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Mohd Suhaimi Fariz

MAS Privatisation

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Hmmm, I am not sure if MH's ME partner Qatar Airways will be too pleased with this arrangement if it does come true.........BA and CX pretty much deserted QF after the latter jumped onto the same bed with EK. oneworld might not want another member of ME Big 3 to be associated with them. Bad enough they've colossal EK now.

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Hmmm, I am not sure if MH's ME partner Qatar Airways will be too pleased with this arrangement if it does come true.........BA and CX pretty much deserted QF after the latter jumped onto the same bed with EK. oneworld might not want another member of ME Big 3 to be associated with them. Bad enough they've colossal EK now.

Somehow, I don't believe that the Malaysian govt's ego will allow for foreign majority stake in MAS.

 

I think a fudge is on the cards, and MAS will continue to struggle like they have after past turnaround plans...

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Hmmm, I am not sure if MH's ME partner Qatar Airways will be too pleased with this arrangement if it does come true.........BA and CX pretty much deserted QF after the latter jumped onto the same bed with EK. oneworld might not want another member of ME Big 3 to be associated with them. Bad enough they've colossal EK now.

 

Hoping for IAG to make their move as well :D

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Etihad appears to be on a path to acquire distressed aviation assets : Alitalia and now MAS.

 

Will Etihad do to MAS what Emirates did to Qantas?

 

KC Sim

 

 

http://centreforaviation.com/analysis/malaysia-airlines-considers-tie-up-with-etihad-as-restructuring-process-slowly-begins-172934

 

 

Many oneworld airlines are doing their own things anyway.

 

Hoping for IAG to make their move as well :D

 

Compared to IAG, EY is more likely to be allowed to have some stakes in MH.

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Divas in A.Net are pointing out MH as the perfect takeover object by Etihad Airways.

 

Aha, after a month, it finally materialised as an official news.

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Being taken over by EY is better than being fed to the AK group.

 

Who is IAG anyway?

Edited by Radzi

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Any particular reasons?

 

 

IAG is British airways and iberia

 

Plus. I don't see why IAG wants to meddle with the loss-making MH.

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IB is loss making but IAG still have a hand in it.

 

I think the problem here is not MH, but Malaysian government.

 

Etihad might be more attractive the government because of the Islamic connection.

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Unions worsen MAS woes

 

