in profits, there is not much hope for a billion RM loss making company's management, is there?

 

It's a systemic problem in Malaysia. People come into a company with their own agendas and vested interests. Most just want benefits for themselves. Whether the company is making profit or not is only part of the equation.

[jani 0]

Maybe OT, but the case with Petronas' CEO is not at all the same with MH. Lots go on behind the scenes....

[BC Tam 2]

So you reckon this MAS/Air Asia/Unions saga doesn't have its share of behind scene going on's ?!

[Lock SH 0]

Maybe OT, but the case with Petronas' CEO is not at all the same with MH. Lots go on behind the scenes....

 

The case might not be the same but the 'swindling & meddling' part are similar ....... Remember, POLITICIANS are the BOSS, others are just slaves ....... Sad but true ......

 

 

[reezal 0]

MAS unions: ‘Hear us out’

 

By B.K. SIDHU

bksidhu@thestar.com.my

 

 

 

THE biggest fear the eight employees unions and associations atMalaysia Airlines (MAS) have after rushing for two days to prepare a 48-page document outlining a plausible way they think could reverse the fortunes of the airline is that their effort will count for naught.

Their dismay is that the entire process would be just a display that the top management is willing to engage with the unions after the sensational unwinding of a share swap agreement between MAS andAirAsia.

They want their input to count in the process of turning the airline around and are pinning their hopes that the top team at MAS takes their views seriously in tweaking its business plan.

Where do you get a GLC employees fighting for the survival of the company they work for' It (top team) should get us involved in every aspect of the turnaround. Some of us have been with the airline for 20 years to 30 years and we can comprehend things better. Why are we not given a chance but consultants are hired and new people are parachuted into the airline to do our work.

There is a big enough pool of talented people that can help MAS turn the corner and we want to ensure things done correctly, transparently and professionally and any deal with the airline is not lopsided, says a source.

He went on to say that when Datuk Seri Idris Jala came in, the first thing he did in less than a month was to get us all inspired and harness the brains from within. He was no aviation expert but he knew how to get things done. He did not parachute consultants to do the job for him. Maybe, this management does not trust us or think we cannot do the job, it may be a trust and confidence issue.

Two weeks have also lapsed since the share swap forged in August last year was scrapped.

The unions were against the share swap because of several issues including the lack of clarity in details and lack of engagement with employees on the benefits of a share swap and collaboration and employees became jittery over job security and the direction the airline was taking.

Though the share swap is off, the collaboration with AirAsia remains in areas such as engineering, training and procurement.

Eight months and two weeks have lapsed and the question on many peoples lips is whats next'

We are wondering which business plan we are supposed to follow and it is almost mid year but we still dont even know what our KPI for the year is, said a source.

The 48-page dossier

The day the share swap was scrapped on May 2, the leaders of the unions and association were invited to contribute their ideas as to how they can help turn the airline around.

They had a preliminary chat with chairman Tan Sri Md Nor Yusof andCEO Ahmad Jauhari Yahya two days later and it was at this meeting that the unions/associations presented their recommendations that prompted Md Nor to invite them to engage with the board on May 5.

It was during this meeting with board members and the CEO that the unions/associations presented a 48 page document that outlined strategies that they felt can reverse MAS ill fortune. Now two weeks later they are still hoping for some acknowledgement that their proposals will resonate in some form or another.

To Md Nor, the Saturday meeting was a very engaging meeting with the board...certainly a pleasant ice breaking get together for some of us. I believe some of those present had a specific matter meeting with the CEO and I expect this will continue, says Md Nor.

He adds that the board is looking to enhancing internal inclusiveness and ownership in crafting and implementing company strategies without absolving its ultimate responsibly to providing direction for the company.

Since that meeting, Ahmad has been making his rounds between the different departments and offices in MAS. He has spent about four days meeting up with employees of the airline in the past week, soliciting their feedback. And almost the same answers that were recommended in the 48-page document were told to him, according to source.

Those in the know claim that a meeting with the chairman is being scheduled some time next week and it is at this meeting that the unions/associations hope they will get some answers on their proposals.

MAS is expected to release its results by the end of the month and it said to be furiously working on a funding plan. It needs the money to start paying for the aircraft it has ordered.

The capex this year could be well about RM6bil and for the next two years, the market is speculating MAS would need to raise RM3bil each year. The airline recently got a RM1.5bil bridging loan from CIMB and has about RM1bil in its coffers to take it through this year.

