MAS Privatisation

[JuliusWong 0]

Meanwhile, 

MAB unveils Neighbour-Free Seat option

ECONOMY class passengers on Malaysia Airlines Bhd (MAB) will now be able to enjoy the Neighbour-Free Seat (NFS) option which allows passengers to purchase a neighbouring seat or the entire row — that stays passenger-free — providing them with extra room to travel in comfort.

NFS will be available for passengers at a fixed price and offered on selected routes only.

Passengers will be able to purchase NFS three days or 72 hours prior to segment departure, subject to seats availability.

https://themalaysianreserve.com/2019/10/23/mab-unveils-neighbour-free-seat-option/

[flee 5]

Khazanah: Malaysia Airlines restructuring fails to achieve intended goal

https://www.theedgemarkets.com/article/khazanah-malaysia-airlines-restructuring-fails-achieve-intended-goal

[Mohd Suhaimi Fariz 2]

When rationalization was first mooted - nobody was able to foresee Trump picking up a fight with China, causing an economic slowdown. Nobody was able to foresee BN being replaced for the first time in 61 years. Nobody was able to foresee how our own economy dropped like a rock after that happened.

Logically, you'd see that these things would have affected MAB.

Edited October 23, 2019 by Mohd Suhaimi Fariz

[KK Lee 5]

KUALA LUMPUR (Oct 23): Malaysia Airlines Bhd's restructuring has not been smooth and the corporate exercise failed to achieve its intended target as the loss-making company contended with the local aviation industry's overcapacity, Khazanah Nasional Bhd said.

Malaysia sovereign wealth fund Khazanah via Malaysia Aviation Group (MAG) owns 100% of Malaysia Airlines.

The Public Accounts Committee's report today quoted Khazanah managing director Datuk Shahril Ridza Ridzuan as saying Malaysia Airlines continued to report losses due to problems in the Malaysian and global aviation sector.

"The (Malaysian aviation) industry is experiencing overcapacity involving four airlines namely Malaysia Airlines, AirAsia, AirAsia X and Malindo for a 30 million-people market, which translates into about 1.7 seats for one passenger.

"Malaysia Airlines was supposed to break even in 2018 and start reporting profit in 2019. However, Malaysia Airlines registered billions of ringgit in losses which resulted in the company's fair value not being able to support (justify) its investment cost," Shahril said.

https://www.theedgemarkets.com/article/khazanah-malaysia-airlines-restructuring-fails-achieve-intended-goal

Not unexpected.

If use seats/population ratio, DXB, DOH, SIN are much higher. Can't understand the rational to use this yardstick.

Edited October 23, 2019 by KK Lee

[BC Tam 2]

5 hours ago, Mohd Suhaimi Fariz said:

When rationalization was first mooted - nobody was able to foresee Trump picking up a fight with China, causing an economic slowdown. Nobody was able to foresee BN being replaced for the first time in 61 years. Nobody was able to foresee how our own economy dropped like a rock after that happened.

Logically, you'd see that these things would have affected MAB.

Would that not be akin to saying the rain clouds keep drenching upon MAB alone even when others are standing under the same sky ? 

Edited October 23, 2019 by BC Tam

[flee 5]

6 hours ago, Mohd Suhaimi Fariz said:

When rationalization was first mooted - nobody was able to foresee Trump picking up a fight with China, causing an economic slowdown. Nobody was able to foresee BN being replaced for the first time in 61 years. Nobody was able to foresee how our own economy dropped like a rock after that happened.

Logically, you'd see that these things would have affected MAB.

Based on their record the past two decades, it is very difficult for them to make any profit without selling the family silver. They are simply not able to compete in the international market and they are not nimble enough to respond to business challenges.

Political and economic challenges are part and parcel of every business - so management will just have to act accordingly. If there is an economic slowdown in this country, then it isn't only MAB that is affected. All businesses will have to respond to the slowdown.

[BC Tam 2]

13 minutes ago, flee said:

Political ..... challenges are part and parcel of every business - so management will just have to act accordingly

Ah yes, do recall who it was who laid on that blue Hebatkan Negaraku 9M-XXI into BKI last year ?

