PMB To Pay MAS RM650M in Compensation

[Ken K. Kour 0]

Wednesday July 12, 2006

 

PMB to pay MAS RM650m compensation

 

BY YEOW POOI LING

 

MAS commercial director Datuk Rashid Khan and Raja Nordiana Zainal Shah at the launch of the frequent flyer programme Enrich.

KUALA LUMPUR: Malaysian Airline System Bhd (MAS) will receive RM650mil from Penerbangan Malaysia Bhd (PMB) as compensation for the proposed early termination of the two parties' agreement for domestic business unbundling.

 

In a filing to Bursa Malaysia yesterday, MAS said the termination of the agreement was part of the rationalisation of the domestic airline services sector announced by the government earlier this year.

 

As a result of the proposed termination, all arrangements under the agreement would cease, including the cash flow arrangements whereby PMB would reimburse MAS all costs associated with the domestic business, while MAS would pay PMB all the associated revenue that it earns domestically.

 

PMB was initially required to give MAS 12 months' notice in writing to terminate the agreement but this was not possible since strict timelines were imposed on MAS and PMB for the completion of the rationalisation of the domestic airlines sector.

 

The airline said the compensation would be used to finance expenses incurred, which included the cost to right-size its workforce involved in the domestic operations due to the termination.

 

The proposed termination, subject to the approval of MAS’ shareholders and if necessary, shareholders of PMB, is expected to be completed by Aug 1.

 

Separately, MAS expected its newly-enhanced Enrich frequent flyer programme to have two million subscribers by July 2007, double the present one million, said general manager of marketing and loyalty programme Raja Nordiana Zainal Shah.

 

“It is a revenue-generating programme. Our Enrich partners alone generated some RM50mil in revenue last year. We hope to increase that to RM75mil in one year,†she told a press conference yesterday in conjunction with the launch of the new-look programme.

 

Nordiana said the revenue numbers excluded the value of ticket sales from Enrich members.

 

MAS manager of loyalty and frequent flyer programme Joanna Teh said Enrich members clocked in a total of 2.5 billion miles last year.

 

Its current membership of one million is spread over 240 countries, with the strongest in Malaysia at about 60%, followed by Australia, Singapore, Britain and the US.

 

Enrich has alliances in more than 4,000 locations worldwide, ranging from airlines, banks and credit cards, hotels and lifestyle partners.

 

Teh said about RM500,000 was spent on the enhancement of the programme, with the bulk of it on modifying the system. The online system, launched in August 2004, now comes with Enrich miles calculator and partner locator.

 

One of the enhancements in the programme is the introduction of the Enrich Silver membership, which focuses on economy-class travellers, while retaining the other memberships – Blue, Gold and Platinum. The new look of Enrich also comes with a new tagline – “Your ticket to a journey of luxury.â€

 

In conjunction with the launch, MAS is conducting a promotional campaign for all new members to participate in a contest, which offers 10 pairs of first-class tickets to four selected destinations. The contest runs to Sept 14. Details can be found on MAS' Enrich website.

 

 

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MAS gets RM650m for early end to deal

 

July 12 2006

 

MALAYSIA Airline System Bhd (MAS) has entered into an agreement with parent Penerbangan Malaysia Bhd (PMB) for an early end to the domestic business unbundling agreement (ADBU) sealed in July 2002.

 

“PMB will pay MAS RM650 million as full and final compensation as a result of the proposed termination of the ADBU,†the national carrier told Bursa Malaysia yesterday.

 

The proposed early termination is expected to be completed on August 1 2006.

 

The termination came less than 12 months short of the actual date.

 

MAS said the termination was in line with the rationalisation of the domestic airline services announced on March 27 this year.

 

“The Government expects the rationalisation to take effect from August 1 2006 after the implementation of MAS’ (own) rationalisation of its domestic business and AirAsia Bhd having the ability to operate in all the domestic routes, which includes the provision of interlining and connectivity for all the non-trunk routes,†it added.

 

The airline intends to utilise the compensation amount to pay for its expenses incurred or to be incurred arising from the proposed termination of the ADBU which include the cost to right-size its workforce involved in the domestic business.

 

“The termination will not have any material effect on the group’s net assets, gearing, earnings for the financial year ending December 31 2006 as it will be adequately compensated for the termination of the ADBU,†said MAS.

 

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MAS enhances its Enrich-ing programme

 

By Zuraimi Abdullah

zuraimi@nstp.com.my

 

July 12 2006

 

MALAYSIA Airlines (MAS) expects members of its Enrich frequent flyer programme to double to two million by July next year from close to one million now.

 

The national carrier also expects revenue from the programme to grow at least 50 per cent now that it has been given a new look.

