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Mohd Suhaimi Fariz

MAS Privatisation

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If the government is keen to help MAB, why do they (prev govt) consented to giving out AOC/ASP/ASL to Malindo Air, knowing it will eat up the rakyats own taxpayer money by chewing off the small Malaysian Aviation market share?

 

We are a country with a population of 32m which is sandwiched and handicapped between 2 major aviation hubs i.e BKK and SIN.

 

Malaysia just need 2 major airlines. AK/D7 to lead as LCC and a government owned national airline to serve the FSC market (MH). There is no need for a 3rd carrier. Be like Singapore where you only got 2 major airline groups. Govt owned SIA group (SQ, Scoot, Silk, SQ cargo) and Jetstar (which is btw 10% owned by SIA's parent company Temasek group).

 

The govt should consider making MH and Malindo to be merged into 1 entity where both can serve different segments of the market with different product offerings, i.e serving the cost sensitive and the niche full service high yield market.

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If the government is keen to help MAB, why do they (prev govt) consented to giving out AOC/ASP/ASL to Malindo Air, knowing it will eat up the rakyats own taxpayer money by chewing off the small Malaysian Aviation market share?

 

We are a country with a population of 32m which is sandwiched and handicapped between 2 major aviation hubs i.e BKK and SIN.

 

Malaysia just need 2 major airlines. AK/D7 to lead as LCC and a government owned national airline to serve the FSC market (MH). There is no need for a 3rd carrier. Be like Singapore where you only got 2 major airline groups. Govt owned SIA group (SQ, Scoot, Silk, SQ cargo) and Jetstar (which is btw 10% owned by SIA's parent company Temasek group).

 

The govt should consider making MH and Malindo to be merged into 1 entity where both can serve different segments of the market with different product offerings, i.e serving the cost sensitive and the niche full service high yield market.

If country's population is the determine factor, airlines like klm, sq, cx, qr, ek, etc shouldn't be exist or successful at all.

 

If mh is for national service and not making losses, it will be limited to domestic and certain regional routes. It's break even fleet size is probably about half of current.

 

Gomen involvement/protection was probably the greatest cause of mh failure. Continue gomen protection is unlikely to assist mh to stand on its own.

 

Unlike domestic industry, airlines are competing internationally. Most glc bod members are ex gomen servants or politicians, lack business sense to guide the management.

 

The world is greater than coconut shell.

Edited by KK Lee

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If the government is keen to help MAB, why do they (prev govt) consented to giving out AOC/ASP/ASL to Malindo Air, knowing it will eat up the rakyats own taxpayer money by chewing off the small Malaysian Aviation market share?

 

We are a country with a population of 32m which is sandwiched and handicapped between 2 major aviation hubs i.e BKK and SIN.

 

Malaysia just need 2 major airlines. AK/D7 to lead as LCC and a government owned national airline to serve the FSC market (MH). There is no need for a 3rd carrier. Be like Singapore where you only got 2 major airline groups. Govt owned SIA group (SQ, Scoot, Silk, SQ cargo) and Jetstar (which is btw 10% owned by SIA's parent company Temasek group).

 

The govt should consider making MH and Malindo to be merged into 1 entity where both can serve different segments of the market with different product offerings, i.e serving the cost sensitive and the niche full service high yield market.

So essentially, what you are saying is that you are perfectly happy paying more for your airfare as a result of less competition?

 

And you are conveniently forgetting that MAS was not profitable even before OD existed. By stopping OD from being established, not only would we have our tax money being pumped into MH, but also lose out from less competition.

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Could they do another "Proton" sale? sell the 49.9%

 

Heard from a little bird that Khazanah did engage bankers not too long ago to find buyers for MH.... nobody was interested........

Edited by jani

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If the government is keen to help MAB, why do they (prev govt) consented to giving out AOC/ASP/ASL to Malindo Air, knowing it will eat up the rakyats own taxpayer money by chewing off the small Malaysian Aviation market share?

 

We are a country with a population of 32m which is sandwiched and handicapped between 2 major aviation hubs i.e BKK and SIN.

 

Malaysia just need 2 major airlines. AK/D7 to lead as LCC and a government owned national airline to serve the FSC market (MH). There is no need for a 3rd carrier. Be like Singapore where you only got 2 major airline groups. Govt owned SIA group (SQ, Scoot, Silk, SQ cargo) and Jetstar (which is btw 10% owned by SIA's parent company Temasek group).

 

The govt should consider making MH and Malindo to be merged into 1 entity where both can serve different segments of the market with different product offerings, i.e serving the cost sensitive and the niche full service high yield market.

I think you forgot that MAS has been under many turnaround plans for the past 20 years - well before Malindo Air was established. Furthermore, when Malindo was launched, it was more interested in competing with Airasia - they said they are a hybrid airline with full service but at LCC fares. So why should anyone want to fly on Airasia if they can get full service from Malindo at the same fares?

 

MAS has been suffering from bad management - the stories of one sided crony contracts were rife. It was way overstaffed. Senior management positions were created for well connected individuals who do no work nor contribute to the airline. So many stories of wastage and inefficiency were emerging from MAS.

