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Mohd Suhaimi Fariz

MAS Privatisation

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If it is a win-win model. Why not?

 

Sounds like a revert back to the Malaysia Singapore Airlines model?

Well, MH and SQ do code share. Not sure if these are still in place after the EK partnership, though.

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On top of the main hub routes into Malaysia such as SIN-BKI/KCH/PEN/LGK, the agreement with SQ might contribute to growth at other airports which FY flies into from SIN such KUA, IPH, KBR and etc. That is if they (SQ) code share with FY on those secondary routes. Just my two cents.

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One thing I hope the Tourism people did consider before going along with SQ group is transit time at SIN to the secondary airports in Malaysia. Not going to work too well if you expect someone to spend precious vacation hours loitering at the airport between flights. In this respect, MH would win hands down, though for sure that would not be the only consideration

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Moratorium Over Transition Of MAS To MAB Extended To May 24, 2017
KUALA LUMPUR, May 24 (Bernama) -- The Administrator of Malaysian Airline System Bhd (MAS) has received approval from its stakeholders to extend the current moratorium over the transition of MAS to Malaysia Airlines Bhd (MAB) for a further 12 months until May 24, 2017 to enable the remaining tasks to be completed.
The Malaysian Airline System Bhd (Administration) Act 2015 (MAS Act) provides for the establishment of a new entity, Malaysia Airlines Bhd (MAB), with a new business model to replace MAS as the national carrier, as well as for an effective, efficient and seamless means to transition the business, property, rights, liabilities and affairs of MAS to MAB.
In a statement Tuesday, Administrator Datuk Mohammad Faiz Azmi said as the discussions on the transition are complex, involving laws and tax implications across various jurisdictions, the stakeholders have approved the extension of the current moratorium.
"Because of these reasons and to achieve the best possible outcomes, we have sought and received approval for an extension of the current moratorium," he said.
Meanwhile, Mohammad Faiz, who was appointed as the Administrator on May 25, 2015, said after a year of administration, selected assets and liabilities critical to MAB's airline operations have been transferred from MAS to MAB.
These include land and buildings, workshop facilities, offices, stations, aircraft and motor vehicles, as well as contracts for engineering services, legal services, fuel supply, catering, security, system support and working capital facilities.
He also reiterated the administration's priority of safeguarding the welfare of the next-of-kin of the victims of the ill-fated Malaysia Airlines Flights MH370 and MH17.

Also under the umbrella is the division MAB Kargo providing standard, express and special cargo. This division will apply for its own Airline Operating Certificate and will operate as separate company as of 2017.

 


Interesting to see that MAB Kargo is going to become autonomous - this is despite declining air cargo volumes. Perhaps MAB is getting ready for an expansion of belly cargo carrying capacity and also the return (from lease) of the A332F leased to Turkish Airlines.

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Malaysia Airlines, Lufthansa Technik Collaborate To Set Up MRO Facility


KUALA LUMPUR, May 25 (Bernama) -- The newly established Malaysia Aviation Group Bhd has signed a terms of reference with Lufthansa Technik AG on a strategic partnership framework for a joint venture (JV) to establish a regional maintenance, repair and overhaul (MRO) facility.


The MRO facility, planned for 2017, would be based at Malaysia Airlines' existing facilities at the Kuala Lumpur International Airport and service the Boeing 737 and Airbus A320 family of aircraft, said Malaysia Airlines in a statement.


Malaysia Aviation Group is an entity under Khazanah Nasional Bhd.


The JV is expected to see the creation of additional jobs and introduce the state-of-the-art technical capabilities for base maintenance services and best practices in operations, hence, creating a centre of excellence for the region.


"We are excited about the tangible benefits of the JV.


"Lufthansa Technik is one of the global leaders in MRO services, and the level of skill, expertise and technological transfer will be invaluable, both for us and for Malaysia," said Malaysia Aviation Group Malaysia Airlines Bhd Group Chief Executive Officer Christoph R. Mueller.


Meanwhile, Lufthansa Chief Executive Officer Dr Johannes Bussmann said once the new JV becomes a reality, the airline would extend its MRO capabilities significantly.


With Malaysia Airlines at its side, Lufthansa would have a strong regional partner to create a real success story with this new business, he added.


The formation of the JV would, however, be subject to, approvals being sought from the regulatory authorities and the signing of definitive agreements.

