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Mohd Suhaimi Fariz

MAS Privatisation

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On 1/21/2020 at 6:37 AM, Mohd Suhaimi Fariz said:

More details of AK's bid emerging

1) A380 is gone, and Khazanah to bear the cost of the debt. Leased A332 also gone. 737MAX will not be taken up. 

2) Khazanah to bear retrenchment costs

3) No golden shares, AK to call the shots fully

4) FY not included in deal, MASwings sold.

5) MH branding is gone. 

All in all, Khazanah will have to bear RM 8 billion in costs... 

https://focusmalaysia.my/mainstream/airasias-takeover-of-malaysia-airlines-may-cost-khazanah-over-rm8-bil/?fbclid=IwAR3IUZGY-7eep-5v6XElQFQBK3pQ8doiGALQ0RjNKLjHh7yEyfCRcDKS7ws

Hahahaha what the heck. GILA. And Khazanah supports this? I feel like typing so much more out of anger but meh.

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11 minutes ago, Pall said:

Oh wait, Air France-KLM too denied having any involvement.

https://www.theedgemarkets.com/article/air-franceklm-says-not-involved-malaysia-airlines-sale-talks

So seems like Focus Malaysia is creating rubbish hype out of nothing.

Nah. Likely these things were leaked on purpose to send certain messages to the public. I am all too familiar.

 

Anyway nobody is talking about the Lion Air/Malindo option. I think that's the best. KUL being the hub for Lion Air's Indonesian operations, and able to connect to other flights in Asia and beyond on MH. It's practical, but the politics of it will be too crazy I'd guess.

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43 minutes ago, jani said:

Hahahaha what the heck. GILA. And Khazanah supports this? I feel like typing so much more out of anger but meh.

Khazanah (like Mavcom) was only concerned about overcapacity. They believe that a merger between MAG and AAG would cut capacity. But it is not their job to do so - capacity should be left to the market to regulate.

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43 minutes ago, jani said:

Nah. Likely these things were leaked on purpose to send certain messages to the public. I am all too familiar.

Yes, they want some pingback from the public to see what they think of it. Well, none of the proposals look that great.

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1 hour ago, Pall said:

Oh wait, Air France-KLM too denied having any involvement.

https://www.theedgemarkets.com/article/air-franceklm-says-not-involved-malaysia-airlines-sale-talks

So seems like Focus Malaysia is creating rubbish hype out of nothing.

I don't think it rubbish, AF-KLM admitted they  “had previously been in contact with Malaysia Airlines’s shareholders”. Basically all this proposal have been rejected by the Gov and the details only being leaked now. Maybe someone not at the same page with Khazanah which preferred AAG proposal. 

I would prefer if gov let the foreign entity(AF-KLM/JAL/Malindo) to take over MH rather than AAG. Too bad IAG not interested. 

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AAG may not be too interested either because it may incur more cost to them saving or changing the mindset of the MH mentality 🤐😙😙

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2 hours ago, flee said:

What strikes me most about all the above proposals is how much they are designed to only benefit the proposers. Nothing much has been proposed on how to make MAS the golden airline that it once was again.

Do you think the vultures give a hoot about anything but their own bottom lines?

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13 hours ago, BC Tam said:

Didn't D7 at one time try out a rebranding in blue (for all of one day) ..... ?! 😁

remember the very famous share swap between MAS and AK few years back?

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1 hour ago, Chris Tan said:

Do you think the vultures give a hoot about anything but their own bottom lines?

That is why the govt. is not impressed by the offers - they are all predatory in nature.

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30 minutes ago, Kenny Sing said:

remember the very famous share swap between MAS and AK few years back?

That was a govt. initiative - they recognised that the irrational competition must end. They forced the two companies to merge through the share swap.

However, I don't think the very different corporate cultures can ever work with each other unless one party is overwhelmingly in control. They staff of both companies must be told to "do or die" - their jobs are at stake and if the the merger fails, then none of them will have a job.

