Government To Formulate National Aviation Policy - Najib

[BC Tam 2]

The sceptic in me thinks it's a pre-emptive manoeuvre to shield local players from full onslaught of upcoming liberalization of ASEAN skies

 

 

 

..... think talent development, jobs for our boys and girls,

Sigh

They'll need to address fundamentals causing brain drain issue first

(notice a few members here already 'drained' away )

Edited October 18, 2011 by BC Tam

[flee 5]

Well Singapore is still controlling our airspace. They should start with this first - train up more air traffic controllers and equip the CAAM with the latest navigation and air traffic control equipment. Then we can tell Singapore that we should take back control of our airspace.

[Cheng Long 0]

While we need competition, our market is small. So more competition might not mean lower fares or better service, if the airline operator is a small company with little resources.

 

Domestic market is small.. but just need to create new market, like Singapore.. They hardly have any domestic market by their own but now they are world beaters..

 

Air Asia likes to talk about competition but when things don't favour them, they said competition is a waste of resources..

[flee 5]

Air Asia likes to talk about competition but when things don't favour them, they said competition is a waste of resources..

Not sure if it is them or Khazanah who said that it is a waste of resources. I hear it being mentioned in parliament too.

 

However, for MH and AK to compete head on is a waste of resources because one is a legacy carrier and the other is a LCC. It will force both carriers to lose focus on their respective businesses. I don't think AK has any problems with the idea of competing with other LCCs like JetStar, Tiger, etc.

 

Even Boeing and Airbus do not compete head on. Note that the B777/787 and A330/A350 offers something different to airlines. Competing head on would probably mean both will go bankrupt, much like the way Lockheed and McDonnell Douglas did with their L-1011 and DC-10.

 

Anyway, lets see what the boys in Putrajaya comes up with.

Edited October 18, 2011 by flee

[BC Tam 2]

Anyway, lets see what the boys in Putrajaya comes up with.

If recent events are considered, probably something that is drafted by the red corner

[reezal 0]

We need another alternative and wish Lion/Berjaya the best

 

 

Speak too soon. Unfortunately, i found this article and it seems the proposed JV between Berjaya and Lion Air has been terminated. I believe this is the second failed attempt by Lion Air to penetrate the Malaysian Aviation market. The first attempt was 'Lion Air Langkawi' a few years back. Pretty sad, thought berjaya Lion Air would give AirAsia a run for their money!

 

 

Lion Air & Malaysia Berjaya Air terminate Joint Venture agreement

 

 

Berjaya Land Berhad (B-Land) announces today that the joint venture (JV) agreement with PT Lion Mentari has been terminated as both parties could not finalized

 

the terms of the shareholders’ agreement and other related arrangements.

 

The termination will not have any effect on the consolidated earnings and net assets of B-Land for the current financial year ending 30 April 2012.

 

B-Sdn Bhd, a subsidiary of Berjaya Land has on June 6 entered into joint venture agreement with PT.Lion Air Mentari, the parent company of Indonesia's largest private carrier and Asia's first hybrid low-cost airline Lion Air to jointly operate, manage, and develop the business operations of Berjaya Air Sdn Bhd, a charter and schedule flight operator company on a 51:49 equity basis.

 

B-Air was incorporated in Malaysia. B-Air has an issued and paid up share capital of RM100 million and is principally involved in the provision of aviation services.

 

Lion Air meanwhile, is the largest airline in Indonesia with 78 aircrafts and has another 134 units of Boeing 737-900ER in firm orders.

 

Also Lion Air is the launch customer for the Boeing 737-900ER and the largest customer and operator of the Boeing 737-900ER in the world. The airline took delivery of its 50th Boeing Next-Generation in September.

 

The Lion Air Group operates an extensive route network in Indonesia with 488 daily flights across 71 destinations. Lion Air has 49 Boeing 737-900ERs in its fleet today, with an additional 178 slated for delivery (The IndonesiaToday/AviationCare)

[dean hizudy 0]

Doesnt mean when Lion Air's joint venture with Berjaya Air failed, they cancel their plan to operate in Malaysia,no?

