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MAS and AirAsia Shares Swap

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It is a known fact that MH is unable to attract premium pax (e.g. FRA, ZRH, CDG, etc) for lack of daily frequency and limited regional network. To serve long haul daily and be profitable, smaller aircrafts like A332, 787 is idea. For regional that are over capacity for daily 734 (e.g. HDY, VTE, CEB, etc), combination of ERJ, CRJ, E-170, E-190 are needed. However, MH structure and mind set is inherited from 742, DC-10, A300, 732 and F27 era. Until MH can think out of the box, powerful unions are dismantled and the 1990’s business model is changed, it is hard to convince MH can change for the better.

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Perhaps we are now seeing real reason for the unholy haste in which MH's BKI hub was gotten rid of :)

 

...... Until MH can think out of the box, powerful unions are dismantled.......

 

Please don't blame the unions for seeing what is not reported in the mainstream news.

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It is a known fact that MH is unable to attract premium pax (e.g. FRA, ZRH, CDG, etc) for lack of daily frequency and limited regional network. To serve long haul daily and be profitable, smaller aircrafts like A332, 787 is idea. For regional that are over capacity for daily 734 (e.g. HDY, VTE, CEB, etc), combination of ERJ, CRJ, E-170, E-190 are needed. However, MH structure and mind set is inherited from 742, DC-10, A300, 732 and F27 era. Until MH can think out of the box, powerful unions are dismantled and the 1990’s business model is changed, it is hard to convince MH can change for the better.

 

Asians are not into SMALL thingy....

the bigger the better

 

*cough*

Edited by affendi osman

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Please don't blame the unions for seeing what is not reported in the mainstream news.

But why have the unions not made known what that has been seen but is not reported in the mainstream news ?

Perhaps keeping valuable bargaining chips close to one's chest ? :)

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But why have the unions not made known what that has been seen but is not reported in the mainstream news ?

Perhaps keeping valuable bargaining chips close to one's chest ? :)

If you have read some of the blogs, you may realise that the unions have quite a bit at stake. That is why they were so hostile to the share swap and re-structuring of MH. AJ has also said staff issues are "highly sensitive". So unless the management is brave enough to take very painful action (e.g. like what JAL did) to revamp and restructure, MH will never be able to solve their current and future problems.

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When the CEO of your fiercest rival, who proudly proclaims he runs his outfit without unions and employees are happy, is roped in to assist in restructuring/revival (well, that is the official version anyway) of this heavily bleeding, sickly dinosaur - you can be so very sure the union chiefs can sense that something major is at stake :D

And as I have alluded to already previously, the unions may have won the battle lately but the war is yet to be won (not likely till after GE13 anyway) :)

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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/

 

 

 

Given most MH cost is fixed, CASK can be reduced by increasing ASK. The next question is can MH fill all the additional seats?

 

From the last few years records, find most MH marketing and pricing people were ‘brought up’ in the pre-LCC period, still lock in “syok sendiri syndrome and in 1990’s” believing MH is the premium airline comparable if not better than SQ, don’t perceive EK, EY or TG as a threat, don’t realised other airlines e.g. BA, QF, GA, etc have moved on, failure to understand regular pax (other than GLC) need and slow to response to competition.

 

Believe MH need to headhunt from competitive industry like Telecom, consumers to head the marketing and commercial department.

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Ahmad Jauhari: Work as a team to turn around MAS

 

LONDON (July 5, 2012): With the controversial share-swap deal with AirAsia out of the way, there is now "no excuse" for Malaysia Airlines' (MAS) staff who were against it not to work with its management to turn around the national carrier, its group CEO Ahmad Jauhari Yahya said.

 

"Now they don't have any more excuses (for not putting their best efforts to turn MAS around). We have to work on what is needed to make a full recovery of the airline," he told Malaysian journalists after the inaugural Kuala Lumpur-London flight on its new Airbus A380 on Monday.

 

The MAS-AirAsia share swap was called off on May 2 amid heavy political and union pressure. Since then, two of its top executives namely deputy group CEO Mohammed Rashdan Yusof and CFO Rozman Omar, who came onboard after the share swap, had announced their resignation.

 

"The RM9 billion funding plan is only one part of the recovery. We are relooking at the utilisation of our assets, to make sure that we fully utilise them such as we try to fly (our aircraft) more per day and improve our work practices to increase productivity and efficiency," said Ahmad Jauhari.

