MAS and AirAsia Shares Swap

[KK Lee 5]

I for one would welcome a heated AGM - the auditorium is unbelievably cold!

 

(I know, lame joke )

 

To keep you warm, perhaps you could provide us with live coverage of AGM.

[flee 5]

With Khazanah owning 70% of the shares, what can minority shareholders do? Any resolution can be easily voted down, especially special resolutions.

[Mohd Suhaimi Fariz 2]

To keep you warm, perhaps you could provide us with live coverage of AGM.

 

I'm not going - work is more important!

[KK Lee 5]

I'm not going - work is more important!

 

 

Attending AGM could be one of work duty.

[flee 5]

MAS extends profitability deadline by one year

 

 

KUALA LUMPUR, June 21 — Malaysia Airlines has moved its original target to return to profitabilty to 2014 from the original target of 2013 said its CEO Ahmad Jauhari today.

 

The airline had posted larger than expected first quarter losses despite unveiling a business turnaround plan in December last year.

 

“We give ourselves till 2014 to return to profitability,” he said in a press conference here after the company AGM.

 

MAS posted a first quarter core net loss of RM347 million, or 87 per cent of the full-year consensus net loss forecast of RM401 million, prompting research houses to revise the airline's net losses for the year up dramatically to as much as RM858 million as compared with previous estimates of RM521 million.

 

Ahmad said that the airline will now focus on maximising revenue while implementing structural cost reductions.

 

Asked about the possibility of the departure of more key executives and its impact on the turnaround plan, the MAS CEO said that “people come and people go. If they go, we will have to find replacements.”

 

Asked whether AirAsia will be using MAS maintenance, repair and overhaul (MRO) services following the unwinding of the share swap agreement, Ahmad said that “we are ready to serve any customers.”

 

He also said that the original plan for the new A380 aircraft was to serve both London and Sydney and that the plan for now was to have the aircraft fly only to London but would relook at Sydney at a later date.

 

“The capacity might be too big for Sydney,” he said.

 

Ahmad also said that there were no immediate plans to revive Firefly's jet services which were terminated following the share swap with AirAsia but that MAS would consider having an intermediate cost airline like Singapore Airline's SilkAir.

 

“Firefly will concentrate on turbo-prop operations,” he said.

 

Ahmad declined to discuss job cut numbers, saying it was “sensitive” but that manpower costs will be dealt with.

 

He acknowleged that MAS had returned to its “original size” despite a separation scheme initiated a few years ago that reduced staff numbers by 3,000.

 

MAS currently has about 20,000 full time and 3,000 part time staff.

 

Ahmad said that MAS will “sweat” its assets to maximise utilisation.

 

“We want to utilise assets more,” he said. “On previous networks, utilisation was low.”

 

He added that the target was to reduce cost per available seat kilometer (CASK) by 20 per cent and increase revenue per available seat kilometer (RASK) by 10 per cent.

 

Source: http://www.themalays...ne-by-one-year/

[flee 5]

They are having second thoughts about putting the A380 on the KUL-SYD route. So I guess that the first two A380s will be used for KUL-LHR. Now, what other routes are they thinking of using the A380 for, if it is not going to be SYD?

 

As for MRO, TF has already said that AirAsia will not be using them.

[J Chong 0]

The answer is none - nobody got PAID RM3m.

 

if you look at the previous post with a picture,

 

3 exec directors were listed with a total remuneration for 2011

 

less than 500k = 1

501k to 1m = 1

2.5m to 3m = 1 . --> this was my question

 

Notice the very big jump from the first 2 exec directors and the final exec director... I am very curious about that. and "paid" includes Benefit in Kind...

[tktoh 0]

The 3 Exec Directors during the FYE 31/12/11 as follows:

CEO Tengku Azmil from 01/01/11 - 09/08/11

CEO Ahmad Jauhari from 19/09/11 - 31/12/11

Deputy CEO Mohd Rashdan from 01/01/11 - 31/12/11

 

Based on their position and length of service period, i suppose the big jump from 2nd range to top range of emolument is only because there are 2 CEOs serving about 3 months and 7 months respectively.