[N Azman 0]

Asian Composites Manufacturing Sdn Bhd, Composites Technology Research Malaysia Sdn Bhd, etc are already located in free trade zone, granted tax free holiday, etc, and MH is exempted from import duty and tax.

 

Given national policy implemented by the gomen for car, steel, rice, etc; tax incentives and grants may be available to the privileges few but also mean approval permits (AP) likely be needed for the whole supply chain. By forcing out existing suppliers and restricting supply, rent seekers will force consumers to pay higher price in the long run.

 

Believe Berjaya/Lion Air will be the test case and indicator for this national policy.

 

ACM and CTRM are mere tier 3 manufacturers/assemblers la macha. Must have vision la a bit bro. We must not be happy enough with jaguh kampung and bring in the tech and money! we want tier 2, tier 1, and to do that we need a clear policy that allows for incentives/grants/taxbreaks etc that can attact OEMs and tiers 2 above.

 

Re car industry. I think its slightly irrelevant, as malaysian aero industry vs the world is 100x BACKWARDS compared to automotive industry here. Imagine la, we only do screws and panels for an aircraft. None of the major OEMs are here except some MRO players. Automotive, we're almost fully capable now. We're far from the best, but then protectionism and monopolistic behaviour belongs in a separate topic altogether. Im not saying its right, but for aviation, lets grow it first! now!

 

From your public eye, you may not have the visibility on many OEMs and major companies that have approached msia in the last 2 years, but end up disappointed by lack of a clear policy. Everything must follow 'who you kenal' and then there's some buggers who will place themselves as the middle man for $$$. In contrast, singapore (our main enemy for aviation industry growth) is absolutely quick and decisive on this. and i tell you, in negotiations, damn malu wey to the big boys.

 

We need it and we need it now! think positive!

[KC Sim 2]

Actually Malaysia seems to be already quite a strong player in the area of composite material for the aviation industry. ACM and CTRM are names that have often been mentioned (among the aviation media fraternity) and I am quite certain their status may not be as low as suggested. If they are indeed as modest as suggested, it could only mean that they have the potential to be prominently if sufficient funds and efforts are channelled into research and development.

 

KC Sim

Edited October 21, 2011 by KC Sim

[N Azman 0]

Actually Malaysia seems to be already quite a strong player in the area of composite material for the aviation industry. Perhaps someone has the details.

 

KC Sim

 

That statement is quite misleading...but acknowledged.

 

We have the capability, but we're severely limited by job scope. We are only awarded tier 3 packages and we do not invest to go up tier. We also, do not bring in any tier 1 or 2 packages in. And what about composites repair? 787/350 will have 60+% composites content, and we dont even have a proper repair setup here for the MROs.

 

Think of a car. If you only manufacture brake lights, and be the "Regional Leader of Manufacturing Brake Lights from Advanced LED Tech", you're still the buggers only making brake lights.

 

That's EXACTLY the case for composites manufacturing in this country. We are good, no doubt about it. But need to expand and do more! Last i checked, we manufacture about 30 panels the size of a primary school table top for the A320/A380, and some parts here and there for the A400M. Basically same packages here n there also for the 787/350 now being development. Still brake lights.

 

No engine, no control systems, hyd, pneumatics, interior, avionics, etc. As a country with our LOW labor cost base, its an extremely low hanging fruit.

[flee 5]

Don't think it is just about investment. It is also about human capital. Our universities are not churning out the engineers needed for the aerospace industry. It will take some time if they want to move up the supply chain - they not only need to invest in the hardware, they also need to train up the people.

 

So, in this respect, a policy that coordinates the educational sector to provide the manpower for the aviation and aeronautical industries would be highly desirable.

