Ahmad Jauhari is New MAS Managing Director

[Ikman Ikreza 0]

Ahmad Jauhari Is New MAS Managing Director

 

KUALA LUMPUR, Sept 14 (Bernama) -- Malaysian Airline System Bhd has appointed corporate veteran, Ahmad Jauhari Yahya, as its Managing Director, effective Sept 19.

 

Mohammed Rashdan Mohd Yusof will remain as Executive Director reporting to the Managing Director, said the national carrier in an announcement to Bursa Malaysia today.

 

It said Ahmad Jauhari, 56, previously served as Managing Director of Malakoff Bhd (1994-2010), Malaysian Resources Corporation Bhd (1993) and Time Engineering Bhd (1992).

 

Source : http://www.bernama.com.my/bernama/v5/newsbusiness.php?id=613525

[Ikman Ikreza 0]

Congratulations to Mr Ahmad Jauhari, hopefully MAS will back to good track.

[Cheng Long 0]

We will see... I don't have much high hopes. As long as the underlying problem is still there, everything is just cosmetic.. And the problem is gov interference and corruption.

[alberttky 0]

I think he'll stay for less than 1 year.

[Ikman Ikreza 0]

We will see... I don't have much high hopes. As long as the underlying problem is still there, everything is just cosmetic.. And the problem is gov interference and corruption.

 

Agreed, but hope not comestic by AirAsia boss.

[Mike P 0]

I still think Idris Jala is the best candidate.

[Sulhan . 0]

yup it think so Idris Jala is the best candidate for MAS..

[Raymund Yeoh 1]

I don't know him personally but let's give him a shot n 6 months from now we can judge if he will be a saviour to MH or another TR to MH

 

I hope his history with the Powers that be will not be a baggage to him

 

 

[flee 5]

MALAYSIAN AIRLINE SYSTEM BHD's (MAS) load factor, or the occupancy rate of seats available, hit a record high of 84.3% in June, surpassing the 81.4% achieved in December last year.

Indeed, the national carrier beat even Singapore Airlines (SIA), which is widely regarded as the industry leader in the region, in this department.

Some quarters attribute MAS' growing load factor to the different flight path on which its managing director and group CEO Ahmad Jauhari is piloting the beleaguered airline.

"With AJ [Ahmad Jauhari], you can see that the load factor is the highest ever in MAS' history, outperforming even SIA.

"AJ's performance is on a par with the world's best and you have to give him credit for it because he is doing something right," says an industry insider.

It is worth noting that MAS achieved the highest load factor in its history in the second quarter ended June 30, which is a seasonally weak period.

MAS' 2Q2013 capacity grew 18.7% year on year while traffic increased 29.3%. This pushed the load factor to 80.4% for a y-o-y growth of 6.6%.

More impressively, MAS managed such a performance in both the international and domestic sectors.

Ahmad Jauhari's strategy has been to concentrate on filling the seats in the airplanes to at least cover the fixed costs incurred instead of focusing on yields. This is somewhat similar to what Tan Sri Tony Fernandes is doing to grow low-cost carrier AIRASIA BHD.

Ahmad Jauhari's approach is very different from that adopted by the airline's previous bosses. During Datuk Seri Idris Jala's time, for example, the plan was to reduce unit cost by 20% from 17.5 sen per available seat kilometre (ASK) and enhance revenue per ASK and yields to enable the airline to break

even despite a lower load factor of 60%.

Jala's successorTengku Datuk Azmil Zahruddin continued the strategy, working on lifting the yield of each seat made available.

Coming back to MAS' current high load factor, analysts say it comes at the expense of yield, which is expected to drop by at least 4.5% to 26.4 sen based on their estimates. They believe the airline has to enhance its route network with its fleet of new aircraft before it can start pushing for higher yields.

"It is a chicken-and-egg story. Before you can get yields, you must be popular first," observes an analyst.

Some analysts say MAS will still be in the red in the second quarter ended June 30 due to low yields, but they believe the national carrier is on track for a turnaround next year.

Maybank Investment Bank's Mohshin Aziz, for one, expects MAS to remain unprofitable, but says net loss will shrink substantially to RM34.6 million from RM349.24 million in the previous corresponding quarter in view of the higher load factor and lower fuel price of US$124.40 per barrel, which is almost 6% lower than in 2012.

Mohshin opines that MAS will be profitable in 2HFY2013 as it enters its seasonally strong quarters of 3Q and 4Q and benefits from lower operating costs from new aircraft induction.

The research house sees MAS posting a net loss of RM106.3 million in FY2013 ending Dec 31 and registering a net profit of RM392.9 million in FY2014.

It had recommended a "hold" on the stock after it lost as much as 23% two months ago, but has since upgraded it to a "buy". MAS closed at 30.5 sen last Thursday.