Azman Ujang
THINGS are looking very bad at Malaysia Airlines (MAS) and could worsen if its powerful employees' unions continue to take a hardline stand with their threats and demands.
Just as the airline needs everyone's support to solve its problems, the unions are sniping at the management from all corners.
Only its beleaguered chief executive officer Ahmad Jauhari Yahya is putting up a bold front expressing confidence that the national carrier will tide over its massive problems and could turn around within six months.
He has to do this although there seems to be not much basis for such expressions of confidence, at least not where conditions facing the airline are concerned.
The unions can make their demands and threaten to strike but this would be a case of winning the battle but losing the war, and with dire consequences.
What would the unions gain if they got what they wanted only to have MAS go under, asked the deputy chairman of the Public Accounts Committee, Dr Tan Seng Giaw.
Khazanah Nasional, the majority shareholder of MAS, has said it will require six to 12 months for yet another restructuring plan against the backdrop of a culture within the airline that is not conducive to competitive business.
It's not about the self-preservation of the unions we are talking about here but the nation and the airline's reputation that's at stake.
It's been 40 years but MAS has accumulated RM8 billion in debts while Singapore Airlines, which had split from MAS at that time, surges ahead.
And AirAsia, considered a newbie in the tough airline business, has surpassed MAS's performance by leaps and bounds, which raises the question as to whether any purpose is served by the government via Khazanah continuing to own MAS.
The unions and the airline don't see eye to eye but for the sake of the airline and the nation, there has to be a mid-way point because MAS's survival depends on it. And the result of discussions between both sides has to be compatible with industry standards.
MAS has been too dependent on government subsidies with Khazanah having already pumped RM5 billion of taxpayers' money, but as Khazanah managing director Tan Sri Azman Mokhtar admitted, nothing has changed.
And at least two cabinet ministers, Tourism and Culture Minister Datuk Seri Nazri Aziz and acting Transport Minister Datuk Seri Hishammuddin Hussein have said that the government is not in the mood to give any more subsidies to bail out MAS.
The nation and government want to see MAS succeed and this will require tough but fair decisions. And the unions should not expect 100% of their demands to be met.
On the possibility of a voluntary separation scheme to downsize MAS, it needs to be fair to the employees and they should not be exploited because it's not their fault that MAS is over-staffed.
The unions serving MAS employees are no strangers to strikes even if such actions were detrimental to the airline's brand and reputation.
MAS Employees Union Peninsular Malaysia (Maseau), recently threatened to strike if its demand for the removal of key management executives and for the government to intervene are not met. Its demands will be listed in a memorandum to Prime Minister Datuk Seri Najib Razak.
Last year, during the peak travel period in December, the National Union of Flight Attendants of Malaysia (Nufam) also threatened to strike. This created a lot of inconvenience for passengers, including added anxiety over possible flight cancellations and delays.
The strike was planned by the union in protest against the punishment meted out to seven of its members and the firing of its president. Some 50% of the cabin crew in MAS are represented by Nufam.
And in 2011 and 2012, the unions had also protested against a merger between MAS and AirAsia, a move that would have saved MAS from flying into further turbulence that we are seeing today.
It was a move welcomed by most who understand how tough and even "brutal" the industry could be but not by the employees. Curiously, the union leaders were worried that AirAsia would stand to gain more than MAS from the merger.
Maseau president Alias Aziz was reported to have said that MAS's 20,000 workers were afraid that AirAsia would make sweeping cost cuts and slash thousands of jobs and union chiefs threatened strike action to undo the share swap.
They did this by courting politicians, taking advantage of the looming general election and they succeeded. The merger was called off without even being given a chance to see the light of day.
On hindsight, many in the industry think that unravelling the share swap by the government was a costly mistake.
RHB Research said the best-case scenario for MAS is to maintain its listed status and undergo a restructuring exercise to boost yields and improve productivity while trimming its workforce.
It said the airline has three options – spinning off profitable divisions to raise cash, privatisation and declaring bankruptcy. Ideally, it said MAS can downsize by 19% and slice capacity by 10%.
MAS is not beyond redemption, according to former Proton CEO, Tengku Tan Sri Mahaleel Tengku Ariff.
"There are many good Malaysians who are able and capable to run MAS. Just get rid of its many advisers and the food catering contract. And get the unions to shape up or ship out. Why do Cathay Pacific and Singapore airlines make money," Tengku Mahaleel told me.
His view is shared by a prominent airline industry CEO.
"It is not hopeless. It is easy to say anything if you are not accountable ... there is a big difference between an owner and salaried man. If the company goes down, the owner goes down, the salaried man only gets sacked," said the CEO in comparing MAS and AirAsia.
And he said the government must have the political will to let MAS go.
Azman Ujang is a former editor-in-chief of Bernama. Comments: letters@thesundaily.com

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Note how the denial is carefully worded...if anyone wants to have an equity stake in MH, u dont talk to MH...u talk to its shareholders....

Standard style of denial that will usually be gobbled up by the lay person.

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MAS needs radical, sweeping change but CEO optimistic

 

 

Malaysia Airlines (MAS) is optimistic for the future although its only option right now is radical or sweeping change, its CEO Ahmad Jauhari Yahya said at the company’s annual general meeting (AGM).

 

http://www.kinibiz.com/story/corporate/92400/mas-needs-radical-sweeping-change-but-ceo-optimistic.html

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It took AJ almost 3 years to learn what most of us here already know a long, long time ago! ;)

 

Now, lets see what radical changes he is prepared to implement....

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MAS would benefit from a takeover by an airline such as Etihad. They have money and will run the airline like a business but the only way they would even consider it is if the Government doesn't interfere and they have the power to deal with the unions.

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Thumbs up to them. Hopes this sets a precedent for other GLC's

For their time and wisdom, they are likely be compensated in kind.

 

MAS would benefit from a takeover by an airline such as Etihad. They have money and will run the airline like a business but the only way they would even consider it is if the Government doesn't interfere and they have the power to deal with the unions.

 

Arabs money down the drain is anytime better than our tax money.

Edited by KK Lee

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"Although unjustified, we are determined to rebuild the brand," Md Nor said, adding that 2013 was not a good year for the airline.

 

But he was confident that all was not lost, saying MAS, like the national flag and the hibiscus flower, was a national icon.

 

"We are Malaysia's embassy on wings, as we carry the nation's name every single time one of our flights is in the air," he said.

 

"These are factors which must be taken into consideration," he told the press conference.

 

Ahmad Jauhari said despite its appalling balance sheet, Malaysia Airlines still had strong assets.