 

MAS general manager of corporate marketing and loyalty programme Raja Nordiana Zainal Shah, however, declined to say how much revenue Enrich generates annually or its contribution to MAS’ group turnover, but that it receives subtantial revenue from member partners, which comprise other airlines, banks, credit card issuers, hotels and lifestyle retailers.

 

“We make about RM50 million a year from these partners alone, excluding money we receive directly from customers who buy tickets. With the enhanced Enrich, we hope to generate at least 50 per cent more revenue,†Raja Nordiana said before the relaunch of the programme by MAS commercial director Datuk Rashid Khan in Kuala Lumpur yesterday.

 

“This means that we could get RM75 million in revenue from our partners alone,†she added.

 

Raja Nordiana said members of MAS’ enhanced Enrich programme will now be able to earn Enrich points from different classes of fares and when they patronise the products and services of the 4,000 partner hotels, credit card companies, car rental providers and lifestyle retailers.

 

Another significant enhancement to Enrich is the introduction of the Silver tier, bridging the gap between the existing Blue and Gold memberships.

 

Platinum — normally reserved for the creme de la creme of high flyers, captains of industry and dignitaries — remains the highest tier. what i would do for one of those

 

Today, Enrich’s members are spread over 240 countries, with 60 per cent of them based in Malaysia and 14 per cent in Australia.

 

Raja Nordiana said membership numbers have been growing at an average of 23 per cent per year, well above the industry’s average of 18 per cent.

 

Enrich was introduced in 1999 after the split from Passages, the shared Asian frequent flyer programme made up of MAS, Cathay Pacific, Thai Airways and Singapore Airlines.

 

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Enrich Silver is an Elite tier that brings you to a whole new world of delightful privileges. Being an Enrich Silver member means being pampered with everything special - special treatments, special services, special offers, and you can also start accumulating your Elite tier bonuses. Advance to Enrich Silver, and instantly gain access to a wealth of greater privileges.

 

* Elite Tier Bonus

Earn Elite Tier Bonus when you fly First Class or Golden Club Class on Malaysia Airlines. Elite Tier Bonus is based on 25% of the Class of Service Bonus a member earns on a qualified flight.

 

 

* Priority Boarding

Enjoy Priority Boarding which allows you to pre-board the aircraft at the same time as First Class and Golden Club passengers, even when you’re flying Economy Class.

 

* Priority Check-in

Priority Check-In allows you to check-in for your flight at any available Golden Club Class counter even if you’re flying Economy Class.

 

* Telephone Check-in

Check-in by telephone and we will prepare your boarding pass for collection at the Golden Club check-in counter 30 minutes before your flight departs if you’re not carrying any luggage (1 hour with luggage) at selected airports.

 

* Priority Reservation Wailist

With Priority Waitlist, even if the flight that you requested is fully booked, you will be automatically upgraded to a higher priority on the waitlist.

 

* Priority Airport Standby

If you arrive at the airport without a booking, you only have to register at the standby counter and you will be given priority in the standby list.

 

* Excess Baggage Allowance

A 5 kg excess baggage allowance will be awarded to you when you travel.

 

* Access to Golden Lounge Privillege Programme

Enjoy access to the Golden Lounge by subscribing to the Golden Lounge Privilege Programme, which is exclusive to Enrich Silver members only.

 

 

 

To attain and maintain Enrich Silver, all you have to do is earn 25,000 Elite Miles or 20 Elite Sectors within a calendar year.

 

 

[Seth K 3]

Lots of improvment on Enrich but nothing more special

The 650m compensation has been around for days and I say MAS use the money properly.

Talking about MH, how PMB doing? are they profitable or such?

Edited July 12, 2006 by Seth K

[Ken K. Kour 0]

just to add, that Golden Lounge Priviledge program costs Rm1,900 per year, and allows you access to golden lounges everywhere, as many times per year as you want

[Sing Yew 1]

just to add, that Golden Lounge Priviledge program costs Rm1,900 per year, and allows you access to golden lounges everywhere, as many times per year as you want

 

Sounds very similar to QF's Qantas Club. It costs $ 685 per year for Australian residents and $ 625 per year for non Australian residents. They also have Life memberships priced at $ 4200 and $ 3820 respectively. Anyone can be a member of QF Club and it is not restricted to any particular Elite Status. Subsequent years membership can be renewed at lower rates.

 

The list of benefits of joining QF Club can be found here:

QF Club Benefits

[Andrew Yong 0]

That is crazy man!!!! So many years Mas was helping by PMB , just the missundestading on the contract please cool down and let some talk. By hte way MAS should pay PMB!!!!!

[Seth K 3]

That is crazy man!!!! So many years Mas was helping by PMB , just the missundestading on the contract please cool down and let some talk. By hte way MAS should pay PMB!!!!!

No worry, good goes around