[KK Lee 5]

MAS might shed jobs in future to cut costs Aidila Razak

3:11PM Jun 21, 2012

 

 

Dogged by its biggest ever net loss of RM2.5 billion last year, Malaysia Airlines (MAS) plans to go on an aggressive revenue boosting campaign, while keeping an eye on cost.

 

According to group CEO Ahmad Jauhari Yahya, this would include possible job cuts down the line.

 

"Manpower cost is something we have to deal with right now. Long term, we have to address that, but immediately (the focus) is aircraft utilisation," he told reporters after MAS' annual general meeting at its training academy in Kelana Jaya, Selangor today.

 

He noted that MAS currently has about 20,000 permanent staff of which about three-quarters are 'non-flying' and will be less affected by any route cancellations in MAS' cost-cutting exercise.

 

He, however, declined to answer when asked of MAS' ideal staff strength, saying that it is a "sensitive question".

 

Interjecting on his behalf, MAS chairperson Md Nor Yusof (left in photo) said that what the management is trying to do now is to have a proper inventory of "what ought and what is".

 

"If we run a schedule, if its filled up or not, we have to maintain that schedule... there are possibilities that we are looking (at) and we can only move from one period to another.

 

"It's a live industry and something that happens in the Middle East today could mean cancelling routes there," he said.

 

No cuts yet, to avoid disruption

 

Ahmad Jauhari said that in the more immediate term, cost savings are to be made through putting the "most efficient aircraft in place" such as replacing the Boeing 777 with the Airbus A380 on some routes.

 

"We are (also) looking at flying the narrow bodies further as they are the most efficient of the fleet... We are immediately looking at the cost of aircraft maintenance," he said.

 

Ahmad Jauhari (left) added that the question of shrinking the workforce will also be dealt with at a later time as MAS is focusing on pushing its revenue by sweating its assets, including its workforce.

 

"What we plan to do is maximise... What we get from the current organisation - the revenue initiative - this is immediate. As we move on we have to refine that in terms of structure.

 

"We don't want too many disruptions right now when we have to push revenue," he said.

 

Asked on speculation that its chief financial officer Rozman Omar will follow the footsteps of recently resigned MAS deputy CEO Mohammed Rashdan Mohd Yusof, Ahmad Jauhari said an announcement will be made if there is movement among any key players.

 

MAS intends to cut its cost by 20 percent in the next three years, while pushing rental costs down a further 10 percent. It intends to turn a profit by 2014.

 

The national carrier posted a first quarter core net loss of RM347 million, forcing analysts to revise consensus net loss forecast for this year from RM521 million to RM858 million.

 

 

http://www.malaysiakini.com/news/201526

[Mohd Suhaimi Fariz 2]

Air France have announced they'll be cutting 5,000 jobs. Wonder how much will MH need to cut?

Edited June 21, 2012 by Mohd Suhaimi Fariz

[Radzi 2]

"We are (also) looking at flying the narrow bodies further as they are the most efficient of the fleet... We are immediately looking at the cost of aircraft maintenance," he said.

 

Bring it on.

[Isaac 0]

Ahmad Jauhari said that in the more immediate term, cost savings are to be made through putting the "most efficient aircraft in place" such as replacing the Boeing 777 with the Airbus A380 on some routes.

LOL. That's only if they manage to fill most of the seats on their 388, else the 777 might still be more profitable to fly and fit MAS better.

[T Azahan 1]

Rozman, Azhari Dahlan should leave and move to Jakarta.

 

Rohana, Wan Azmi and one or two independents should go too. They are smart but I do not see any value added. We need ones who are fairly knowledgeable in the industry to protect the interest of the minority. Ones must deserve the fees they get. Not merely by attending board meetings.

[Mohd Suhaimi Fariz 2]

Rozman, Azhari Dahlan should leave and move to Jakarta.

