MAS to launch biggest separation scheme today

[Naim 6]

 

Monday May 22, 2006

 

MAS to launch biggest separation scheme today

 

By B.K. SIDHU

 

ONE of Malaysia’s biggest mutual separation scheme (MSS) for employees will be launched by Malaysia Airlines (MAS) today, to shed about 6,000 employees from its stable of 23,000 employees.

 

It is learnt that it would cost the airline about RM600mil, which the airline could fund from its coffers.

 

It will be an attractive package where each employee will receive about one to three months’ salary for every year of service with no cap on the number of years.

 

This is the biggest MSS in corporate Malaysia as no other organisation has carried out a scheme to shed so many workers.

 

Sources told StarBiz that MAS managing director Idris Jala would launch the MSS today and employees had two weeks to revert to the management of their decision.

 

The management will decide the MSS candidates in two weeks.

 

The final date for employees under the MSS to leave the organisation is July 31.

 

All MAS employees who are Malaysians, confirmed and permanent staff of the airline (including those with the airline’s domestic operations, which is being rationalised) are eligible for the MSS.

 

Contract workers and foreigners under MAS’ payroll are not included in the scheme.

 

Sources said part of the package also included a one-off medical payment, one-off long service loyalty payment and one return ticket to any destination that MAS flew to. However, employees nearing the retirement age who opt for the MSS would not be eligible for the MAS retirement package, the sources said.

 

MAS had earlier launched a business turnaround plan to return the airline to profitability, and it is on a drive to manage costs, rationalise its operations and improve efficiency.

 

For the financial year ended Dec 31, 2005 (nine months as the airline is changing its year-end from March 31 to Dec 31), MAS reported a loss of RM1.26bil on revenue of RM9.08bil.

 

http://biz.thestar.com.my/news/story.asp?f...55&sec=business

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[Tharan G. 0]

well...this gives the chance to more pilots who are bonded with MAS to leave mas for better paying airlines.

[Naim 6]

Follow-up story.

 

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May 22, 2006 19:28 PM

 

MAS Expects To Complete MSS By July 31

 

PETALING JAYA, May 22 (Bernama) -- Malaysian Airline System Bhd (MAS), which announced details of its mutual separation scheme (MSS) Monday, expects to complete the exercise by July 31, 2006.

 

"We are committed to conducting this right-sizing exercise in the most compassionate way possible by working out the terms and conditions which are attractive," managing director, Idris Jala, said in a statement here Monday.

 

Idris said throughout the exercise, the airline would ensure that the customers' needs are taken care of.

 

"We have tasked key executives to ensure that they are no service disruptions and no compromise on safety.

 

"The MSS will fast-track MAS intention to right-size its workforce a year ahead of the schedule outlined in its three-year Business Turnaround Plan," Idris said.

 

MAS will receive compensation from its parent company, Penerbangan Malaysia Bhd, for the termination of the agreement for domestic business unbundling.

 

Under the terms of the contract, MAS is required to give 12 months' notice or be compensated in the event of a termination.

 

The cost of the MSS will be funded by the compensation.

 

Since the MSS is a voluntary exercise, MAS expects the pick-up rate from the staff to be between 3,000 and 5,000.

 

Over the past few weeks, MAS has had numerous discussions with employees union and association on the terms and conditions of the MSS.

 

The MSS will be extended to all permanent and confirmed employees in Malaysia and locally recruited Malaysian staff posted overseas.

 

A total 18,027 invitations will be sent out today and the staff have until June 7, 2006 to decide on the offer.

 

Successful MSS applicants will receive payments based on their current monthly salary ranging from one month to three months for every year of service, a one-off medical benefit payment of RM2,000 and buyback of all unutilised staff leave.

 

In addition, the staff's spouse and dependants will enjoy 12-month hospitalisation benefits from the date of separation and one complimentary privilege travel air ticket.

 

-- BERNAMA

[Tony 1]

well...this gives the chance to more pilots who are bonded with MAS to leave mas for better paying airlines.

unlikely, take a look at this article.

 

MH is already in shortage of pilots and engineers, and MSS targets functions support-role staff.

[Edwin P K 0]

unlikely, take a look at this article.

 

MH is already in shortage of pilots and engineers, and MSS targets functions support-role staff.

 

The staff that is to be released would normally be the admin staff, pilots have got nothing to worry about.

[Nizam 0]

Correct me if I'm wrong ..

 

I just heard that the 1st badge will receive MSS are pilot and engineer netx week ...

[Tony 1]

Well, if that's some sort of info from internal sources, then I might be wrong - I follow the published news.