'Backed the wrong horse' everyone said (particularly with the 'old horse' at other side of the fence then)

You have to but admire how management there had just 'acted accordingly' since - weathered that challenge quite well by any account

[flee 5]

Further afield, I read that Delta Airlines ordered (opportunistically) two additional Airbus A330-900 Neo aircraft for their fleet and brought forward deliveries of these aircraft. They were taking advantage of the big discounts now available due to the softness in the new wide body market. A well managed airline like Delta will always be on top of the situation and will pounce to act in an instant should circumstances warrant it. This is the kind of management competence and excellence that MAB needs to aspire to. 

[Chris Tan 0]

3 hours ago, flee said:

Further afield, I read that Delta Airlines ordered (opportunistically) two additional Airbus A330-900 Neo aircraft for their fleet and brought forward deliveries of these aircraft. They were taking advantage of the big discounts now available due to the softness in the new wide body market. A well managed airline like Delta will always be on top of the situation and will pounce to act in an instant should circumstances warrant it. This is the kind of management competence and excellence that MAB needs to aspire to. 

Aspire to lead the race to the bottom in terms of passenger experience? Like pioneering Basic Economy, completely gutting the value of its FFP, lobbying for the ME3 to stay out of the US, etc?

[Mohd Suhaimi Fariz 2]

9 hours ago, BC Tam said:

Would that not be akin to saying the rain clouds keep drenching upon MAB alone even when others are standing under the same sky ? 

Everybody got drenched. If I recall correctly SQ's profits dropped tremendously in 2018.

And that's in a good market. MAB is not in a good market.

7 hours ago, flee said:

Further afield, I read that Delta Airlines ordered (opportunistically) two additional Airbus A330-900 Neo aircraft for their fleet and brought forward deliveries of these aircraft. They were taking advantage of the big discounts now available due to the softness in the new wide body market. A well managed airline like Delta will always be on top of the situation and will pounce to act in an instant should circumstances warrant it. This is the kind of management competence and excellence that MAB needs to aspire to. 

Only if there's a will to be hands off from the people in power.

Who let the 787 LoI lapse? Certainly not the management. Who saddled the airline with the Dugong? Certainly not the management. 

[flee 5]

4 hours ago, Mohd Suhaimi Fariz said:

Only if there's a will to be hands off from the people in power.

Correct - MAB should be a private sector business and not a GLC. The government should not have any business interests in it. We now have ASEAN open skies, so we should let airlines compete openly without government subsidy or interference.

[flee 5]

Khazanah: Too many airlines based here bad for Malaysia Airlines, weaker ones need to quit

https://www.malaymail.com/news/malaysia/2019/10/24/khazanah-too-many-airlines-based-here-bad-for-malaysia-airlines-weaker-ones/1803140

 

Too few local biz class flyers to keep Malaysia Airlines airborne, Khazanah concludes

https://www.malaymail.com/news/malaysia/2019/10/24/too-few-local-biz-class-flyers-to-keep-malaysia-airlines-airborne-khazanah/1803142

[KK Lee 5]

22 hours ago, JuliusWong said:

Public Accounts Committee has released a report on Khazanah Nasional Berhad’s investments at Dewan Rakyat today.

Some of the highlights are:

- RM1 billion a year in extra capital needed each year just to sustain MAS operations if there is industry consolidation/review. Open Sky Policy partly attributed to MAS's failure to turnaround.

- MAS's loss in FY18 was over RM1 billion.

1 billion in extra capital required to sustain MAB operation. Good Lord! Where are the issues?

There are always reasons and excuses for MAB losses but never management or BOD (current or past) responsibility or fault. Until the management and BOD admit their mistake and fault, same issues would re-occur again and again.

[flee 5]

Interesting to see that Khazanah thinks that there is nothing wrong with MAB and that its problems are caused by outside factors. 

[flee 5]

4 hours ago, Mohd Suhaimi Fariz said:

Everybody got drenched. If I recall correctly SQ's profits dropped tremendously in 2018.

And that's in a good market. MAB is not in a good market.

Yes, even airlines like JAL and Qantas made billion dollar losses. But they managed to turn around and become profitable again whereas Malaysia Airlines seem to be spinning in a circle.