[KK Lee 5]

ACM and CTRM are mere tier 3 manufacturers/assemblers la macha. Must have vision la a bit bro. We must not be happy enough with jaguh kampung and bring in the tech and money! we want tier 2, tier 1, and to do that we need a clear policy that allows for incentives/grants/taxbreaks etc that can attact OEMs and tiers 2 above.

 

ACM and CTRM are located in free trade zone, having tax free holiday, etc. What else can MIDA offer?

 

Re car industry. I think its slightly irrelevant, as malaysian aero industry vs the world is 100x BACKWARDS compared to automotive industry here. Imagine la, we only do screws and panels for an aircraft. None of the major OEMs are here except some MRO players. Automotive, we're almost fully capable now. We're far from the best, but then protectionism and monopolistic behaviour belongs in a separate topic altogether. Im not saying its right, but for aviation, lets grow it first! now!

 

Almost fully capable in automotive?

 

Given the gomen track record, protectionism and monopolistic go hand in hand with national policy.

 

From your public eye, you may not have the visibility on many OEMs and major companies that have approached msia in the last 2 years, but end up disappointed by lack of a clear policy. Everything must follow 'who you kenal' and then there's some buggers who will place themselves as the middle man for $$$. In contrast, singapore (our main enemy for aviation industry growth) is absolutely quick and decisive on this. and i tell you, in negotiations, damn malu wey to the big boys.

 

With national policy in place, relevant ministries is unlikely to move quicker or transparent with the process but add further barriers.

 

No engine, no control systems, hyd, pneumatics, interior, avionics, etc. As a country with our LOW labor cost base, its an extremely low hanging fruit.

 

Labour is probably less than 5% of the total cost. What else Malaysia can offer that is better than other countries? Approval permits, quota system?

 

Boeing and Airbus purchase components from ACM and CTRM is an offset for MH, AK and RMAF buying their aircraft. Without large order, further offset is unlikely.

Edited October 21, 2011 by KK Lee

[N Azman 0]

ACM and CTRM are located in free trade zone, having tax free holiday, etc. What else can MIDA offer?

 

 

 

Almost fully capable in automotive?

 

Given the gomen track record, protectionism and monopolistic go hand in hand with national policy.

 

 

 

With national policy in place, relevant ministries is unlikely to move quicker or transparent with the process but add further barriers.

 

 

 

Labour is probably less than 5% of the total cost. What else Malaysia can offer that is better than other countries? Approval permits, quota system?

 

Boeing and Airbus purchase components from ACM and CTRM is an offset for MH, AK and RMAF buying their aircraft. Without large order, further offset is unlikely.

 

1) stop looking at just ctrm and acm bro. think bigger my friend. the world dont revolve around current malaysian limitations. what else can be done? direct incentives, more tax free zones for near logistics hubs, training incentives, etc etc list goes on. the best thing we can do is to bring a major OEM in here doing tier 1 manufacturing, then we can develop MORE malaysian tier 2/3 companies that contribute to the supply chain. not just acm and ctrm. look forward bro!

 

2) yes. almost fully capable. no comment on monopolistic and protectionism. im working on moving forward in terms of policy. if everyone working on this keeps looking at past baggage, nothing will improve, as everything also tak boleh.

 

3) wrong. structure drives behaviour, and this applies everywhere. fix the structure, the behaviour follows suit. not saying there wont be barriers at all, im realistic. but we must work towards eliminating unpredictability and middle men lobbying. its baby steps, but all in the right direction.

 

4) this is why engineers never generalize. for ATEC related avionics diagnosis, its only 2%-5% human labor cost....but for airframe repair, labor cost can be as high up as 50% on certain schemes. for instance, equipments for detecting cracks and delamination within composite plies are still limited in terms of size and area covered. need massive amounts of man hours for something the size of the 787. 50% on a RM 1b a year business, now thats a lot of money.

 

APs/quotas? aiyoh. you got some grudge la buddy against the gov. start another thread bashing automotive policies la. not very relevant to aviation policy. I also want to buy a lexus for RM60k...