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Malaysia Airlines and Malaysia Aviation Group shows continued progress over Q1 2016


  • Good progress on turnaround plan with encouraging performance in February

  • Yield-per-passenger up 23.4%; costs down 32.9% on significant savings initiatives

  • Airline ahead of budget at operating and EBITDAR levels

  • Steadily improving on-time-performance and recovering customer service index

  • Two additional A350-900 aircraft ordered to reach a critical fleet size

  • Various product developments including the launch of the new business class seat

  • 2nd quarter is expected to be weaker and the Group expects to record a loss for the year 2016, but ahead of plan to be sustainably profitable by 2018


Sepang 26 May 2016 - Malaysia Airlines Berhad (“MAB”) is pleased to announce its latest quarterly update, in line with its commitment to good corporate governance and transparency.


The airline started the year positively, with the company making good progress on the turnaround plan. MAB has delivered ahead of its financial budget for the first three months of 2016. On-time-performance is stable and steadily improving and the airline’s customer service index is recovering with more significant enhancements in the pipeline.


Malaysia Aviation Group Berhad Group Chief Executive Officer Christoph Mueller said: “I am delighted at the continued improvements shown by Malaysia Airlines in this first year of the biggest and fastest transformation in our history. By moving swiftly and making tough decisions early, we have reshaped the business for a strong, sustainable future. Our financial progress achieved this quarter shows that we are firmly on the right trajectory. The management team and the Board of Directors have now commenced discussions on the next growth phase in order to further connect Malaysia to the world.”


“Even though personal circumstances mean I will not complete my full term as chief executive, I am confident that the foundations are now in place for the national carrier to achieve sustainable profitability in the stated timeframe and regain its rightful place as a symbol of national pride.”


Q1 Results for MAB


Actual Q1 2016


Passengers (m) 3.2

ASK (m) 10,930.8

Passenger Load Factor (%) 68.9%

Passenger Yield (sen) 22.6

On-Time Performance (%)

83%


Q1 performance


Prior to exceptional items, the first quarter was marginally profitable for the airline and the Group at the operating level, driven by favourable fuel prices and market conditions, coupled with operational improvements and a strong performance in February. The airline and the Group were ahead of budget, which gives a strong indication that the turnaround initiatives are delivering positive results.


Looking forward, the second quarter is expected to be weaker due to the soft demand during Ramadan. Overall, the airline and the Group are expected to record a loss for the whole fiscal year of 2016 but significantly smaller than initially budgeted at the beginning of the year, and ahead of the turnaround plan for the airline to be sustainably profitable by 2018.


For the quarter, revenue was down -21.7% with ASK decreasing -30.2%. Average yield per passenger rose a strong 23.4% against the same quarter last year. However, the overall load factor was softer at 68.9% but is now trending upward.


The market environment is showing strong signs of improvements in China and North Asia. Route profitability also improved in Australasia, although demand in certain markets remains weak.


Costs declined by 32.9% year on year (YoY) as a result of the airline’s significant savings initiatives.


Fuel savings and a lower than budgeted fuel price, contributed significantly to this improved cost position. These savings, based on a special fuel conservation programme formed of 21 initiatives, saw the airline reduce fuel burn in the first quarter by 10,000 tonnes.


The headcount reduction and improved work efficiency also resulted in payroll savings before exceptional items of 40.5% YoY.


Equally, a significant reduction in the number of suppliers and the ongoing renegotiation of contracts contributed strongly to the airline hitting its unit cost reduction targets.


Unit costs declined 10% despite a significant reduction in long haul capacity after the grounding of the entire B777 fleet.


During the period, operational cash flow before exceptional items was positive. Exceptional items for the period included sign-on bonuses and other restructuring costs.


Operational improvements continue


Improving on-time performance is a core goal of the operations team. Punctuality improved steadily during the period and reached a year-to-date level of 83% at the end of the quarter, following a disappointing performance in December 2015 and January 2016. On-time performance on domestic flights year-to-date was very good at around 90%. Improved technical dispatch reliability across all fleets and increased ground handling productivity at Kuala Lumpur International Airport were the main contributors to our improved performance overall.


Mishandled luggage also declined by 50% during the quarter which, coupled with improved punctuality, saw customer complaints decline by 37% between January and March 2016. This is the lowest level since 2012.


Fleet enhancements


Malaysia Airlines has ordered two additional A350-900 aircraft, adding to the original four on order, so as to reach a critical fleet size which allows for scheduled maintenance and future network expansion. Preparation for the introduction of the new aircraft, planned for late 2017, is ahead of schedule with initial pilot and engineering training well underway. The aircraft will be able to operate non-stop from Kuala Lumpur to London and throughout Asia.