"We think this [the selling] is overdone. We forecast MAS will be profitable in 2H2013 and generate positive cash flow," says Mohshin in his latest report.

RHB Research also expects the higher load factor to mitigate losses in 2Q2013, although it did not provide specific numbers. It forecasts a net loss of RM248 million in FY2013 and a net profit of RM164 million in FY2014.

Will expansion bite back?

In its latest expansion drive, MAS has reinstated some routes and increased the frequency of flights on others.

Ahmad Jauhari had said in the past that the airline, which trimmed its network in the past two years, must grow again to stay relevant to the industry.

However, this reversal has raised concerns that MAS' expansion may backfire like in the past, given the gloomy macroeconomic climate.

When Tengku Azmil was at the helm from 2009 to 2011, he had admitted that the national carrier was expanding and gearing up for the expansion too quickly.

The International Air Transport Association, in its latest report, says there are signs of demand softening in Asia-Pacific, which is consistent with a fall in business confidence in the major Asian economies as well as a slowdown in trade growth, particularly in China.

Its latest Airline Business Confidence Index reports that 61.5% of respondents expect an improvement in demand, but only 30.8% expect better yields over the next 12 months.

In the past, LCCs such as AirAsia weathered economic slowdowns much better than their full-service peers as passengers switched to cheaper fares and corporations stopped flying their executives in business or first class.

Be that as it may, there is a lot MAS can do, especially with regard to its target to turn around next year. For one, it could reduce unit cost by 3% to 4%.

Based on its 1QFY2013 results, unit cost or cost per ASK stood at 25.3 sen, but revenue per ASK was 24.1 sen, resulting in operational losses for the airline.

An industry insider says MAS' new fleet will help reduce unit cost by 1% to 2%.It is worth noting that MAS will have the youngest planes in the region come 2015, following its fleet renewal programme that began more than two years ago.

"As for the rest, it has to be efficient in its overheads and make sure it gets the most out of its staff. It is a laborious process to ensure the entire department is cost-savvy and efficient, but it can be done."

MAS' recent move to hire part-time cabin crew suggests that while it is expanding, it is cautious on costs. The situation of flight attendants working on hourly wages is unprecedented at the national carrier, just like its new strategy to focus on the load factor rather than yields.

Granted, Ahmad Jauhari has his own way of steering MAS out of turbulence. But will filling the empty seats through lower fares work? Cost - a big challenge for Ahmad Jauhari - is certainly a key determinant.

This article first appeared in The Edge Malaysia Weekly, on August 05, 2013.

 

[KK Lee 5]

 

MALAYSIAN AIRLINE SYSTEM BHD's (MAS) load factor, or the occupancy rate of seats available, hit a record high of 84.3% in June, surpassing the 81.4% achieved in December last year.

 

Since MH fixed cost can't be reduced or trimmed, only chance for AJ to succeed is to make sure marginal revenue is staying ahead of marginal cost.

[flee 5]

RISING PRESSURE: Will MAS chief Ahmad Jauhari continue to lead as issues cloud national carrier?

Ahmad Jauhari Yahya’s position as the head honcho of Malaysian Airline System Bhd (MAS) looks uncertain as his contract expires soon.

His position as managing director and group chief executive officer came under pressure after the powerful MAS Employees

Union (Maseu) said it has lost confidence in his ability to run the national carrier.

Maseu president Alias Aziz told Business Times that it had written to the Prime Minister to appoint an internal candidate to helm the airline.

Minister in the Prime Minister’s Department and CEO of Performance Management Delivery Unit Datuk Seri Idris Jala’s recent statement that MAS should have been sold when he (Idris) was CEO has also added to the pressure.

When Idris Jala was CEO, MAS’ share price peaked at RM6.20. The stock now trades at below 50 sen. Yesterday, it fell one sen to close at 33 sen.

Ahmad Jauhari’s contract is believed to end next month. The engineer by training was appointed to spearhead MAS on September 14 2011.

It is a fact that Khazanah Nasional Bhd contracts for government-linked companies’ bosses come with a two-plus-one option.

As at press time, MAS officials were not able to deny or confirm Ahmad Jauhari’s contract term.

For Maybank Investment Bank Bhd (Maybank IB) analyst Mohshin Aziz, it does not matter who leads MAS, nor whether he is an internal or external candidate.

"The key is to find the best man for the job. The thing that matters most is whether the person is able to instil a sense of teamwork in the airline, increase employees' productivity level and ensure that services are on par with the world's best," he told Business Times yesterday.

A check on MAS' latest annual report shows a few likely internal candidates for the top post.

They include current acting director of finance and director of corporate services Mohd Sukri Husin, director of operations Captain Izham Ismail and director of customer services Datuk Mohd Salleh Ahmad Tabrani.

"There are good and qualified senior staff in MAS on the top management position already.