 

 

Boeing and Airbus purchase components from ACM and CTRM is an offset for MH, AK and RMAF buying their aircraft. Without large order, further offset is unlikely.

 

Not quite true. Many have come even without offset. many came, some have left, some still waiting. I won't name companies as im bound by NDA.

 

Think bigger bro. Aviation tech offsets may not necessarily come from aircraft purchases. hint hint. Think ANYTHING we may have procured from overseas....

 

And you think large order offsets are the only way of getting tech and work packages in?

 

Not quite bro its all about value proposition, and our country has got a LOT. have more faith bro, it aint so bad, we just have to make it better...

 

Don't think it is just about investment. It is also about human capital. Our universities are not churning out the engineers needed for the aerospace industry. It will take some time if they want to move up the supply chain - they not only need to invest in the hardware, they also need to train up the people.

 

So, in this respect, a policy that coordinates the educational sector to provide the manpower for the aviation and aeronautical industries would be highly desirable.

 

Spot on!

 

We actually have quantity today. about 100+ specialized aerospace engineers graduate from local unis every year. Quality is an issue tho, as unis here have enough expertise to teach theory, but industry is not giving exposure to these boys...both need to up their game. also, pay sucks in the aviation industry unless youre a pilot/LAE. so some good ones run to O&G, automotive, etc...

 

Quality is inconsistent. I've interviewed some gems, but also remember this one guy who didnt know what an empennage is. Aeronautical Engineering grad somemore...

[Rob 0]

Quality is inconsistent. I've interviewed some gems, but also remember this one guy who didnt know what an empennage is. Aeronautical Engineering grad somemore...

 

Probably slept through aeroplane anatomy 101

[KK Lee 5]

From your public eye, you may not have the visibility on many OEMs and major companies that have approached msia in the last 2 years, but end up disappointed by lack of a clear policy. Everything must follow 'who you kenal' and then there's some buggers who will place themselves as the middle man for $$$. In contrast, singapore (our main enemy for aviation industry growth) is absolutely quick and decisive on this. and i tell you, in negotiations, damn malu wey to the big boys.

 

With the exception of restricted, prohibited and national policy industries, MIDA/MITI normally grant license, permits, etc to genuine FDI without much hassle or many conditions. If middleman can asked $$$ for a project may mean the project is seeking funding (e.g. grant) from the gomen directly or indirectly e.g. Avcen jetpod?

 

APs/quotas? aiyoh. you got some grudge la buddy against the gov. start another thread bashing automotive policies la. not very relevant to aviation policy. I also want to buy a lexus for RM60k...

 

What about AP for steel, rice, cement, cabbage, etc?

Edited October 22, 2011 by KK Lee

[N Azman 0]

With the exception of restricted, prohibited and national policy industries, MIDA/MITI normally grant license, permits, etc to genuine FDI without much hassle or many conditions. If middleman can asked $$$ for a project may mean the project is seeking funding (e.g. grant) from the gomen directly or indirectly e.g. Avcen jetpod?

 

Many companies/projects ask funding/grants for infra/tech/training from gomen bro. name of the game. If im looking to invest in foreign country X, i would ask for everything short of furniture. To your statement "without much hassle".... uhh.... i take it you've never filed and managed an application for incentives from gomen agencies? looking to build a policy that will insert some KPIs targets and predictability in processing.

 

What about AP for steel, rice, cement, cabbage, etc?

 

What about it? OK. not automotive thread then. Maybe another thread called "gomen's monopolistic and restrictive behaviours"

[KK Lee 5]

Many companies/projects ask funding/grants for infra/tech/training from gomen bro. name of the game. If im looking to invest in foreign country X, i would ask for everything short of furniture. To your statement "without much hassle".... uhh.... i take it you've never filed and managed an application for incentives from gomen agencies? looking to build a policy that will insert some KPIs targets and predictability in processing.

 

As a taxpayer, we are happy if the gomen don’t take more from us.

[BC Tam 2]

As a taxpayer, we are happy if the gomen don’t take more from us.