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2 hours ago, kandiah k said:

AAG may not be too interested either because it may incur more cost to them saving or changing the mindset of the MH mentality 🤐😙😙

Well if that article is to be believed, MH is gone. All staff become AirAsia staff. You don't like it, there's the door.

I still cannot believe Khazanah is basically in favor of ridding MH and letting only one airline dominate Malaysia.

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2 hours ago, kandiah k said:

AAG may not be too interested either because it may incur more cost to them saving or changing the mindset of the MH mentality 🤐😙😙

Honestly AK's mentality isn't that great either.

Sure they are profitable, but from what I'm told their internal processes are all over the place.

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Yeah I can't understand why they are pushing for AK when MH has a different target market. Could it be because they know something beyond? Do they feel KUL is not attractive enough to sustain full service carriers and premium flyers hence the merging? What will happen to connecting flights for MH long hauls? Maybe if this plan materializes, they should make AK the regional carrier, including widebodies to South, North and West Asia and make MH solely a long haul and ensure connection is possible across these two main airlines. Not sure how that will work economically. Just a thought.

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51 minutes ago, Mohd Suhaimi Fariz said:

Honestly AK's mentality isn't that great either.

Sure they are profitable, but from what I'm told their internal processes are all over the place.

 

I kinda agree from an outsiders point of view. Sadly, they did not know how to manage fame and dollars when they got it. 

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My concern is that AK is only interested in taking out its competition. There will be no pride in what MH stands for or drive to make MH ‘great again’. They have tried it before with the share swap deal - MH ended up worse off. 
 

I really hope they don’t fall into the hands of TF. What we need is a foreign investor who have the knowledge, expertise and experience of performing a turnaround. JAL seems to be the best bet. KUL is definitely not as premium as SIN but I feel that there is still room for both full service carriers and low cost carriers. 
 

the only reason why Khazanah would want to do that is that the board members will benefit from something! It is a no brainer. Hope Dr M prevails this time!

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Interesting discussion. Please be reminded that MH is still bleeding cash to a tune of almost a billion ringgit a year. In other words, it is running on negative cash flow. If you are an investor, why would you want to invest into MH?

1) to enter the Malaysian market? Malaysia is not a big market by any measure. More so the premium market. A large portion of the market is low cost, and the low cost market is dominated by AirAsia. And currently the premium market is dominated by the middle eastern carriers. And one does not need to buy into MH to enter the malaysian market, we generally have an open sky policy with regard to foreign carriers flying into KUL.

2) Its assets? MH have been completely stripped apart and rid of whatever assets it had over the years. Name me one valuable asset MH has. Perhaps the LHR slots.. that's about it.

3) Its MRO facility? Yes, perhaps years ago. Over the last few years it had been stripped and downsized. Huge amount of dollars is required to get it to what it was years ago.

4) its branding? Don't think so.. its branding is still damaged from the twin disasters. It has not fully recovered since.

5) As a spring board to fly into other markets?.. perhaps years ago Lion had that plan with Batik Malaysia. Now, with CAAM being downgraded to Category 2, I doubt this is a sensible thing to do.

MH is still carrying an enormous amount of 'baggage' .. the A380s is one of them. Nobody wants them. Govt intervention.. the last thing a private enterprise wants is govt meddling into their business. And I doubt the ridiculous contracts that were signed previously has all been cleaned up.

So, can someone think of one good reason to invest into MH? We are talking billions of dollars here.. the accusations that the proposals so far is predatory in nature is uncalled for. This is business, not charity.

AirAsia is perhaps the only one that gets to gain.. by ridding of a competitor. For JAL and Air France KLM, can't see what is in it for them.

 

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This report shows what a big mess MH is in.

https://www.malaymail.com/news/malaysia/2020/01/22/report-malaysia-airlines-needs-rm21b-to-continue-operations/1830575

MH really is in no position to choose its suitors.. no matter how much one hates TF and AK, theirs may be the only viable proposal. JAL's 25% not going to make any difference. Air France/KLM is getting out. The management, staff and union should just swallow their ego and pride and accept whatever that's on the table. They screwed up... we cannot keep pumping in taxpayers money into MH.. it is a lot of money.