"Mohd Sukri, for example, has been with the airline for almost 30 years," Mohshin said.

Nevertheless, he feels that it is not a good idea to replace Ahmad Jauhari now as there is "no clear successor".

There will also be a lot of time wasted should a new CEO from outside is appointed and who may have to spend more time to learn MAS' business and culture, he added.

"MAS is heading in the right direction. There is proof that Ahmad Jauhari is doing something to save the ailing airline.

"Its performance in terms of products and services is getting better and there are improvements in its load factor which, at 81.3 per cent, is higher than Singapore Airlines," Mohshin noted.

Source: http://www.btimes.com.my/Current_News/BTIMES/articles/20130815235512/Article/index_html

 

[alberttky 0]

So looks like selecting MH CEO is not really a decision to be made by the Board. The mafia union have a bigger say.

[Mohd Suhaimi Fariz 2]

So looks like selecting MH CEO is not really a decision to be made by the Board. The mafia union have a bigger say.

Doubt it. It's nothing more than the union blowing hot air.

[flee 5]

So looks like selecting MH CEO is not really a decision to be made by the Board. The mafia union have a bigger say.

I think that Khazanah Nasional hasa big say, since they are the majority shareholder. The union just knows how to destroy the good things that MH has...

[Syukri 0]

The 84% load factor is great, but how did AJ do it? If its because cheap fares been given then it will hurt MAS margin.. I believe MAS overhead cost still remain high, only the fuel efficiency increase but staff number remains

[flee 5]

The 84% load factor is great, but how did AJ do it? If its because cheap fares been given then it will hurt MAS margin.. I believe MAS overhead cost still remain high, only the fuel efficiency increase but staff number remains

For MH, the high load factor will mean improved yields, provided that fixed costs does not increase as well.

 

Don't forget that since this year, it has also expanded capacity. So increased capacity and increased load factor at the same time is an achievement he can be happy with. SQ increased capacity this year too - but its load factor went south. So, it does look like MH was able to sell all its increased capacity and more...

Edited August 17, 2013 by flee

[JuliusWong 0]

I would say MH just exited the ICU and now has stabilised. I supposed MH is cutting its overhead cost indirect: some crews' contract have not been extended once it expires. And male crew gets the first chop, replaced by newer batch of female crew.

 

All in all, AJ has done a great job in stabilising the company so far.

[Syukri 0]

I would say MH just exited the ICU and now has stabilised. I supposed MH is cutting its overhead cost indirect: some crews' contract have not been extended once it expires. And male crew gets the first chop, replaced by newer batch of female crew.

 

All in all, AJ has done a great job in stabilising the company so far.

 

Agree with that. And about the cabin crew, someone told me that apparently now MAS got too many Male FS..

[Kar Yong Lim 0]

Agree with that. And about the cabin crew, someone told me that apparently now MAS got too many Male FS..

 

Yup - One recent domestic flight I took had 3 male cabin crew and 2 female cabin crew.

[JuliusWong 0]

Agree with that. And about the cabin crew, someone told me that apparently now MAS got too many Male FS..

 

 

Yup - One recent domestic flight I took had 3 male cabin crew and 2 female cabin crew.

Oh my, if so, MAS has more reasons to shed male crew, imagine the gender of cabin crew is lopsided towards male?? Over the past few months MAS has been hiring female crew most recently last month July. My girl friend was hired. (ps: am not gender bias)

[Lock SH 0]

AJ has done a great job but the political master is not ......... It is time to shed all the lobsided long term contract which involved cronies ......... Unfortunately, it will not happen !!! ........

 

 

[Mohd Suhaimi Fariz 2]

AJ has done a great job but the political master is not ......... It is time to shed all the lobsided long term contract which involved cronies ......... Unfortunately, it will not happen !!! ........

 

 

 

Which is why the union's claims of achieving profitability within 6 months by renegotiating these lopsided contracts is laughable! If AJ couldn't do it, what makes them think their candidate can?

[Cheng Long 0]

AJ has done a great job but the political master is not ......... It is time to shed all the lobsided long term contract which involved cronies ......... Unfortunately, it will not happen !!! ........

 

 

 

You are probably right.. The political cronies will stay, at least for awhile more..

 

We know Badawi has his hands in food catering for MH, I understand on a lopsided contract. Pakatan was supposed to be fighting against this abuses.. But then again, we heard none other than Nurul Izzah was supposed to launch Badawi's book "Awakening". Bedfellow now??

 

There is no permanent friend or foe in politic.. Just power and money..

[flee 5]

The book isn't Badawi's - it is just a commentary about his time in govt. as PM.

[Cheng Long 0]

The book isn't Badawi's - it is just a commentary about his time in govt. as PM.

 

Of course, it wasn't written by him personally. It was written by staunch supporters of Anwar Ibrahim.