[KK Lee 5]

1 minute ago, flee said:

Khazanah: Too many airlines based here bad for Malaysia Airlines, weaker ones need to quit

https://www.malaymail.com/news/malaysia/2019/10/24/khazanah-too-many-airlines-based-here-bad-for-malaysia-airlines-weaker-ones/1803140

 

Too few local biz class flyers to keep Malaysia Airlines airborne, Khazanah concludes

https://www.malaymail.com/news/malaysia/2019/10/24/too-few-local-biz-class-flyers-to-keep-malaysia-airlines-airborne-khazanah/1803142

Airlines business is not limited to domestic; supposed to ferry pax across its network. MAB should look into how to expand sustainable network.

During many BTP, MAB milked biz class to the max as if biz class pax didn't have a choice. For reasons, many mnc and even glc executives don't choose MAB as first choice. It will needs years of consistent offering to attract these biz class pax but MAB is not known to be consistent.

[jahur 0]

Premium passengers foreign businessmen are non existent in Malaysia. Decades ago i can still find them in sabah walking directly to the airport counter purchasing last min first class tickets all the way to london and didnt bug about on pricing. Now i dont even see a single of them its all prcs and korean leisures. The country itself aint doing well at the moment with the amount of fdi leaking. The current local businessmen we have will nitpick the lowest priced tickets some dont even mind driving on the road.

 

Not helping we have a leader that gives inconsistent statement and opinions that deters investors away. Starting up fresh new full service airline wont help if the government does not settle foreign investors confidence.

Edited October 24, 2019 by jahur

[KK Lee 5]

20 minutes ago, jahur said:

Premium passengers foreign businessmen are non existent in Malaysia. Decades ago i can still find them in sabah walking directly to the airport counter purchasing last min first class tickets all the way to london and didnt bug about on pricing. Now i dont even see a single of them its all prcs and korean leisures. The country itself aint doing well at the moment with the amount of fdi leaking. The current local businessmen we have will nitpick the lowest priced tickets some dont even mind driving on the road.

 

Not helping we have a leader that gives inconsistent statement and opinions that deters investors away. Starting up fresh new full service airline wont help if the government does not settle foreign investors confidence.

Due to US China trade war, many MNC have moved out from China and only few came to Malaysia because of unfriendly business environment if compared with Vietnam and Thailand. Many of these rules and regulations are legacy. Unfortunately, after the blunder of abolishing GST, current administration is hesitate to make more drastic change or cut red tapes.

Believe J class on EK and QR are popular and often fully booked.

Edited October 24, 2019 by KK Lee

[flee 5]

1 minute ago, KK Lee said:

Airlines business is not limited to domestic; supposed to ferry pax across its network. MAB should look into how to expand sustainable network.

During many BTP, MAB milked biz class to the max as if biz class pax didn't have a choice. For reasons, many mnc and even glc executives don't choose MAB as first choice. It will needs years of consistent offering to attract these biz class pax but MAB is not known to be consistent.

I am a sample of one but if many others had the same experience as me, then it is bad news for MAB:

In March this year, I went to Tokyo - I booked my ticket about one month before travelling. I had checked ticket prices for about a month before I booked. It was interesting to find out that the MH ticket price was about RM 350 more than 1 stop SQ and RM 1K more than 1 stop CX flights. I also noted that Airasia X fares were almost as expensive as ANA's! Needless to say, MH did not get my booking even though it was deploying the A380 on that route at that time. I booked on CX because it was cheaper and it allowed me to fly in to HND and leave from NRT.

As for business class pax, it is not that there are fewer of them in Malaysia. Many business travellers choose other airlines because of a number of factors that are important to them. Flight timing and frequency is probably their No 1 priority. Then comes connections - many business travellers don't just buy return flights, they do multi sector flying. Then comes the hard and soft products and consistency of service. So there are many requirements of business travellers that MAB failed to appreciate - so they don't get their business.

Bottom line is that MH needs to compete better and sell more tickets even though the yields are not good - it is always cash positive to sell tickets and fill seats. Flying a plane on 50-60% load is not good for business.