 

"We have for example redeployed some cabin crew to help out in MAS Golden Lounge, while allowing them to fly one week per month," he added.

 

MAS had last month unveiled a fundraising exercise that includes a RM2.5 billion sukuk programme, commercial loans and government financial assistance to shore up its capital base. It needs to spend some RM6 billion this year to take delivery of 23 new aircraft as well as some RM415 million to pay off holders of its redeemable convertible preference shares, which mature on Oct 30.

 

On its talks with the Ministry of Finance Inc (MoF Inc) to sell and lease back its six new A380s and two new A330s from a special purpose vehicle (SPV) to be wholly-owned by MoF Inc, Ahmad Jauhari expects the deal to be finalised within two months.

 

Ahmad Jauhari also said the airline will hold discussions with the government to decide the fate of its remaining loss-making routes, but declined to disclose them.

 

"We do find challenges in making a profit on some routes. We have reduced 9% of our capacity (since last December) with the termination of some long-haul routes such as Rome, Buenos Aires and Dubai because they were not making money.

 

"MAS is a commercial entity and at the same time we have an obligation as a national carrier. It is quite a challenge to sometimes manage both," he said.

 

Meanwhile, MAS, which is gradually phasing out its ageing 747-400s and replacing them with the A380s, expects to complete the exercise by March next year.

 

"This year alone, we are retiring about 36 aircraft," said Ahmad Jauhari.

 

Source: http://www.thesundaily.my/news/425631

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MAS should get some peace and quiet

 

PLENTY maybe too much has been written and spoken about what it will take to turn around Malaysia Airlines (MAS). Just about everybody has views to offer. That comes with the territory when you're the national carrier.

 

So here's another unsolicited suggestion on what MAS needs so that it has a decent chance of getting back in shape: some peace and quiet.

 

Commercial aviation is going through tough times. According to the International Air Transport Association's global traffic results for May, released on Monday, the world's economic troubles are taking a toll.

 

Although passenger demand in May was 4.5% higher than a year ago, there was hardly any growth from the month before. Freight demand dropped almost 2% compared to May 2011. Between April and May this year, it slipped by 0.2%.

 

“The airline industry is fragile. Relief in oil prices provides some good news. Unfortunately, the softness in oil markets comes on the back of fears of deterioration in the European economy,” says the association's director general and CEO Tony Tyler.

 

“Business and consumer confidence are falling. And we are seeing the first signs of that in slowing demand and softer load factors. This does not bode well for industry profitability. Airlines are expected to return a US$3bil profit in 2012 on US$631bil in revenues. That's a razor-thin 0.5% margin.”

 

Yes, peace and quiet sounds like a luxury in such difficult industry conditions, but there are different degrees and types of peace and quiet.

 

MAS operates in a business that's sensitive to many fast-changing factors such as fuel prices, geo-political situations, weather, and consumer sentiments. The industry demands nimbleness, innovation and adaptability. An airline that freezes in the headlights will get mowed down.

But having some peace and quiet is not the same as keeping still.

 

When running a business, it's about being able to focus on primary goals and tasks without being distracted by lobbying, sniping, hostility and controversy.

 

When a company has to constantly deal with allegations and resistance, as MAS had in the past several months, the management find it almost impossible to simply get on with the work.

 

This is not to say that MAS is entitled to enjoy a moratorium on criticism; nobody, least of all a listed national carrier, should get that kind of immunity.

 

The thing is, the current leadership has not even had a full year at MAS.

 

Tan Sri Md Nor Md Yusof was appointed chairman on Aug 1 last year. This was followed by a boardroom revamp about a week later that included the resignation of seven directors and the appointment of four corporate personalities as independent directors.

 

On Sept 19, former Malakoff Bhd head Ahmad Jauhari Yahya became the airline's managing director.

 

Anybody who wishes MAS well or anybody neutral, for that matter should hope that the new management team prove they are indeed the right choices to take on the assignment of pulling the airline out of its slump.

 

Yet, the airline has been bothered by so much noise and rancour that there's no fair way to assess the performance of the MAS management.

 

The directors and executives who came on board last year must have spent a significant amount of time and effort addressing complaints and accusations instead of driving MAS forward.

 

In particular, the share swap between MAS and the founding members of AirAsia Bhd, and the collaboration between the two airlines, drew an astonishing amount of vitriol. Rarely has a business deal kicked up such a storm in Malaysia.

 

On May 2, the two companies announced the unwinding of the share swap.