Crank up sales

One of the biggest problems cited in the 48-page document apart from the need to regain the trust of the staff is the need for MAS to crank up sales. The diagnosis is that what MAS earns now is not enough to support is expenses and no amount of cost cuts, be it staff or others, would solve the lack of income.

But MAS does not even had a head of sales to lead a team, how could it possibly fight its rivals such as Emirates, Singapore Airlines, Thai International, Garuda and even AirAsia' asks a source.

It is for this reason that the union/association has recommended that MAS appoint a head of sales as that position has been left vacant since the departure of Datuk Bernard Francis about a year ago. And the unions/association want to endorse the new appointment.

MAS revenue per available seat km is 20 sen while that of Singapore Airlines and Cathay Pacific is 31.8 sen and 32.3 sen respectively. MAS cost per available seat km is 26 sen and this needs to brought down to 20 sen.

The unions in the document, a copy was made available toStarBizWeek, also proposed that Dr Hugh Dunleavy be appointed commercial director to oversee the network, alliance, planning and sales and revenue management as to them, the position of the previous acting commercial head lapsed on April 15.

What the unions/associations also found alarming is the doing away of six global sales agents (GSA) and downsizing MAS regional offices. This to them is not the norm of full service carriers and is a strategy adopted by low cost carriers.

MAS, to cut cost, also wants to relocate its ticketing offices to airports which the unions/associations feel will drive passengers away.

Are we operating on a low-cost model, or are we a full service carrier' How can you ask the full fare paying passenger to go to the airport to buy his ticket' We need to be in strategic places and we need to be where our competitors are, not where LCCs offices are' Have we missed a point here' MAS has to review this strategy, says a source.

They also want the planned disbanding of GSAs unwound as they currently generate RM500mil in revenue for MAS a year.

They also called for all contracts with consultants be purged and named the 12 companies which includes Plane Consult, Accenture, HCL Axon,Bain & Co, IBM, Ernst & Young, TMI, Price Waterhouse Coopers, Chimera, Intervista, Landor and Vantage Point.

If you are talking about cutting cost, then purge the consultants first and only keep what is absolute necessary. Recognise the talent within, harness them and tap that experience. That has yet to be done, says a source.

He adds that the whole share swap episode has rattled the trust and confidence and many of the union/association members are wondering if the core team really knows the value of existing employees as many consultants and new people were parachuted into the airline.

The unions are asking that key leadership positions currently held by CCF linked AirAsia people be replaced with MAS employees who have proven track records and that MAS adopt the internal staff first policy and the deputy CEOs post to be also an internal employee with cross functional knowledge of the companys operations and a peoples person.

The unions are still up in arms over the move of MAS headquarters to the KL International Airport from its existing base in Subang as they felt that will waste resources, though this project is said to have been deferred to July 2013.

They also want the re-branding for MAS be put on hold as to them an airline cannot have two brands.

The report also suggests that MAS keep its short and long haul operations under one entity and they also raised fears that ultimately there could be a plan to re-brand Firefly into a short haul carrier.

The unions also listed out 11 areas which they alleged leakages were taking place and want a fully independent body such as the MACC to investigate to improve the corporate image and public perception of the airline.

The controversial QPR sponsorship MAS also came in the crosshairs of the report which questioned the return on investment for MAS. They do not want the contract to be renewed.

The feedback

Even before they prepared the 48-page document, the unions/association got feedback from their staff and their thoughts were penned in six pages. The staff were against the spinning off and selling the airlines assets and business as that was the first thing they gave their feedback on.

They were concerned with the collaborative tie up with AirAsia especially with engineering as this department was a seen as an important income generator for MAS.

They also want the maintenance contract with AirAsia at US$33 an hour reviewed because the norm that MAS charges is US$46 per hour while the industry rate is US$80 to US$85 per hour.

Staff also wanted job rotation, and faster decision making. As it is there are 17 layers in the organisation which some find too cumbersome and bureaucratic and there is also redundancy in governance.

They also felt that MAS should have total control over all its functions and not contract out jobs which can be handled internally. It should adopt an open ticketing concept and do away with the no block seat allocation to travel agents.

All business decisions should be made in a transparent manner and we should stop renovating or entering into sponsorships if it does not justify the returns. There should be no room for abuse, wastages and we should put a stop to any corruption in procurement, tenders and contracts. There should be simplicity in buying tickets and checking in system should be made seamless for customers if MAS wants to compete against regional premium carriers, says a source.