[zealich 0]

sad to see such a good airline becoming like this..

[Tony 1]

From management's point of view, this (restructure) will make a good airline. If you look closely and compare the employee base of MH and SQ, you see the difference immediately when you flip to the "Employee Productivity" page. SQ's staff produce twice as much output compared to MH. MH has too many staff - some must go, regardless.

[Edwin P K 0]

I totally agree, it's about time those passengers to be offloaded, we can no longer offfer such luxury! Anyway, having these passengers onboard will continue to bleed the company, so this is the way to go.

 

[Tony 1]

Note: the "Employee Productivity" page of MH and SQ is in each airline's respective annual report.

[zealich 0]

agree...but y they were employed in the first place? They didnt count how much money they have before going to Tesco? Buy so many add on staff then when want to pay at the counter, only notice that Oh dear only have $10...

[Tony 1]

Unfortunately they don't. They've hired more "friends and relatives" then to "capable and competitive employees" - just like any national airlines would do when they're owned by the government.

[KK Lee 5]

 

RM600 millions compensation for 6000 employees mean RM100000 per person?!

 

An opportunity for the Government to top up funding to MH.

 

 

[Edwin P K 0]

Of course, the higher ranks or those unnecessary general manager will get more out of it than anyone else. Who's having the last laugh? Excessive GMs and Managers! It's actually a good deal for them to get 1 - 3 months for each year of service.

 

More bleeding!

 

Separation scheme to cost MAS RM850mil

 

KUALA LUMPUR: Malaysia Airlines expects between 3,000 and 5,000 of its staff to accept its mutual separation scheme (MSS), which the airline considers to be a better compensation plan than what many other big companies have offered.

 

Together with the domestic route rationalisation exercise with AirAsia, the cost of the MSS is projected at a maximum of RM850mil.

 

“In our mind, we have to do better than what has been out there,” MAS managing director Idris Jala told the media in announcing the MSS yesterday.

 

“There are many things that need to be done to turn around the company, and this is one of them,” he said.

 

The MSS, which is targeted for completion at the end of July, will be the largest in Malaysia and will give the highest compensation to its lowest-paid employees and those with the longest tenure of service.

 

Non-local employees at its overseas offices will be retrenched.

 

Employees whose MSS application is approved will receive a payment based on their current monthly salary ranging from one month to three months for every year of service.

 

Apart from that, MAS will give a one-off medical benefit, buy back all unutilised leave, give a free air ticket to be used by the end of the year and give laid-off staff hospitalisation coverage for a year from Aug 1.

 

Idris said that even if the acceptance rate was poor, it would remain a one-time offer and MAS would not lay off any more staff.

 

To help employees who will leave MAS via the MSS, Idris said, the airline was in talks with Qatar Airlines for placement of its staff.

 

MAS was also discussing with the Human Resources Ministry and external parties on advisory and counselling services.

 

Post-rationalisation, Idris said, MAS would redesign its work processes and would require its employees to work harder and adhere to the performance management system.

 

He said hardworking and productive workers would be rewarded.

 

Idris also said that MAS would be funding the MSS with the compensation it would receive from Penerbangan Malaysia Bhd for the unbundling of its domestic routes.

 

He said MAS was still targeting to cut its losses to RM620mil for its 2006 financial year.

[Tony 1]

Sounds like a real distress and heading towards kamikaze, ey?

 

I'm more interested in how MH is going to record RM50mil profit by 2007 and RM500mil by 2008. Donation?

 

Keeping in mind that when it disposes routes, not only does it cut costs, it also reduces the ceiling for revenue! I'd love to have a peek at their calculations...

[zealich 0]

I think their calculator have some batteries problem..

lets try this.

 

RM850,000,000/6,000=RM141,666

 

not logic...

[Tony 1]

worse than that, zealich.

 

some papers are saying MH expects 3,000-5,000 employees to accept MSS. MH claims to be spending RM600mil-RM850mil on MSS.

 

so max per person = RM850mil/5,000 = RM170,000

[Pieter C. 5]

Published today on ATWonline:

 

Malaysia Airlines said 4,200 employees applied to participate in its Mutual Separation Scheme, a buyout program offered to more than 18,000 staff as part of its Business Turnaround Plan (ATWOnline, March 6). MAS will see an additional 1,171 employees retire this year. "Based on the profile of the applicants, we are looking at achieving our objective [MYR300 million ($81.3 million) in savings] in August this year by releasing around 3,000 employees in the higher salary bracket," MD and CEO Idris Jala said. The carrier will notify applicants of their status by the end of this month.