Malaysia Airlines actively assesses new route opportunities on an on-going basis and is currently evaluating the possibility of serving unique and new destinations with narrow-body aircraft with long-range capability.


The period also saw continued progress on revamping customer experiences, with two out of 15 A330-300s equipped with new lie-flat business class seats. This transition was completed ahead of schedule and the remaining aircraft are due to be converted by the end of the year.


All A380s will undergo a C-Check in 2016. This is an extensive maintenance programme which will be performed in-house for the first time.


Customer service index improving


With a greater focus on improving customer experience, the period started with the official launch of our new Business class seat and cabin, already flying the Sydney route. In addition, 18 new Premium Economy seats have now been installed on our fleet of A330s.


A new “dine on demand” service has also been introduced, enabling First and Business class customers to enjoy their meals as and when they want. The new initiative is part of an entire menu overhaul, with new upgrades also being introduced on Economy class, which saw a 20% increase in investment and bigger protein portions.


In addition, a new Premium Economy Class will be introduced on our A380s in the fourth quarter of this financial year.


Malaysia Airlines’ code share agreement with Emirates entered its next phase during this quarter with Enrich members now able to earn and redeem miles whilst travelling with the Dubai-based airline.


The regional lounge at Kuala Lumpur International Airport will also benefit from a complete refurbishment by local designer Duoz Sdn Bhd, giving it a contemporary luxurious Malaysian design.


Technology driven company


Migration to a state-of-the-art cloud based data centre has commenced to improve reliability and cyber security as well as enhancing agility and better time to market. Equally, we have invested to improve internal information technology systems and platforms, providing our employees with the necessary tools to drive efficiency and productivity in their day-to-day work.


A key milestone on the company's path to become a leading digital player has been the selection of a new Passenger Service System from Amadeus IT Group SA. On completion, expected to be in the first half of 2017, our customers will enjoy a significantly enhanced interface including state-of-the-art mobile applications, and a truly interactive web-site with improved offerings for passengers both in the air and on the ground. The system will also significantly improve management of bookings and revenue while accelerating the transition to a paperless airport environment with faster and more reliable check-in and boarding procedures.


Investing in a talent pipeline


The quarter saw the resignation of Group Chief Executive Officer, Christoph Mueller, who will serve a six-month notice period until September in order to facilitate an orderly transition. He has expressed a desire to continue to remain on the Board of Directors as a Non-Executive Director if circumstances permit. In order to facilitate a smooth transition, the Board has appointed Peter Bellew, the current Chief Operating Officer as Executive Director of the Board with immediate effect.


During the period, we launched our new pilot training programme which will result in 100 pilots promoted to the level of Captain in 2016. All of the remaining pilots from our B777 fleet are being retrained on other aircraft, a process which is expected to be completed by November 2016.


We also plan to announce a new career progression for Malaysia Airlines’ pilots, allowing for horizontal career paths between the four airlines in the Group. This effort is part of the career development programme that is being assessed across the whole company.


The quarter saw the formation of employee-elected Work Councils which agreed, at their first assembly with the management team, to work collaboratively to restore the Group as an employer of choice in Malaysia.


Malaysia Airlines also joined forces with seven other founding airlines to establish the Association of Malaysian Air Carriers (AMAC), in order to provide a forum to discuss issues affecting the industry. The association will promote growth in the industry and the creation of highly skilled jobs, both directly and indirectly, across the aviation sector.


Source:


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Strike a deal with Airbus and the leasing companies to get rid of the A380s and bring in say, 25 - 30 pieces of the A350-900 and 5 - 10 pieces of the A350-1000.

 

Replace the soon to be outdated narrowbody fleet. As a long time 737 operator, strike a bargain with Boeing for the 737 MAX. Boeing needs the numbers to catch up with the A320neo. 60 - 70 pieces would be ideal for MAS. If anything, that's to maintain a relationship with both Airbus and Boeing and to keep either one honest.

 

And perhaps, pay close attention to the potential development of the so-called MoM aircraft (757 replacement if you like). Might suit an airline like MAS pretty well.

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Should this thread be renamed to "MAS rebranding" or the likes of it? They are no longer talking about privatisation right?

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http://www.theedgemarkets.com/my/article/malaysia-airlines-go-after-premium-low-cost-segments

 

Notable points;

- one A380 already fitted with new premium Y. Anyone know which reg and how the seats differ from regular Y?

- the future 359s are four class aircraft. I really thought we see the last of F in the current 380s but apparently not.