No pay leave option

On Thursday, MAS sent out a circular to its employees offering an option for them to go on a no-pay leave of up to one year. This is the second time in recent times that MAS employees have been offered the option. The first was during Idriss time as MD of MAS and then about 300 people took up the option.

Will MAS get those numbers or more this time around' I doubt as people are worried about their jobs now. Until there is more clarity as to what the company direction is, many will hold on, says a source.

That is one way to bring the staff cost down but right-sizing is not something that will be taken lightly if it is not done in the right manner. But if you just want to slash 25% to 30% of the work force without a proper separation package, then it will not go down well with the employees, says a source.

 

SOURCE:http://biz.thestar.com.my/news/story.asp?file=/2012/5/19/business/11321502&sec=business

[Lock SH 0]

Anyone has got a copy/link to the 48 pages document handed over to MAS management?

 

Thanks

 

 

[jani 0]

The case might not be the same but the 'swindling & meddling' part are similar ....... Remember, POLITICIANS are the BOSS, others are just slaves ....... Sad but true ......

 

 

 

True.

[Mohd Azizul Ramli 2]

 

To cut costs, MAS offers staff 2 years’ unpaid leave

By Jahabar Sadiq

Editor

May 22, 2012

KUALA LUMPUR, May 22 — Malaysia Airlines (MAS) has offered a maximum of two years of unpaid leave to its Malaysia-based employees as the flag carrier works out strategies to cut costs and seek RM6 billion to fund a re-fleeting programme after losing RM2.52 billion last year and aborting a share swap with competitor AirAsia.

The Malaysian Insider has sighted an email dated May 18, 2012 from the MAS Human Capital division giving all staff up to June 30, 2012 to apply for the “Voluntary Leave Programme (VLP) 2012”. The programme is only for permanent MAS employees, excluding those in the MASWings division, MASWings Sdn Bhd and Firefly.

File photo of a MAS aircraft at the Kuala Lumpur International Airport in Sepang. MAS employees have been offered the option of unpaid leave for the second time in recent times.“As we all are aware, our Company is still in financial crisis despite many measures taken to combat all odds to contain costs. We are in a serious survival mode which immediately calls for strong measures on costs control and reduction initiatives.

“Given the current financial situation, the Company has decided to reactivate the Voluntary Leave Programme (VLP). This programme provides an opportunity for staff to take a break from employment for a certain period of time for personal reasons whilst still having the assurance of continued employment with Malaysia Airlines,” according to the email issued by Zahrah Zaid, the executive vice-president of human capital in MAS.

This is the second time in recent times that MAS employees have been offered the option of unpaid leave. The first was during Datuk Seri Idris Jala’s time as the airline’s managing director when about 300 people took up the option. Some 2,600 others were laid off under a Voluntary Separation Scheme (VSS) in 2005, funded by the Treasury.

In March, Singapore Airlines also offered no-pay leave to its pilots for as long as two years, just weeks after the carrier reported a 53 per cent drop in net profit during the last three month of 2011 compared to a year earlier. The carrier said that its growth had been slower than expected, resulting in a “surplus pilot situation”. It had said the pilots who opt for the scheme will be allowed to work for other carriers during the period.

French newspaper La Tribune reported yesterday that Air France plans to lay off between 2,500 and 3,000 of its employees by the middle of the summer, while Le Figaro said 5,000 employees out of a total 10,300 employed by the Air France-KLM group will be laid off by 2015.

For MAS, the current VLP will allow its employees to take either a minimum of 12 months or 24 months’ leave, according to the email, which also said the staff could also apply for further leave at the discretion of the airline.

“Staff will return and report for duty upon expiry of their VLP period. The Company will endeavour to assign the staff to his/her previous position subject to availability of the position or may be assigned to another position of the same grade/level within Malaysia Airlines Group at the discretion of Management,” the email said.

It also listed out a series of benefits for those applying for the VLP, including concessional travel, medical benefits and the flexibility to work in other organisations with the company’s approval.

“The VLP is applicable to all Malaysian-based permanent staff irrespective of years of service or age. It is absolutely voluntary and no one will be forced or coerced by anyone to apply for this programme,” according to the email.

It also said respective heads of department or division will have to recommend approval for the VLP but the final decision will be made by the management after ensuring there will be no replacement or recruitment to fill the vacant post and that the vacancy will not affect business operations.

MAS has eight unions and associations representing slightly more than 20,000 employees, which is double the staff strength of AirAsia, Asia’s biggest budget carrier with an extensive fleet operating in Malaysia, Indonesia, Thailand, Japan and the Philippines.

