Can MWings help MAS out?

[Arthur Van Straten 0]

Let me explain.

 

Recently we have seen various topics on MAS and how these affects MAS popularity and survivability.

Simple issues as the nasi lemak controversy to more serious issues as constantly losing money, too high overhead costs, management and union problems and too much government influencing.

 

It also came to my attention during the time I got involved with Malaysian Wings that regularly there are some very good comments and suggestions put up in this forum regarding MAS.

Apparently there is a lot of common sense knowledge and industry inside information available by the contributors to this forum.

 

So, why not give it a serious try and come up with all kinds of suggestions on how we, as MWings contributors, can help MAS and bring the airline to a well-oiled and profitable entity.

However, suggestions as, do away with the cronies, cut office staff in half, get a new CEO etc. are not the solutions we are looking for. It has to have more substance.

And I am sure, that with what I have been reading here on this forum in the last few years that more than a few people can come up with sense making plans and suggestions.

As I said above, no name calling and ridiculing, but constructive criticism and related solutions.

 

Who knows, that after a while, with the help of the moderators, we can present our findings and suggestions as an open letter to the MAS board and the relevant government officials.

 

Ok. If you like, let me kick this off.

 

1. Do away with all six A380 and sell them to the highest bidder. MAS has no routes and passenger loads to justify such capacity. They probably have been bought ten to twelve years ago with no other justification then being part of an illustrious group of companies, or worse.
2. Buy 7478i instead as these aircraft have a better salable capacity, have a better thrust-weight ratio and better extended range. As MAS has to survive there is no need to show off with the biggest toys for the boys.
3. Against all odds, I would say, sell the airline, privatize. Let the government keep 25 percent, let the buyer take 75 percent and let him run the show. In that scenario, MAS can still be the National Carrier and in the same time can be run as a commercial entity with its own profit and loss responsibility.

 

This is it so far for me.

Let’s see some other ideas or throw away mine.

 

Cheers

Art

 

[J. Suri 0]

Can be done...if the management read and take note....

[JuliusWong 0]

MAS should actually bought B77W since Day 1 when it was introduced as A380 was way too big to be filled all year round. Sadly the A380 was bought due to ego and "me-too" aircraft. Thai Airways and Malaysia Airlines are the only two current operators that find it hard to fill the seats, not without huge discounted tickets. The B77W will cut down the ASK but RPK will definitely increase. However this also depends on many other factors. We can go on ranting all days and nights, but MH management is ermmmm......ermmmm.......don't know lah.

[CH Teo 0]

1. Consolidate turboprops services into one brand and expanding it, positioning itself as a hybrid carrier.

Point: Get people to fly on secondary routes (be it in West Malaysia or East Malaysia), which does not justify a narrowbody jet service.

For East Malaysia RAS, no point for charging premium fares but no one want to fly and still putting on subsidy on it.

 

2. Explore smaller Jets option, introducing more linkage between points within Malaysia.

Point: There are ample of monopoly routes by Air Asia within our home front now, I mean load factor is there; the only thing is that offering the right products; or else I don't

think why AK group can keep on introducing more routes for the convenience of the public.

 

3. Re-established a low cost subsidiary.

 

4. Get the right planes to fly for long haul, instead of keep reducing international routes.

 

5. Restricting narrowbody fleets to fly on routes where the flying time is over 4 hours from point of origin, people usually go for widebody option should other points of

consideration when choosing a flight are almost the same.

Edited February 16, 2014 by CH Teo

[Timothy 1]

My 2cents :

 

1. Offer the domestic market to AirAsia for a nice sum, in exchange for their international routes out of KUL.

Rationale : AK domestic fares are catching up with MH , while MH international fares are dropping to meet AirAsia X. May as well play to your strengths. Also this wouldn't affect AirAsia JV's to operate within other countries given immediate connectivity to emerging markets.

 

2. Rural Air Service (Borneo) to introduce amphibious aircraft.

Rationale : Smaller aircraft for flexible schedules. Low cost & low impact compared to building an airstrip to connect every rural community.

 

3. Re-Invent the market.

Rationale : Strip out first class services and replace with "NetJets/VistaJets" copy ? With Malaysian companies now looking abroad for opportunities, jet charter could be the next thing for ASEAN. OneWorld links will still be there for anyone who prefers a traditional first class experience.

 

4. Singapore

Rationale : Plenty of shared history between SQ & MH. This could be the "Qantas and Emirates" story for us. Synergies with Point 3 above, and positions KLIA as a domestic/regional airport while Changi becomes the Europe/America/NZ gateway for Malaysians.