- how the review of the airport tax between klia 1 & 2 pans out will influence if MH starts any flights out of klia2

- those klia2 proposed flights are to largely to North Asian destinations

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Ambitious Fleet Moves Signal Revival For Malaysia Airlines

 

The Boeing agreement includes 25 firm orders and 25 purchase rights for 737 MAX aircraft and would allow the launch of routes that fit the carrier’s desire to increase its focus on its Asian network.
“It is a huge boost to the staff and to the country that [the airline] can go out and do a deal for 50 new aircraft,” Malaysia Airlines CEO Peter Bellew tells Aviation Week. “This shows we’re serious about growing the airline over the next decade.”
And the carrier is not finished yet. Malaysia Airlines still has a potential requirement for long-range narrowbody aircraft beyond the orders it has already placed, Bellew says. The airline is looking at the longer-range (LR) version of the Airbus A321neo, but could also order more 737-9s to meet this need, he says.
There may be some routes the A321LR could operate that would make it an attractive option if the carrier could get the right price, Bellew says. The airline “is still running that analysis,” and a decision is likely within the next 12 months.
Malaysia Airlines is also considering adding to its fleet of 15 Airbus A330-300s. This aircraft type has proven successful on almost every route it operates, and the carrier believes it “could very profitably employ three or four [more] of those,” says Bellew. The airline would look to purchase used A330s and introduce them in late 2017 or early 2018. He predicts the price of A330-300s older than 10 years will soon fall dramatically.
The carrier may bring in more aircraft to boost its charter operations catering to religious pilgrimage traffic. Bellew says Malaysia Airlines is looking at adding used or leased aircraft from 2018 onward.
Full report here:

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Thanks for sharing flee. Unfortunately, it is behind pay wall.

 

Point to note: Adding another leased/bought non-standard A333s might be last thing MAB want to do to increase operation cost and mess up the in flight experience. We have seen this happened with previous MAS A333/A332 fleet. They can consider to contact lessor which has some end of production line order in place for brand new one. A333 eith PW-engines is least desired in the market, you won't find many airlines currently flying them except OZ, KE, DL, AA, and CZ. Maybe MH can consider AA's nine A333, AA is shedding them end of this year.

 

Seems like A321neoLR and B737 MAX 9 plan is still up in the air. 50/50 chance for either to happen

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Maybe MH can consider AA's nine A333, AA is shedding them end of this year.

 

Those ex-US 333 are really old already. Quite a number of SQ 333 will become available from next year. Perhaps they should look at those instead. Seat configuration wise there aren't a lot of differences. Just that SQ is using RR on the 333.

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Ambitious Fleet Moves Signal Revival For Malaysia Airlines

 

The Boeing agreement includes 25 firm orders and 25 purchase rights for 737 MAX aircraft and would allow the launch of routes that fit the carriers desire to increase its focus on its Asian network.

 

It is a huge boost to the staff and to the country that [the airline] can go out and do a deal for 50 new aircraft, Malaysia Airlines CEO Peter Bellew tells Aviation Week. This shows were serious about growing the airline over the next decade.

 

And the carrier is not finished yet. Malaysia Airlines still has a potential requirement for long-range narrowbody aircraft beyond the orders it has already placed, Bellew says. The airline is looking at the longer-range (LR) version of the Airbus A321neo, but could also order more 737-9s to meet this need, he says.

 

There may be some routes the A321LR could operate that would make it an attractive option if the carrier could get the right price, Bellew says. The airline is still running that analysis, and a decision is likely within the next 12 months.

 

Malaysia Airlines is also considering adding to its fleet of 15 Airbus A330-300s. This aircraft type has proven successful on almost every route it operates, and the carrier believes it could very profitably employ three or four [more] of those, says Bellew. The airline would look to purchase used A330s and introduce them in late 2017 or early 2018. He predicts the price of A330-300s older than 10 years will soon fall dramatically.

 

The carrier may bring in more aircraft to boost its charter operations catering to religious pilgrimage traffic. Bellew says Malaysia Airlines is looking at adding used or leased aircraft from 2018 onward.

 

Full report here:

http://aviationweek.com/commercial-aviation/ambitious-fleet-moves-signal-revival-malaysia-airlines

Mh to buy used (over 10years old) a333 in 2017/18?! Believe it make sense if mh to lease a333 while waiting for a350 delivery.

 

Oil price is cyclical; if oil price rise over $70/barrel, a333 cheap frame is unlikely to compensate for fuel cost. Mh will plunge back to red, and btp will restart again.