 

However, that's apparently not the end of the discontent at the airline. Confidential passenger information on a flight has popped up on the Internet recently, and an internal circular purportedly issued by the management has also found its way into cyberspace.

 

Leaking passenger lists is unlawful and unethical. Yet another fire to fight.

 

The MAS leadership will have their first anniversary at the company soon. As they look back at the past 12 months, it may well be that much of their memories won't be of meeting head-on the challenge of making MAS a better airline. And if they decide to make a collective wish, they should consider asking for some peace and quiet.

 

>Executive editor Errol Oh believes peace and quiet is criminally underrated.

 

Source: http://biz.thestar.com.my/news/story.asp?file=/2012/7/7/business/11618870&sec=business

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OMG, Malcon Troops flying on AK now. And that's after MAS signing the contract with Mindef late 2011 for a two year extension.

 

Congratulations MAS, you new boys have no idea how hard it was to get this UNIFIL thing running. Now MH has given the contract to AK on a silver platter. MH wasn't even interested to do the HAJ but since AK doesn't have the right aircraft for it, it fell back to MH.

 

In the next few months there will be another big scandal that will surface affecting USD900million worth of the Rakyat's money. Wait and see.

 

In late 2007 MH won the East-West Movement because Air Asia was doing such a shabby job in the last 7 years. MAS followed the normal procurement procedure and bid via tender. After being awarded the contract, Mindef split or was told to split the contract 50-50 with AK. No reason to do since MH offers better service with hot food, reserved block seating and aerobridge facilities. At the same price as AK.

 

AK is definitely the preferred son.

 

I don't think the current MH management has a clue the "hows, why and what " of this contract.

Edited by Nik H.

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Some interesting read in Wee Choo Keong blog.

 

Most of the comments are rubbish, but look for one posted by a "GE Man" which seems to be quite credible.

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Some interesting read in Wee Choo Keong blog.

 

Most of the comments are rubbish, but look for one posted by a "GE Man" which seems to be quite credible.

 

Guess RM PM has granted AJ & gangs shoot first and talk later extensive executive powers. Bet the buffet list will get longer.

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AirAsia wants out

 

 

END OF COLLABORATION?: Low-cost carrier will seek to terminate all joint-venture agreements with Malaysia Airlines, says source

 

Low-cost carrier AirAsia Bhd wants to opt out of all joint-venture agreements with national carrier Malaysia Airlines (MAS), a source says.

 

AirAsia decided at a board meeting last week that it would seek to terminate its agreements with MAS soon, according to the source.

 

AirAsia group chief executive officer (CEO) Tan Sri Tony Fernandes said no comment when queried about the matter through text messages, while calls and text messages to AirAsia Malaysia

CEO Aireen Omar went unanswered.

 

MAS chief executive officer Ahmad Jauhari Yahya did not respond to a text message to him.

 

 

A termination of the memorandum of understandings (MOUs) between AirAsia Bhd and MAS would effectively wipe out the remnants of a deal between Khazanah Nasional Bhd and Tune Air Sdn Bhd that had gone awry.

 

In August 2011, Khazanah and Tune Air signed a deal to swap part of its holdings in MAS and AirAsia respectively, in a move to facilitate a collaboration between the two carriers.

 

In May 2 however, the deal was cancelled following an uproar by MAS employees.

 

A supplemental agreement between AirAsia and MAS instead took its place as part of a move to salvage its initial collaboration plans.

 

Two MOUs were signed on May 2 2012 whereby one was to focus on the setting-up of a joint venture company to provide aircraft component maintenance support and repair services.

 

Another was for the establishment of a special purpose vehicle by MAS, AirAsia and AirAsia X to improve value for money and to increase competitiveness through procurement synergies.

 

An analyst, who declined to be named, said the news of a possible cancellation of the joint ventures between MAS and AirAsia is not surprising.

 

He said MAS employees are reluctant to cooperate with AirAsia, so it would have been difficult for them to work together.

 

"The JVs would have benefited them both though," said the analyst.

 

The agreements between AirAsia and Malaysia allow for a termination by mutual agreement anytime within a six-month period from the date of the signing.

 

Such a termination however, will not release a lock up period of six months that disallows both parties from talking to, negotiating or cooperating with any other parties.