As a taxpayer, I wouldn't mind paying if the current blatant displays of profligate wastes are done away with

Yeah, a separate thread would be appropriate though

[KK Lee 5]

Many companies/projects ask funding/grants for infra/tech/training from gomen bro. name of the game. If im looking to invest in foreign country X, i would ask for everything short of furniture. To your statement "without much hassle".... uhh.... i take it you've never filed and managed an application for incentives from gomen agencies? looking to build a policy that will insert some KPIs targets and predictability in processing.

 

In EU, creating employment is a gomen priority and entrepreneurs often given grant to create jobs in deprived areas. However, it is rare for GoM to give grant to FDI. If the industry is strategic or very profitable, it is more likely for GLC to take equity in the venture.

 

Traditionally, national policy is to protect ailing gomen investment or very profitable cronies, national policy almost certain will increase the entry barrier and making less attractive for FDI.

[N Azman 0]

As a taxpayer, we are happy if the gomen don’t take more from us.

 

i'm thinking about JFK's famous quote right about now.

 

In EU, creating employment is a gomen priority and entrepreneurs often given grant to create jobs in deprived areas. However, it is rare for GoM to give grant to FDI. If the industry is strategic or very profitable, it is more likely for GLC to take equity in the venture.

 

Traditionally, national policy is to protect ailing gomen investment or very profitable cronies, national policy almost certain will increase the entry barrier and making less attractive for FDI.

 

In EU, economic recovery doesnt necc mean FDI intake. Theyre mostly developed. In fact, they need to curb outsourcing! Very different from situation here. Creating employment is priority everywhere bro. But we want more, we want QUALITY employment through these industries.

 

Uhh, well i suppose you're entitled to take the negative view. Like how our lives are doomed under gomen, we'll never be able to buy expensive car/houses as only politicians and corrupt people do, gomen rapes our coffers, enriches the cronies, yada yada yada.

 

Just saying there's a lot of positives also to be gained from a well drawn policy. like what ive mentioned numerous times in previous posts.

 

Life aint perfect. for every major project maybe there will be some cronysm and corruption... but why focus on 1 enriched bugger, when 1,000 jobs and a new industry is born in our backyard? Seems awfully toxic and negative to me. cheers and happy diwali

[KK Lee 5]

In EU, economic recovery doesnt necc mean FDI intake. Theyre mostly developed. In fact, they need to curb outsourcing! Very different from situation here. Creating employment is priority everywhere bro. But we want more, we want QUALITY employment through these industries.

 

Uhh, well i suppose you're entitled to take the negative view. Like how our lives are doomed under gomen, we'll never be able to buy expensive car/houses as only politicians and corrupt people do, gomen rapes our coffers, enriches the cronies, yada yada yada.

 

Just saying there's a lot of positives also to be gained from a well drawn policy. like what ive mentioned numerous times in previous posts.

 

Life aint perfect. for every major project maybe there will be some cronysm and corruption... but why focus on 1 enriched bugger, when 1,000 jobs and a new industry is born in our backyard? Seems awfully toxic and negative to me. cheers and happy diwali

 

Year after year, Auditor General’s Report tells many well drawn policies are very often been abused or executed not as originally intended.

 

Few politicians and public servants have experience in, understand or personally responsible for success and failure of business, gomen involvement in business will only create inefficiency. Without cronysm and corruption, instead of enriched 1 bugger and 1,000 jobs, free and efficient enterprise may create multiple millionaires, 2,000 jobs and profitable tax paying companies.

 

Our lives are not doomed just that our competitors/neighbours are getting richer than us

[KK Lee 5]

Google's Eric Schmidt: Top 10 Reasons Bureaucrats Drive Me Nuts

 

1) “Lower Than Free?” “So we get hauled in front of the Congress for developing a product that’s free, that serves a billion people. Okay? I mean, I don’t know how to say it any clearer. I mean, it’s fine. It’s their job. But it’s not like we raised prices. We could lower prices from free to…lower than free? You see what I’m saying?”