Edited by KK Lee

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Mh to buy used (over 10years old) a333 in 2017/18?! Believe it make sense if mh to lease a333 while waiting for a350 delivery.

 

Oil price is cyclical; if oil price rise over $70/barrel, a333 cheap frame is unlikely to compensate for fuel cost. Mh will plunge back to red, and btp will restart again.

Yes indeed, lease would be a better option. I am sure the lessor are willing to offer a good deal for used A330 rather than leaving them grounded. MH should negotiate an option to release extra A333 should the oil prices goes up again in near future.

 

Those ex-US 333 are really old already. Quite a number of SQ 333 will become available from next year. Perhaps they should look at those instead. Seat configuration wise there aren't a lot of differences. Just that SQ is using RR on the 333.

Yes indeed. Those American Airlines A330-300 are from first generation, thus will be less capable than those new ones, but cheaper to acquire though and they are PW powered. SQ A333 would be a good alternative but if MH is to take ex-SQ, it will be quite a hassle, different configuration will messed up the in-flight experiences and different engines will no doubt raise maintenance cost. Unless the lessor can cut a very good deal with MH.

 

Not forgetting those ex-SQ A333 snapped up very fast by other airlines. MH should cut a deal now with the lessor.

Edited by JuliusWong

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Thanks for sharing flee. Unfortunately, it is behind pay wall.

 

Point to note: Adding another leased/bought non-standard A333s might be last thing MAB want to do to increase operation cost and mess up the in flight experience. We have seen this happened with previous MAS A333/A332 fleet. They can consider to contact lessor which has some end of production line order in place for brand new one. A333 eith PW-engines is least desired in the market, you won't find many airlines currently flying them except OZ, KE, DL, AA, and CZ. Maybe MH can consider AA's nine A333, AA is shedding them end of this year.

 

Seems like A321neoLR and B737 MAX 9 plan is still up in the air. 50/50 chance for either to happen

You just need to register to gain access.

 

First and foremost, MH is still assessing the possibilities. I think that any B739Max that they will be taking from their options will be used more for capacity than range. They are looking at the A321neo LR to supplement their A333 operations for long and thin routes.

 

As for >10 year old A330s, they did mention it is a buy or lease thing - all depends on whichever is cheaper. With the A330neo coming on line at the end of 2017, there will be many older A330s that will be released to the secondary market. MH is hoping to pick up some bargains here.

 

I think engines should not be a problem as most engine manufacturers are happy to sign you up for their maintenance packages, e.g. RR's TotalCare.

 

The A350s are expensive to buy/lease - so they will only be deployed on long haul routes like LHR/AKL or destinations with limited airport slots that need large capacity, e.g. PEK.

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SQ A333 would be a good alternative but if MH is to take ex-SQ, it will be quite a hassle, different configuration will messed up the in-flight experiences and different engines will no doubt raise maintenance cost

With 9M-MPP fiasco still fresh in mind, would take a brave soul to bet against them taking on said ex-SQ birds, re-engine them with PW burners, gut and reconfigure interiors to another 'beyond whatever' realm - them prematurely dump them back with lessors once price of black gold rises again :)

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Yes indeed. Those American Airlines A330-300 are from first generation, thus will be less capable than those new ones, but cheaper to acquire though and they are PW powered. SQ A333 would be a good alternative but if MH is to take ex-SQ, it will be quite a hassle, different configuration will messed up the in-flight experiences and different engines will no doubt raise maintenance cost. Unless the lessor can cut a very good deal with MH.

As mentioned, the aren't a lot of differences in the seat configuration between MAS 333 and SIA 333. As a matter of fact, the IFE system is the same. The seats in Y is of the same design as they are from the same manufacturer. Only Business Class is different.

 

The ex-US 333 are the same dinosaurs MAS dumped a few years ago. Don't think it is wise to get those unless MAS intend to put these ex-US 333 on flights as far as India and China only, though these ex-333 also can operate as far as the Middle-East and Japan but they just aren't as efficient as MAS current A330-300X. Besides, seat configuration wise the ex-US 333 is really different from MAS 333. Business Class is absolutely different. Economy Class is different too.

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I don't know where to put this post but somehow kinda shocked looking thru this video to see this kind of light load on KUL-KUA sector. Mostly this sector is hard to break even 75% load. Seems not profitable but has to maintain the route for certain reasons, maybe? I guess, for politician? err..

I flew to Bangalore once with a load lighter than this, but I guess they could have more load on the return flight.

 

I flew once in QR drom KUL to HKT on A330 with only 2 families on board with a total pax of 10. Felt like private plane..

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