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3 hours ago, jit said:

This report shows what a big mess MH is in.

https://www.malaymail.com/news/malaysia/2020/01/22/report-malaysia-airlines-needs-rm21b-to-continue-operations/1830575

MH really is in no position to choose its suitors.. no matter how much one hates TF and AK, theirs may be the only viable proposal. JAL's 25% not going to make any difference. Air France/KLM is getting out. The management, staff and union should just swallow their ego and pride and accept whatever that's on the table. They screwed up... we cannot keep pumping in taxpayers money into MH.. it is a lot of money.

Though MH was reported had lossed about RM 800m p.a in last few years? This report could mean some recent losses is buried somewhere or deferred. Unless the gomen is to bare a portion of or full losses for next few years, doubt any business minded person (e.g D7, AF/KL, JL, TK, QR, etc) would even touch MH with a pole.

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4 hours ago, kandiah k said:

Due to services provided, MH's RASK could only be low and due to less fuel efficient aircraft e.g A333, MH CASK is higher; basically, MH is not in a proposition to be profitable.

On occasions, tried to have date change on Y and J class, change fees on one sector is more expensive than buying new return ticket. Can't understand how they manage yield.

 

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Bottom line is that Khazanah should sell off MAS using the model that we saw for Proton. No more management interference from the govt. and let the management run the business like a proper business and not as a civil service. Aviation is an international business and MAS must be able to compete at the international level. Otherwise, close it down and the problem will be solved.

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3 hours ago, KK Lee said:

Due to services provided, MH's RASK could only be low and due to less fuel efficient aircraft e.g A333, MH CASK is higher; basically, MH is not in a proposition to be profitable.

On occasions, tried to have date change on Y and J class, change fees on one sector is more expensive than buying new return ticket. Can't understand how they manage yield.

 

Wow i've never heard of a330 being less fuel efficient let alone one that is on PW. What sort of weed you've been smoking? It is bassically one of the most fuel efficient widebody. The a330neo is only efficient if you put up more seats like an lcc as the rolls royce engines are more power hungry.

Try changing a y ticket on JAL it cost as a brand new ticket unless its flex full fare. 

You guys are asking the impossible in a very unstable market at the moment. Its simple Malaysians are too poor cheapskate to fly fsc, foreign premium pax have abandoned malaysia. Transiting passengers are on subsidised gulf carriers that offer greater value product and services.  Not helping is the current government promoting many inconsistent policies that have deterred investors to neighboring countries instead. More so our pm has been busy angering neighboring countries and trade partners on policies which he believes is right regardless of diplomacy.

Car prices are increasing 25% oh  wait its not confirmed til year end. How is government going to instill investor confidence with this kind of flip flopping. And with lack of foreign businesses for fdis how do you expect flag carriers to stay afloat unless it goes full low carrier which many of us are not keen on it.

Edited by jahur

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16 minutes ago, jahur said:

Wow i've never heard of a330 being less fuel efficient let alone one that is on PW. What sort of weed you've been smoking? It is bassically one of the most fuel efficient widebody. The a330neo is only efficient if you put up more seats like an lcc as the rolls royce engines are more power hungry.

Try changing a y ticket on JAL it cost as a brand new ticket unless its flex full fare. 

You guys are asking the impossible in a very unstable market at the moment. Its simple Malaysians are too poor cheapskate to fly fsc, foreign premium pax have abandoned malaysia. Transiting passengers are on subsidised gulf carriers that offer greater value product and services.  Not helping is the current government promoting many inconsistent policies that have deterred investors to neighboring countries instead. More so our pm has been busy angering neighboring countries and trade partners on policies which he believes is right regardless of diplomacy.

Car prices are increasing 25% oh  wait its not confirmed til year end. How is government going to instill investor confidence with this kind of flip flopping. And with lack of foreign businesses for fdis how do you expect flag carriers to stay afloat unless it goes full low carrier which many of us are not keen on it.

Exactly.

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