 

"We have a world class engineering team, we have award-winning crew, a very young fleet," he said, adding these were all genuine tangible factors.

 

- See more at: http://www.themalaysianinsider.com/malaysia/article/mas-non-executive-directors-return-rm396000-fees-for-2013#sthash.xAEUKJNF.dpuf

 

Could one expect national icon to change?

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That Mohd Nor is an old dinosaur still stuck with the MSA-time mindset.

 

AK is also a Malaysia icon, Malaysia's embassy on wings, carrying the nation's name every single time but a very successful and profitable one at that.

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Finally I had the time to write this.

 

A look at Etihad's collection of ailing airlines that they own:

  • Aer Lingus - 4.11%
  • Air Berlin - 29%
  • Air Serbia - 49%
  • Air Seychelles - 40%
  • Etihad Regional - 33.33%
  • Jet Airways - 24%
  • Virgin Australia - 19.9%
  • Alitalia - planned 49%
  • Malaysia Airlines - ?

Based on the % of the holding stakes, I think EY do not really concern whether they are holding a big or a small pie, but I tend to believe that they would prefer to hold the maximum stakes allowed by the regulator in Malaysia i.e. 49%.

 

However, based on the current shareholding structure of MH, the most straight forward way to see this is a purchase of all shares owned by Khazanah (i.e. 17.33% of MH). I think the shares owned by PMB (52% of MH) is off limit. MH will be something similar like 9W to EY.

 

Should this planned takeover goes through, I do not see any major impact to MH's current route network. Based on what happened with the other 6/7 other ailing airlines that EY own, none of them forge a consolidation relationship with EY. I think EY might be putting a few of their executives in MH's Board of Directors to safeguard their interest. MH will then let to operate under its own pace and capability, however, should its current state worsen, then some of the future decisions might favour EY. Also, if MH situation will be similar to 9W, expect the next CEO of MH will be someone that EY appointed and he will definitely be a non BUMI (a Caucasian rather).

 

This is what I envisage should MH's situation get worsen AFTER EY's takeover:

  • Continued pressure on yields and MH decided to revisit the route cutting exercise again.
  • Should this happens, we might see MH cutting its destinations in the Middle East (DXB), Europe (FRA, AMS, IST) and New Zealand (AKL). These routes are all currently operated by MH B772 (save for DXB). Axing them would mean MH do not have to worry about replacing the B772 fleet. There will be no B772 fleet renewal program. MH current fleet renewal is actually has completed.
  • MH to terminate DXB once again but opens AUH. MH and EY to operate a joint operation on the KUL-AUH sectors. Expect a 3 daily flights in total (2 daily by EY and 1 daily by MH). The concept is similar to what Qantas and Emirates are having now. MH pax should expect to spend more time hubbing through AUH to get to Europe, Africa and America.
  • MH will channel its Europe bound pax to EY at AUH. MH will probably code share with all of EY's European destinations. MH might still keep CDG and LHR due to the A380s.
  • MH will channel its New Zealand bound pax with Virgin Australia at SYD/MEL/BNE.
  • MH can try to persuade EY to purchase its A380s if MH's A380 operation is indeed loss making. If this happens, MH would have to withdraw from Europe altogether. EY has 10 A380s on firm order with 5 option.

I actually see this EY planned takeover as a godsend to MH. MH had f*up its past tie up efforts with Qantas (Orca/Sapphire) and AirAsia (share swap). Do not f* this one up for f* sake.

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Saw on the 8pm news today that Khazanah now thinks that MAS should be privatized.

 

Now, as they have seen the light, there are two figures.

One. Market price is 1B USD. Second, Break up value is 1B Euro.

So, even with paying premium to Khazanah, outlay for 70 percent should not be more than 1.5 B Euro.

However, takeover candidates also take the excisting debt position. About 2.5 B Euro.

Another thing i heard in the grapevine is that MAS will have heavy losses in Q2. to be announced later.

 

One thing is for sure.

Whomever takes over, if that is the case, is either very brave or are seasoned gamblers.

 

My two ringgit sent opinion.

Breaking up MAS and sell, MRO, Firefly and Airport Services, and maybe MASKargo, is the same as putting MAS into its grave.

But finding a real player with money to take MAS for what it is, is the ultimate challenge.

But, as the late General Patton once has said, "No guts no glory".

 

We wiil know soon if anyone has the guts.

 

Cheers

Art.

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