 

2) ‘Regulation Prohibits Innovation.’ “And one of the consequences of regulation is regulation prohibits real innovation, because the regulation essentially defines a path to follow—which by definition has a bias to the current outcome, because it’s a path for the current outcome.”

 

3) The 9x Gap. “So I’m sitting at this dinner in 1995—Andy Grove was the CEO of Intel—and he gives this speech, and he says, “This is easy to understand. High tech runs three-times faster than normal businesses. And the government runs three-times slower than normal businesses. So we have a nine-times gap.” And I said, “Works for me.” But all of my experiences are consistent with Andy Grove’s observation.”

 

4) Don’t Slow Us Down. “And so what you want to do is you want to make sure that the government does not get in the way and slow things down. We’ve now all developed an ability to lobby about this stuff. We want the government [to understand] if you want to manage something, manage the outcome you want. Don’t specify the technology. Right? In other words, regulate this thing but don’t tell us how to make it technologically. Because if you do, you’ve locked in an incumbent

 

 

http://www.forbes.com/sites/sap/2011/10/26/googles-eric-schmidt-top-10-reasons-bureaucrats-drive-me-nuts-2/

Edited October 27, 2011 by KK Lee

[KK Lee 5]

The index published in Economic Freedom of the World measures the degree to which the policies and institutions of countries are supportive of economic freedom.

 

Nations that are economically free out-perform non-free nations in indicators of well-being

 

• Nations in the top quartile of economic freedom had an average per-capita GDP of $31,501 in 2009, compared to $4,545 for those nations in the bottom quartile, in constant 2005 international dollars (exhibit 1.9).

 

• Nations in the top quartile of economic freedom had an average growth in per-capita GDP between 1990 and 2009 of 3.07%, compared to 1.18% for those nations in the bottom quartile, in constant 2005 international dollars (exhibit 1.10).

 

• In the top quartile, the average income of the poorest 10% of the population was $8,735, compared to $1,061 for those in the bottom quartile, in constant 2005 international dollars (exhibit 1.12). Interestingly, the average income of the poorest 10% in the top quartile is almost double the overall income per capita in the bottom quartile ($4,545, exhibit 1.9): the poorest people in the most economically free countries are nearly twice as rich as the average people in the least free countries.

 

• Life expectancy is 79.4 years in the top quartile compared to 60.7 years in the bottom quartile (exhibit 1.13).

 

• The $1.25-per-day poverty rate is 2.7% in the top quartile compared to 41.5% in the bottom quartile (exhibit 1.17).

 

Malaysia was ranked 14 of 123 in 1995 but 78 of 141 in 2009

http://www.freetheworld.com/cgi-bin/freetheworld/getinfo.cgi

 

More from;

http://www.freetheworld.com/release.html

[N Azman 0]

Good articles KK. All well and nice. But the fully developed nations don't need help anymore, they need liberalisation. Not sure where u live but in Malaysia, we need to help encourage and boost local industries.

 

The development timeline goes like this :

 

Poor -> underdeveloped -> developing -> developed

 

'Poor' countries need basic help like energy and amenities. 'underdeveloped' needs basic economical structure. 'Developing' needs further investments and introduction of tech and efficiencies. 'Developed' has everything, and must be allowed to shine without shackles. Full liberalisation, full freedom for innovation - just like what your friend from google said above.

 

You need to figure out whats right, for the right time. All this perfect sounding article that makes us go googoogaga over idealistic measures like 'zero-corruption' is all well and nice. But sorry la, we're not there yet. NOWHERE near 'developed' for aviation. I for one don't want to wait till corruption index is zero before i develop anything.

 

For aviation, we're somewhere between underdeveloped -> developing.

[Mike P 0]

Malaysia is between developing and developed, or mostly called partial developed. our aim is to become a fully developed nation by 2020 as directed by Tun Dr. M... but it won't seem to materialise by now...