 

Rohana, Wan Azmi and one or two independents should go too. They are smart but I do not see any value added. We need ones who are fairly knowledgeable in the industry to protect the interest of the minority. Ones must deserve the fees they get. Not merely by attending board meetings.

 

There were rumours that Azhari & Rozman will be leaving to go to Jakarta. As for Wan Azmi - he's going out.

[jit 0]

LOL. That's only if they manage to fill most of the seats on their 388, else the 777 might still be more profitable to fly and fit MAS better.

 

Agreed. Wonder if they really understand the pros and cons of different aircraft types...

 

 

He added that the target was to reduce cost per available seat kilometer (CASK) by 20 per cent and increase revenue per available seat kilometer (RASK) by 10 per cent.

 

Source: http://www.themalays...ne-by-one-year/

 

 

Reduce CASK by 20%? Which means a CASK of about 20sen. That is about close to a LCC CASK. SQ and CX's CASK around 30sen.

 

Increase revenue RASK by 10%? That'll be around 20sen. SQ,CX,EK's RASK all above 30sen.

 

Would'nt it make more 'sens' to work harder to increase RASK by 30% and keeping CASK to within 10%?

 

Really makes me wonder if these bunch of guys know what they are talking about...

Edited June 22, 2012 by jit

[Mohd Suhaimi Fariz 2]

Reduce CASK by 20%? Which means a CASK of about 20sen. That is about close to a LCC CASK. SQ and CX's CASK around 30sen.

 

Increase revenue RASK by 10%? That'll be around 20sen. SQ,CX,EK's RASK all above 30sen.

 

Would'nt it make more 'sens' to work harder to increase RASK by 30% and keeping CASK to within 10%?

 

Really makes me wonder if these bunch of guys know what they are talking about...

 

MAS's CASK is already 24.5 sen according to The Star article

 

At a press conference after a MAS AGM yesterday, Jauhari said the airline's aim was to push up revenue per seat km by 10% from 18.5 sen as at end of last year, and trim cost per available seat km by 20% or about 5 sen from 24.8 sen.

 

In the short term, the aim is to break even.

[JuliusWong 0]

More cost cutting for hard products.......catering would be the first to be cut perhaps.....snack box for long haul!!!.....0.0

[Jeffery Lim 0]

More cost cutting for hard products.......catering would be the first to be cut perhaps.....snack box for long haul!!!.....0.0

 

That would be suicide for long haul... ...haha

[flee 5]

MAS unveils renewed plan which involves more cost cuts

 

PETALING JAYA: Malaysia Airlines (MAS) has come up with yet another business plan that focuses on more cost cuts and initiatives to “sweat” the airline's assets to maximise revenues. In addition, the airline's expected return to profitability has been postponed from next year to 2014.

 

The plan, which MAS group CEO Ahmad Jauhari Yahya refers to as the “renewed business plan”, was announced yesterday but had few details.

 

However, a major proposed change that did emerge apart from pushing back the projected return to profitability by a year is that the latest plan does not involve housing the regional operations in a new entity. This will ease the staff unhappiness over the proposed separation of the regional and long-haul operations as outlined in the December 2011 business plan.

 

This latest plan was necessary for MAS to chart its future direction because the previous plan was crafted for both MAS and AirAsia Bhd to work together following a share swap between their owners. The deal has since collapsed.

 

At a press conference after a MAS AGM yesterday, Jauhari said the airline's aim was to push up revenue per seat km by 10% from 18.5 sen as at end of last year, and trim cost per available seat km by 20% or about 5 sen from 24.8 sen.

 

To do that, several “initiatives would need to be executed in the next six months to a year via optimising all the assets, implementing structural cost reductions for sustainabilty and leveraging on work efficiency”.

 

“We just have to sweat our assets more as under the previous network utilisation plan, the usage was low of our narrow and wide body aircraft. We also plan to make changes to the work practices to be more efficient and to drive productivity levels up,” Jauhari said.

 

Capacity cuts are not on the cards but MAS chairman Tan Sri Md Nor Yusof said that to grow revenues, there would be a need to realign capacity to match opportunities especially that within the six-hour flying radius.