[KK Lee 5]

5 minutes ago, flee said:

I am a sample of one but if many others had the same experience as me, then it is bad news for MAB:

In March this year, I went to Tokyo - I booked my ticket about one month before travelling. I had checked ticket prices for about a month before I booked. It was interesting to find out that the MH ticket price was about RM 350 more than 1 stop SQ and RM 1K more than 1 stop CX flights. I also noted that Airasia X fares were almost as expensive as ANA's! Needless to say, MH did not get my booking even though it was deploying the A380 on that route at that time. I booked on CX because it was cheaper and it allowed me to fly in to HND and leave from NRT.

As for business class pax, it is not that there are fewer of them in Malaysia. Many business travellers choose other airlines because of a number of factors that are important to them. Flight timing and frequency is probably their No 1 priority. Then comes connections - many business travellers don't just buy return flights, they do multi sector flying. Then comes the hard and soft products and consistency of service. So there are many requirements of business travellers that MAB failed to appreciate - so they don't get their business.

Bottom line is that MH needs to compete better and sell more tickets even though the yields are not good - it is always cash positive to sell tickets and fill seats. Flying a plane on 50-60% load is not good for business.

MH365 PKX-KUL is a good example; MAB rather put the cart (i.e saving on parking charges and may be crews layover) ahead of horse (pax convenience).

 

[jahur 0]

14 minutes ago, KK Lee said:

Due to US China trade war, many MNC have moved out from China and only few came to Malaysia because of unfriendly business environment if compared with Vietnam and Thailand. Many of these rules and regulations are legacy. Unfortunately, after the blunder of abolishing GST, current administration is hesitate to make more drastic change or cut red tapes.

Believe J class on EK and QR are popular and often fully booked.

If you were to check how much financial aid and stimulation gulf carriers receive from their respective government to keep prices low and products fresh you'd be shocked. And these carriers always boast about free market opensky is good.

 

13 minutes ago, flee said:

I am a sample of one but if many others had the same experience as me, then it is bad news for MAB:

In March this year, I went to Tokyo - I booked my ticket about one month before travelling. I had checked ticket prices for about a month before I booked. It was interesting to find out that the MH ticket price was about RM 350 more than 1 stop SQ and RM 1K more than 1 stop CX flights. I also noted that Airasia X fares were almost as expensive as ANA's! Needless to say, MH did not get my booking even though it was deploying the A380 on that route at that time. I booked on CX because it was cheaper and it allowed me to fly in to HND and leave from NRT.

As for business class pax, it is not that there are fewer of them in Malaysia. Many business travellers choose other airlines because of a number of factors that are important to them. Flight timing and frequency is probably their No 1 priority. Then comes connections - many business travellers don't just buy return flights, they do multi sector flying. Then comes the hard and soft products and consistency of service. So there are many requirements of business travellers that MAB failed to appreciate - so they don't get their business.

Bottom line is that MH needs to compete better and sell more tickets even though the yields are not good - it is always cash positive to sell tickets and fill seats. Flying a plane on 50-60% load is not good for business.

If they were to operate this way it means further deterioration in product comfort and services. Were a country that shits out on quantity over quality. Those that aim for quality are too little to sustain businesses and many of them have already hopped to other airlines. Even D7 Cant keep up. Ak has the gut to put out 28inch seat with the stupid spaceflex sjw cabin on the upcoming a321neo. It wont be long for Mab to follow the cattle run.

How our airlines perform totally reflects on how well the country's tourism and business sector is. 

Edited October 24, 2019 by jahur

[KK Lee 5]

9 minutes ago, jahur said:

If you were to check how much financial aid and stimulation gulf carriers receive from their respective government to keep prices low and products fresh you'd be shocked. And these carriers always boast about free market opensky is good.

 

If they were to operate this way it means further deterioration in product comfort and services. Were a country that shits out on quantity over quality. Those that aim for quality are too little to sustain businesses and many of them have already hopped to other airlines. Even D7 Cant keep up. Ak has the gut to put out 28inch seat with the stupid spaceflex sjw cabin. It wont be long for Mab to follow the cattle run.

How our airlines perform totally reflects on how well the country's tourism and business sector is. 

MH had billions RM of handout too over many years but couldn't sustain.