[Sandeep G 1]

Arthur - point 1 and 2 of yours are merge-able Sell A380 to Boeing to trade for B748i. But they'll be "sidelined" by Airbus for years to come!!!!

[J. Suri 0]

4. Singapore

Rationale : Plenty of shared history between SQ & MH. This could be the "Qantas and Emirates" story for us. Synergies with Point 3 above, and positions KLIA as a domestic/regional airport while Changi becomes the Europe/America/NZ gateway for Malaysians.

 

How about doing this like Air France-KLM or IAG (British Airways-Iberia)... so the parent called Singapore-Malaysia Airlines (somehow reminds me to the old JV Malaysia-Singapore Airways (MSA))...well, still two cents worth

[KC Sim 2]

Malaysia and Singapore could quite possibly look beyond whatever differences they have and create a single sky ... in the same way that New Zealand and Australia have tried before. Like J. Suri said, it is not unprecedented and could still be possible.

 

However, before that happens, MAS need to do lots of house-cleaning ... and return to a somewhat healthier P&L balance sheet. It still baffles me that MAS has not seen the benefit of a B77W fleet and was last year talking about ordering more A380s!! To me, it should be looking at B77Ws, B777Xs and B787s or their A350 family members.

 

And it also has to decide on a common branding for its main fleet which now consists of at least for variants in aircraft liveries, not including its subsidiaries Firefly and MASwings.

 

If nothing else, MAS management would do well to look to its fellow oneworld member JAL for a lesson on how to restructure for profitability. JAL has done a great job and could easily write a new textbook on Restructuring 101. Perhaps MAS should engage JAL as consultant for this purpose ... and having done so, do as advised and not always worry about "face" and "prestige".

 

I totally disagree with handing over domestic operations to AirAsia ... its domestic and regional feed is crucial to the success of its international operations. MAS just has got to learn to do the latter better.

 

KC Sim

[zamim 0]

Let me explain.

 

Recently we have seen various topics on MAS and how these affects MAS popularity and survivability.

Simple issues as the nasi lemak controversy to more serious issues as constantly losing money, too high overhead costs, management and union problems and too much government influencing.

 

It also came to my attention during the time I got involved with Malaysian Wings that regularly there are some very good comments and suggestions put up in this forum regarding MAS.

Apparently there is a lot of common sense knowledge and industry inside information available by the contributors to this forum.

 

So, why not give it a serious try and come up with all kinds of suggestions on how we, as MWings contributors, can help MAS and bring the airline to a well-oiled and profitable entity.

However, suggestions as, do away with the cronies, cut office staff in half, get a new CEO etc. are not the solutions we are looking for. It has to have more substance.

And I am sure, that with what I have been reading here on this forum in the last few years that more than a few people can come up with sense making plans and suggestions.

As I said above, no name calling and ridiculing, but constructive criticism and related solutions.

 

Who knows, that after a while, with the help of the moderators, we can present our findings and suggestions as an open letter to the MAS board and the relevant government officials.

 

Ok. If you like, let me kick this off.

 

1. [*]Do away with all six A380 and sell them to the highest bidder. MAS has no routes and passenger loads to justify such capacity. They probably have been bought ten to twelve years ago with no other justification then being part of an illustrious group of companies, or worse.

 

Passenger load to LHR and CDG is consistently high, even on MH4. The problem is the yield. Surprisingly, MH 72 to HKG also showing high load factor but not MH73 though.

[nrazmoor 0]

MH need to introduce Premium economy for them to increase their ever declining yield. Then refurbish their business class seats to be on par with the likes of CX/SQ, only then they can charge premium for their J class seat. Just look at CX/SQ peoples still buying their J class even though their prices quite high since their hard product a top notch.

 

And yes, i think MH need to find a foreign partner, my pick will be IAG. Offer them like 40% shares and use KUL as their hub and help to give feed for MH Australia/regional network. Then maybe BA can start MAN/EDI/GLA/LGW - KUL using their 787.

[Arthur Van Straten 0]

The first results are in.

And as I had predicted, there are some unconventional suggestions. Here is what we have so far.

• Sell the A380’s
• Privatize the airline
• Consolidate turboprop services into one brand and use on sectors not suitable for jets.
• Use small jets to compete with Air Asia on domestic routes
• MAS introduces its own LCC (wow)
• Sell domestic services to Air Asia and take back international routes. (wow)
• Introduce amphibious aircraft in to Rural Air Services
• Do away with selected First Class and offer Bizjet services instead (cunning plan)
• Team up, alliance, with SQ. Resurrect MSA. Single sky concept, share airports) (big wow)
• Get JAL as consultant.
• If you privatize, get a foreign partner

As you see, a good variety of opinions, some better and more revolutionary than others, but still out of the box thinking.