 

MAS would focus on growing its business in the region as this is where the growth is, and Md Nor added that “we have the right mix of aircraft types that will enable us to build a better orientation towards capitalising on the region, particularly for the short-haul routes”.

 

Jauhari added that to “sweat” the assets, the B737 aircraft's flying hours would be extended from the current nine to 11, and MAS will look into frequency increases for some of its destinations. He, however, did not elaborate.

 

“The adding of the A380 (the new Airbus plane) would further help boost our fleet efficiency,'' he said. However, he said the A380 would only be used for the London sector and not for the KL-Sydney route as the aircraft was too big for the Sydney sector.

 

He also said the airline had appointed Duncan Bureau as head of sales and the airline had to rev up sales to bring in revenues because there was a mismatch in its cost and sales due to the airline spending more than what it made. The airline reported its worst net loss of RM2.5bil for 2011.

 

“We give ourselves up to 2014 basically to return to profitability, a change from our earlier target by 2013,” Jauhari said.

 

On cost cuts, Jauhari added that every aspect of cost, be it aircraft usage, procurement, maintenance, etc, will be looked into as part of the three-year initiative to bring cost down.

 

MAS has a staff base of 20,477 as per its 2011 annual report. When asked if there would be job cuts, he declined to address it, saying it was a sensitive matter but manpower costs would be dealt with.

 

Asked if there were plans to revive Firefly's jet operations, he said Firefly would concentrate on turboprops and maximise on point-to-point traffic.

 

To a question if MAS would set up low-cost airline or revive Firefly's jet operations for that purpose, he said “we are not closing our doors to (setting up a) new LCC model but we are not looking at it now. Our immediate focus is revenue growth.”

 

To a question if AirAsia will be using MAS maintenance, repair and overhaul (MRO) services following the collapse of the share swap agreement, Jauhari said that “we are ready to serve any customer.”

 

At the AGM yesterday, all the directors seeking election were voted in but Tan Sri Wan Azmi Wan Hamzah did not seek re-election as director.

 

Source: http://biz.thestar.com.my/news/story.asp?file=/2012/6/22/business/11529113&sec=business

[BC Tam 2]

“The adding of the A380 (the new Airbus plane) would further help boost our fleet efficiency,'' he said. However, he said the A380 would only be used for the London sector and not for the KL-Sydney route as the aircraft was too big for the Sydney sector.

Would like to see what sort of efficiency can be sweated out from six dugongs used solely on one route

[flee 5]

It makes me very worried - it looks like MH's top management does not know what to do with the A380's pull factor!

 

Doesn't AJ know that, so far, airlines that operate the A380 have actually increased their pax numbers (i.e. revenue). AJ is assuming that KUL-SYD demand will remain static, even if the A380 is deployed. Surely, that assumption is flawed. MH may have missed a marketing opportunity with the introduction of the A380!

[Yang Zulhilmi 0]

if MH wont send A380 to SYD, then what is the purpose to join oneworld?

 

i thought they gonna codeshare with BA,QF to fill up the dugong's.haiya..MH is really makan hati

[flee 5]

We shall see what happens when the third A380 arrives.

 

If MH wants to increase aircraft utilisation, it may want to deploy the A380 on genuine long haul routes - perhaps KUL-AMS and/or KUL-NRT-LAX. The A380's efficiency should get better as routes get longer.

[BC Tam 2]

This MH 380 flying to Sydney issue is getting ludicrous

First you have MH lobbying for AK-X to be denied rights into SYD, supposedly because the market is not big enough for MH's dugong and AK-X

Then came the share swap and AK-X was allowed in - everyone crooning about different market segments, growing demand and all that sort of hurrah

Now share swap has been snuffed out, SYD is not big enough for the dugong again

 

If ever one need evidence of shrunken balls at MAS ........

[Radzi 2]

MAS has a staff base of 20,477 as per its 2011 annual report.

 

While the number is large, the cost may not be so as MAS staff are mostly underpaid compared to similar positions in other airlines.