 

MAS has really got no one to blame but itself. It has allowed politicians to interfere with its proper running as a competitive international business. It made the mistaken assumption that the government will guarantee its losses perpetually. If it is allowed to close shop, it has no one to blame but itself.

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The hate is no more than the hate for Airasia. There are plenty of fanboys of both airlines.

I don't think the hate for AK Group has escalated to calls for shutting it down. Do I like AK? Of course and I have flown them numerous times. Here are the reasons why I like AK Group:

- promotes competition between AK, MH, OD and keeps each other in check

- serves destinations that aren't feasible either by MH or OD (e.g. KBV, PQC, MLE, REP, CNX etc.)

- opens up the opportunity for many people (including lots of Malaysians) to travel and see the world where they previously couldnt afford to

- brings lots of tourists to Malaysia

- connect lots of secondary cities in Malaysia without passing through KUL (not really applicable to me, but great for others)

- provides employment for 17,000 people (and from what I hear, TF treats his employees really well)

 

What I dislike (not hate) about AK Group is their disingenuous marketing and:

- KLIA2 fees (no other airline charges RM2)

- PSC for non-ASEAN destinations

- Pedantic complaints about KLIA2

- Unpaid fees (not only to MAHB but also to other companies/countries, e.g. Nepal)

- Leave others to take care of their mess (e.g. when they suspended LGW)

MAS has been suffering from bad management - the stories of one sided crony contracts were rife. It was way overstaffed. Senior management positions were created for well connected individuals who do no work nor contribute to the airline. So many stories of wastage and inefficiency were emerging from MAS.

Do you think this is limited to MAB? Edited by Craig

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I seriously don't understand why the hatred for MAB when there are bigger fish to fry. As Suzanne mentioned, you can get your tax money's worth and it's a tangible benefit.

"Fool me once, shame on you; fool me twice, shame on me". How many times do we want to fool by mab's btp?

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How many times do we want to fool by mab's btp?

Speak for yourself. It’s evident that most people here aren’t naïve enough to believe that.

 

What some people are saying is that there are other GLCs that bleed taxpayers’ money, but don’t offer the same opportunities to benefit from.

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MAS has been suffering from bad management - the stories of one sided crony contracts were rife. It was way overstaffed. Senior management positions were created for well connected individuals who do no work nor contribute to the airline. So many stories of wastage and inefficiency were emerging from MAS.

 

The irony is most of those stories were from the era of the current PM, the same one that's talking about selling/shutting down the airline.

 

"Fool me once, shame on you; fool me twice, shame on me". How many times do we want to fool by mab's btp?

 

Problem is, armchair CEOs never seem to be able to find the solution for this problem other than closing it up.

 

So, armchair CEOs - who will step up and be the next Tony Fernandes that will turn around MAS? Stand up and make your voice heard!

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For those who still wants MH to shut down, you do realize that MH is providing a lot of connectivity that AK Group or OD doesn't right? If MH is gone, you'll probably see the likes of DE, WY, EY reducing or quitting KUL altogether. You can forget about attracting foreign carriers like AY (not saying that they are planning to fly to KUL, but if they do, I bet a lot of it is due to MH's connections).

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For those who still wants MH to shut down, you do realize that MH is providing a lot of connectivity that AK Group or OD doesn't right? If MH is gone, you'll probably see the likes of DE, WY, EY reducing or quitting KUL altogether. You can forget about attracting foreign carriers like AY (not saying that they are planning to fly to KUL, but if they do, I bet a lot of it is due to MH's connections).

 

Should convey this message to Khazanah folks, but I guess MAS BoD would have advise them about this...

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The irony is most of those stories were from the era of the current PM, the same one that's talking about selling/shutting down the airline.

 

 

Problem is, armchair CEOs never seem to be able to find the solution for this problem other than closing it up.

 

So, armchair CEOs - who will step up and be the next Tony Fernandes that will turn around MAS? Stand up and make your voice heard!

Some armchair may not operate airlines but small enterprises and don't need endless taxpayers bailout.

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Some armchair may not operate airlines but small enterprises and don't need endless taxpayers bailout.

Does the small enterprise have a duty to:

- provide connectivity to the areas in Malaysia where air travel is the only possible way

- provide a reasonable means of transportation

 

You know when was MH profitable? When MH/SQ had a join shuttle service between KUL and SIN and it costs RM400-500 one way and a KUL-BKI ticket cost RM800 (in 1990s MYR) one way.

 

Managing a 100 employees company is not the same as managing a 10,000 employees company. Just think about the severance package - MAB will need to sell all their assets to pay creditors and staff and then you want the Malaysia Govt. to start a new airline from scratch?

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For those who still wants MH to shut down, you do realize that MH is providing a lot of connectivity that AK Group or OD doesn't right? If MH is gone, you'll probably see the likes of DE, WY, EY reducing or quitting KUL altogether. You can forget about attracting foreign carriers like AY (not saying that they are planning to fly to KUL, but if they do, I bet a lot of it is due to MH's connections).