There is no doubt, most malaysians disposable income is relatively poor and trained to be thrifty and would choose price over quality or quantity e.g prefer $9.9/800g rather than $11/kg.

Edited October 24, 2019 by KK Lee

[jahur 0]

1 minute ago, KK Lee said:

 

There is no doubt, most malaysians disposable income is relatively poor and would choose price over quality.

I had Little hop to sai gon a year ago for some spotting sessions. I was shock when a large group of local spotters some barely age of 10 had professional dslr cameras top end tier and also majority sporting latest iphones. While most of our young local spotters are struggling to even fund a beginners Nikon d3300 with a budget spotting lens. So yeah our buying power has barely improved.

[flee 5]

10 minutes ago, jahur said:

If they were to operate this way it means further deterioration in product comfort and services. Were a country that shits out on quantity over quality. Those that aim for quality are too little to sustain businesses and many of them have already hopped to other airlines. Even D7 Cant keep up. Ak has the gut to put out 28inch seat with the stupid spaceflex sjw cabin. It wont be long for Mab to follow the cattle run.

How our airlines perform totally reflects on how well the country's tourism and business sector is. 

The airline has to find a balance acceptable to its customers - price vs comfort/convenience/customer experience. At the end of the day, the airline has to try to get away with what the pax can accept for the price that they pay. Its a tight balancing act. Remember when D7 had those shell seats on their planes and everyone complained? They had to change them because they cannot get away with it. Pax don't mind paying a bit more if the comfort level is better.

But it is not just MH everyone is complaining about in the race to the bottom. 100 year old BA is also doing the same. This is the inevitability of the industry these days. Those who are left behind will have no choice but to close - as the many airline bankruptcies in Europe have shown...

Airasia has achieved lowest CASK through managing every tiny detail of their cost base - as they say, take care of the sen and the ringgit will look after itself. This is where MAB still has a lot to do - if they keep blaming everyone else for their problems, they will fail.

[Craig 0]

1 hour ago, KK Lee said:

Due to US China trade war, many MNC have moved out from China and only few came to Malaysia because of unfriendly business environment if compared with Vietnam and Thailand.

I am glad you brought this up. Hot off the press today from the World Bank. Malaysia is ranked as the 12th easiest country to do business (2nd in ASEAN after SG, ranked second worldwide). Thailand is 21 and Vietnam is 70. Ever wonder why they moved to Vietnam instead of Malaysia? Hint: cheap labour

1 hour ago, flee said:

In March this year, I went to Tokyo - I booked my ticket about one month before travelling. I had checked ticket prices for about a month before I booked. It was interesting to find out that the MH ticket price was about RM 350 more than 1 stop SQ and RM 1K more than 1 stop CX flights. I also noted that Airasia X fares were almost as expensive as ANA's! Needless to say, MH did not get my booking even though it was deploying the A380 on that route at that time. I booked on CX because it was cheaper and it allowed me to fly in to HND and leave from NRT.

As for business class pax, it is not that there are fewer of them in Malaysia. Many business travellers choose other airlines because of a number of factors that are important to them. Flight timing and frequency is probably their No 1 priority. Then comes connections - many business travellers don't just buy return flights, they do multi sector flying. Then comes the hard and soft products and consistency of service. So there are many requirements of business travellers that MAB failed to appreciate - so they don't get their business.

I think you are the pax MAB identified as the problem 😃. You are not willing to pay more for a nonstop (most nonstop flights are way more expensive than a connection). You should see how much SQ and CX charges in their home market. You should see how much MH charges for business class ex-SG/TH, most of the time way cheaper than ex-MY.

I think MH serve most business cities with a decent schedule and most of the time, at a higher frequency than foreign carriers, catered for ex-KUL market. Look at schedule for HKG, BKK, SGN, TPE, SYD, TYO, PVG.

58 minutes ago, KK Lee said:

MH365 PKX-KUL is a good example; MAB rather put the cart (i.e saving on parking charges and may be crews layover) ahead of horse (pax convenience).

Are you sure that's the case? MH 318/319 has 2.5 hours turnaround time. They could have left PKX at 08:00 if they really want an hour turnaround.