Just a thought, if privatizing could be in the works, it does not really matters where the money comes from, it matters most which team will run the venture. And if that team would be non-Malaysian, so be it. MAS has to become an independent money making 5 star airline. That is the exercise.

 

Let’s see if other ideas and suggestions are coming. At the end we could make a poll to select the most promising ideas.

 

Cheers

Art

[BC Tam 2]

• Introduce amphibious aircraft in to Rural Air Services

Can I suggest that is a non-starter ?

Many, if not most, of the communities the RAS is supposed to service are located up in the hills where amphibious aircraft are ...... well, rather redundant to put it bluntly

 

(sorry Timothy )

Edited February 17, 2014 by BC Tam

[leon t 0]

before any of the recommendations to its flight ops - the main thing is to get rid of all the "leakages" in MH and all associated with graft and "favoured" suppliers and contractors.

Otherwise - whatever good recommendations will come to nought ifsuch "leakages" persists

[Cheng Long 0]

Can I suggest that is a non-starter ?

Many, if not most, of the communities the RAS is supposed to service are located up in the hills where amphibious aircraft are ...... well, rather redundant to put it bluntly

 

(sorry Timothy )

 

If anything, will need Osprey..

[BC Tam 2]

If anything, will need Osprey..

Yeah, wonder if the US marines can spare us a few ?!!

[Arthur Van Straten 0]

@BCT.

As for amphibious, point noted.

Your other ideas?

 

@ leon t

We know all that. Thats why i said in my opening remarks, no bashing of CEO or management and cronies.

If we have the position that nothing can be done because of the above, than we might as well keep mum, and accept being downgraded to zombies.

Lets try to be constructive regardless.

 

And, where is flee?

 

Cheers

Art

[Rashdan Radzi 0]

On top of the hardware already being discussed, revisit core values that once instilled a clear sense of pride among the crew to be part of MAS and from which we consistently got great service.

 

Any airline can offer money, but the sense of being part of your airline - your flag carrier - gives you a distinctive edge in terms of service.

[Arthur Van Straten 0]

Could not agree more. "esprit de corps" And if that is clearly lacking, it has to be restored. Passengers have a nose, eyes and ears for that.

I will put it on the list.

 

Cheers

Art

[Isaac 0]

For starter, the exclusive contract signed with Brahim Catering (then LSG Skychef) should be declared null and void! RM20 for a nasi lemak ? RM3.20 for a stick of satay ? That's insane! I bet even Cathay Pacific Airways doesn't pay that much for their meals! And living cost in HKG is far higher than that of ours!

[Arthur Van Straten 0]

@ Isaac.

 

As i mentioned earlier, no point in bashing CEO, or managment and cronies. We know all that.

What can be done, by thinking out of the box, is the exercise.

 

Cheers

Art

[Isaac 0]

@ Isaac.

 

As i mentioned earlier, no point in bashing CEO, or managment and cronies. We know all that.

What can be done, by thinking out of the box, is the exercise.

 

Cheers

Art

But how is suggesting them to get the contract signed with Brahim Catering nullified considered as bashing the CEO ? The current CEO was not involved in the signing of that controversial contract. MAS can buy all the new, fuel efficient planes they want but as long as MAS continue to pay RM20 for an Economy Class Nasi Lemak, MAS will always be at a huge disadvantage here compared to its peers.

[Arthur Van Straten 0]

Well, there we are.

 

As many other people. I also was shocked by the 1, 17 Billion loss MAS has produced in 2013.

I thought it would be less, much less, and I consider myself an industry insider, hah, shame on me.

Combined losses in the past few years are now close to 4 Billion and a stock price not even comparable to penny stock.

And then talk about buying 100 more aircraft, to be paid by what and how?

 

So, also for me it is time to throw all good intentions out of the window and propose only these solutions.

• Let it go bankrupt and start again with a clean sheet. (politically not feasible I fear)
• Sell it off to SQ for one ringgit, combine airspace and airports and let SQ run it. (Politically not feasible I fear) Do not sell it off to Air Asia, leave them alone and let them do things they are good at.
• Sell it off to a new investor, wherever he comes from, let them run the show and give the government a 25 percent profit share, but without executive powers.
• Pro, you still have MAS as a National Airline, the investor wants to make money hence he will contract aviation management talent and reorganize the whole company in and out without fear or favor, and MAS is still visible in the world as a Malaysian carrier.
• Con, the Malaysian government has to eat humble pie, some ”brilliant” businessmen will smell the coffee and a few egos will be brushed. (Maybe this is politically palatable).

Thank you all for responding earlier in this topic but it is time to close. The dice has rolled.

Cheers

Art