 

SOURCE: http://www.btimes.co...icle/index_html

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AirAsia ditches pact with MAS

 

KUALA LUMPUR, July 24 — Budget carrier AirAsia has stopped sending its planes for servicing at Malaysia Airlines (MAS) facilities since yesterday, effectively terminating all joint-venture agreements with the national airline, sources said.

 

Industry sources said Asia’s biggest low-cost carrier will resume sending all planes in its Airbus fleet to Singapore, citing safety fears with non-co-operation from MAS staff who scuttled an earlier share-swap deal.

 

“AirAsia has already stopped sending its aircraft from yesterday because there is no co-operation from MAS staffers,” a source told The Malaysian Insider.

 

The Malaysian Insider understands that MAS employees are upset with the attractive fees given to AirAsia as their charges are among the lowest in the region.

 

“This is a blow for MAS as it could do with the extra business, no matter the fees,” another source said.

 

But, he said, the move seemed inevitable since both airlines unravelled their share swap last May.

“This is inevitable considering the bad blood between both carriers. All AirAsia staff who joined MAS have left,” he added.

 

The Business Times today quoted a source as saying that AirAsia decided at a board meeting last week to terminate its agreements with the national airline.

 

But AirAsia group chief executive officer (CEO) Tan Sri Tony Fernandes declined comment when queried through text messages, while calls and text messages to AirAsia Malaysia CEO Aireen Omar went unanswered, the paper said.

 

It also said that MAS chief executive officer Ahmad Jauhari Yahya did not respond to a text message to him.

 

Terminating the memorandum of understandings (MoUs) between AirAsia and MAS would effectively wipe out the remnants of a deal dubbed the Comprehensive Collaborative Framework (CCF) between Khazanah Nasional Bhd and Tune Air Sdn Bhd signed on August 9, 2011.

 

In that cashless deal, state asset manager Khazanah and Fernandes’ Tune Air agreed to swap shares in MAS and AirAsia respectively, to facilitate a collaboration between the two carriers ahead of the ASEAN open skies policy.

 

But agitation by MAS employees and several politicians forced Putrajaya to cancel the deal last May 2.

 

However, both airlines agreed on a supplemental agreement to salvage the initial collaboration plans, with two MoUs to focus on the setting up of a joint-venture company to provide aircraft component maintenance support and repair services while another was to set up a special purpose vehicle by MAS, AirAsia and AirAsia X to improve value for money and to increase competitiveness through procurement synergies.

 

The agreements between AirAsia and MAS allow for a termination by mutual agreement anytime within a six-month period from the date of the signing although it will not release a lock-up period of six months that disallows both parties from talking to, negotiating or co-operating with any other parties, said the paper.

 

Source: http://www.themalaysianinsider.com/malaysia/article/airasia-ditches-pact-with-mas/

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Industry sources said Asia’s biggest low-cost carrier will resume sending all planes in its Airbus fleet to Singapore, citing safety fears with non-co-operation from MAS staff who scuttled an earlier share-swap deal.

 

“AirAsia has already stopped sending its aircraft from yesterday because there is no co-operation from MAS staffers,” a source told The Malaysian Insider.

 

This is slanderous if they don't have proof.

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So the poorly-thought-out CCF has done more harm than good, eventually?

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This is slanderous if they don't have proof.

 

Tough to prove fear. Maybe they recalled the vandalism done to MH aircraft some time back, allegedly by disgruntled staff.

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MAS is sick, so govt. prescribed the medicine for it. MAS employees and some politicians do not agree to the medicine prescribed. If the patient does not want to take the medicine, there is not much that can be done.

 

It is best that both MAS and AirAsia do their own thing so that all the negative stuff and bad feeling is removed. That way, both airlines can just focus on the tasks at hand rather than play poker games with each other.

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MAS is sick, so govt. prescribed the medicine for it.

 

By sending a stepfather who intend to kill it off slowly by taking away everything of value from the stepchild and give it to his own child?

 

(Read point 1, 2, 3, 4, 6, 9,10)

Edited by Radzi

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By sending a stepfather who intend to kill it off slowly by taking away everything of value from the stepchild and give it to his own child?

Yes, that view is largely from the perspective of the MAS employees.

 

Sometimes, treatment can be very unpleasant and may involve surgery, chemo and radio theraphy. The patient may not like that very much and it sometimes they think that the treatment may kill them. However, if the treatment regime is carried out properly, the patient will be cured.

 

Since all that is now academic, we shall have to wait for time to pass to see whether this patient will be able to recover from its serious illness using alternative medicine. :)

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