And along the way, ruining the fantasy of watching KUL grow into an aviation hub that rivals the likes of SIN or BKK :)

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I think this sudden news about MH is because the parent, Khazanah, reported a big loss and that is a stain on their previously sterling laurel. MH alone contributed for more than half of these losses. Now that it is out in the open and the government could not hide it any longer, I am quite certain Khazanah does not want MH in its portfolio anymore regardless of MH's "strategic asset" status. Khazanah should be up there with the likes of Temasek etc and not to be bogged down by MH.

 

I do not think MH is capable in pulling a JAL turnaround plan. Even if Khazanah hires the CEO whom made JAL's turnaround successful, I doubt he will succeed due to different business environment.

 

I think the prudent way to go is to close the airline and start afresh. Case reference: Sabena to Brussels Airlines, Swissair to SWISS and Meridiana to Air Italy. Having to start over has its advantages, the new MH gets to renegotiate all its contracts (suppliers, contractors, employees). It will be a bitter pill to swallow but those airlines I mentioned as case reference are successful today after closure of their respective predecessor. Given MH's flag carrier status, it will get the necessary will and assistance from the stakeholders if it chooses this path. At the end of the day, we all want MH to be successful and profitable.

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I think the prudent way to go is to close the airline and start afresh. Case reference: Sabena to Brussels Airlines, Swissair to SWISS and Meridiana to Air Italy. Having to start over has its advantages, the new MH gets to renegotiate all its contracts (suppliers, contractors, employees). It will be a bitter pill to swallow but those airlines I mentioned as case reference are successful today after closure of their respective predecessor.

These airlines were also sold to foreign companies. Malaysians raised a stink when the first foreign CEO was hired. Just imagine if the new airline were to be sold off to another country (which would more likely than not be China).

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Does the small enterprise have a duty to:

- provide connectivity to the areas in Malaysia where air travel is the only possible way

- provide a reasonable means of transportation

 

You know when was MH profitable? When MH/SQ had a join shuttle service between KUL and SIN and it costs RM400-500 one way and a KUL-BKI ticket cost RM800 (in 1990s MYR) one way.

 

Managing a 100 employees company is not the same as managing a 10,000 employees company. Just think about the severance package - MAB will need to sell all their assets to pay creditors and staff and then you want the Malaysia Govt. to start a new airline from scratch?

 

 

And that's the magic word - small.

 

Can the same be said if it was scaled up?

 

With current MH business model and management skill and attitude, no matter how small or big the business, it is unlikely to be successful.

 

For business to scale up is a matter of corporate culture, resources available and system in place. Armchair ceo may not have opportunity or resources of glc, doesn't mean couldn't scale up.

 

Taking the red team as example; it started small and didn't have airline business experience. What mh need are people who understand and could deliver what customers want and pay for it.

Edited by KK Lee

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Taking the red team as example; it started small and didn't have airline business experience.

It also didn't need to shoulder the burden of being the flag carrier of Malaysia.

 

KL-London not working out as planned? Just drop it. Not seeing eye to eye with MAHB? I'll just collect whatever taxes I damn please.

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It also didn't need to shoulder the burden of being the flag carrier of Malaysia.

 

KL-London not working out as planned? Just drop it. Not seeing eye to eye with MAHB? I'll just collect whatever taxes I damn please.

 

Then remove the shackle from MH.

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I think this sudden news about MH is because the parent, Khazanah, reported a big loss and that is a stain on their previously sterling laurel. MH alone contributed for more than half of these losses. Now that it is out in the open and the government could not hide it any longer, I am quite certain Khazanah does not want MH in its portfolio anymore regardless of MH's "strategic asset" status. Khazanah should be up there with the likes of Temasek etc and not to be bogged down by MH.

 

I do not think MH is capable in pulling a JAL turnaround plan. Even if Khazanah hires the CEO whom made JAL's turnaround successful, I doubt he will succeed due to different business environment.

 

I think the prudent way to go is to close the airline and start afresh. Case reference: Sabena to Brussels Airlines, Swissair to SWISS and Meridiana to Air Italy. Having to start over has its advantages, the new MH gets to renegotiate all its contracts (suppliers, contractors, employees). It will be a bitter pill to swallow but those airlines I mentioned as case reference are successful today after closure of their respective predecessor. Given MH's flag carrier status, it will get the necessary will and assistance from the stakeholders if it chooses this path. At the end of the day, we all want MH to be successful and profitable.

Yes, Khazanah has sunk in RM 6bn already and had to write off a lot of that. MAG are coming back with a begging bowl and without any strategic plans. That was why they sent them home and come back when they have some plans.

 

MAG was the cleaned up version of MAS but it appears to be heading back to its bad old days - a 360 degree turnaround! Khazanah does not know what to do with it and is asking Putrajaya to come up with something.

 

No one dares to touch MAG - its finances have deteriorated and its business is not doing very well. So it is at the crossroads and only the govt. can decide - whether to pump in more money or to shut it down.

Edited by flee

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When the truth is uncovered regarding the financing affairs of a particular startup JV in the country in tandem with on going CCID investigations to embezzlement and corruption.. everyone can fly with the one LCC..

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