The offer for no-pay leave came just two weeks after unions’ dissatisfaction aborted the MAS-AirAsia share swap just nine months after the deal was hailed as the best way to save the loss-making flag carrier, which has gone through at least two business turnaround plans in the past decade.

Sources had told The Malaysian Insider that Putrajaya’s insistence to ensure no job cuts in MAS before the next general election and workers unhappy with AirAsia executives managing the national carrier had all but made sure the pact would not take off successfully.

The unwinding of the share swap on May 2 saw MAS main shareholder Khazanah Nasional Berhad transfer its 10 per cent or 277,650,600 ordinary shares in AirAsia back to Tune Air Sdn Bhd, while Tune Air transferred its 20.5 per cent or 685,142,000 ordinary shares in MAS back to Khazanah. The reversal was a cashless deal and based on the same swap ratio of 2.05 based on the prices when the share swap was announced in August 2011, where MAS was valued at RM1.60 per share and AirAsia’s share at RM3.95.

MAS is expected to take delivery of its first of its six Airbus A380 next month after several years of delay in getting the world’s most advanced mega airplane. It is still taking delivery of more of the Airbus A330-300EX and the Boeing B737-800.

[Mohd Suhaimi Fariz 2]

In some good news - apparently the lopsided LSGB contract has been renegotiated so that MAS only needs to pay what's taken onboard.

 

MAS only to pay caterer what it takes for in-flight services

By B.K. SIDHU

 

PETALING JAYA: Malaysia Airlines (MAS) is said to have re-negotiated its catering contract after nine years where it will no longer pay a guaranteed monthly amount for catering services and only for what it takes from LSG Sky Chefs-Brahim's Sdn Bhd (LSGB) for its in-flight catering services.

 

It is learnt that renegotiations have been concluded recently by the new team at MAS and will help MAS to restructure its cost base.

The amount MAS used to pay as the guaranteed figure under the catering contract is not known, but the contract between LSGB and MAS has long come under fire for the exclusivity as well as the long-term nature of the deal.

 

LSGB, an inflight catering service provider, had in 2003 signed an agreement with MAS for the exclusive right to supply and provide inflight catering and cabin handling services to MAS at both the Penang airport and the KL International Airport in Sepang for 25 years.

 

“It is a significant development for the airline as it no longer needs to pay for catering services based on the minimum baseline revenue (MBR) a term used in the catering business and that burden is now removed.

 

“With good inventory planning it will only uplift what it needs and this whole exercise helps it cut wastage and hopefully it translates in reduced cost for the airline,'' said a source.

 

Another source said the contract was initially crafted to “include a guarantee amount because there was a need for certainty, and also for sustainability and profitability.”

 

During Brahim's Holdings Bhd's AGM recently, company officials side-stepped questions when asked if there was a renegotiation over the catering contract.

 

The official then said: “Just wait for the announcement, we are always open to working together with MAS and I can't say more. ”

 

The MBR removal will have an impact on LSGB's bottomline but the quantum is not known. As for Brahim's, the MAS contract accounts for about 80% of revenue. For 2011, Brahim's earned RM336mil in revenue, RM314mil in 2010 and RM294mil in 2009.

The company is also diversifying to boost its revenues by 2015 by banking on its new venture into sugar refining.

 

The renegotiation of contracts is part of the recovery plan as outlined in MAS December 2011 business plan.

 

In the plan, MAS said it was “acting on two key levers to reduce costs. First, we will renegotiate our procurement costs in catering, ground handling and maintenance ...”

 

MAS needs to bring down its cost as it is spending more than what it earns and the airline's revenue per seat km is 20 sen while its cost per seat km is 26 sen.

 

How much savings MAS will receive from renegotiating its catering contract is not known, but in its business plan MAS did say that “our base case target is for the core business (passenger airline without cargo, catering and other ancillary businesses) to generate a significantly reduced loss of approximately RM340mil in 2012.”

 

Besides the catering contract renegotiation, MAS has also made significant improvements on its customer service front and once it takes delivery of its flagship A380 aircraft, there will be a host of new initiativ es in a bid to push for higher sales, sources said.

MAS is expected to release its financial results for the first three months ended March 31, 2012 soon and analysts are expecting another quarter of losses to the tune to RM330mil.

 

The airline in 2011 reported a net loss of RM2.5bil and analysts expect MAS to only return to the black in 2013.

 

http://biz.thestar.c...6AAvuko.twitter

Edited May 22, 2012 by Mohd Suhaimi Fariz