A Possible Merger of MH and SQ

[Mohd Azizul Ramli 2]

Erm, I guess some of us mistaken the thread proposing the reincarnation of MSA. It is not what I meant.

 

MH and SQ could not be merged into one entity like MSA. After all, MSA splitted up because of the differences of vision/mission of Malaysia and Singapore in aviation AS AN ENTITY.

 

Like I said, the structure is like AF-KLM. AF and KLM still operate as separate entities, become rivals in certain sectors, pursuing their own dreams but they are owned by a company with shareholdings as stated in the thread starter. Both Malaysian and Singaporean 'dinosaurs' can be at helm. The Chairman can be alternated between a Singaporean and a Malaysian figure based on certain term of period.

 

Wouldn't it be a powerful airline company if MH managed to secure a membership with Skyteam where this Malaysia and Singapore owned company has present in both Star Alliance (through SQ) and Skyteam (through MH)? Although I am not sure whether it can be done or not (as AF, KLM and soon AZ are all in the same alliance), I dont see why it couldn't be done.

 

Believe it or not, if ASEAN were to become like EU (European Union), this could be a reality.

[Mohd Azizul Ramli 2]

From The Edge, 2 January 2008.

 

Meanwhile, Khazanah Nasional Nasional Bhd managing director Datuk Azman Mokhtar said Malaysia was “happy to compete” with its neighbours in the airline business, but it wanted to do so on good terms.

 

On the Asean Open Sky policy that Malaysia and Singapore have agreed to implement a year ahead of schedule yesterday, he said MAS had to be ruthless and focused.

 

“I think MAS is well placed but it is a tough industry. The long and the short of it is, in that kind of competition that we expect, (we have to see) how good you are at yield management, load management, how adept are you at doing alliances and alliances can come in many forms, for example the B-to-B (business-to-business) merger that KLM and Air France have done. They have done very well.

 

“On the other side, you have to be really ruthless and focused without eating away on the revenue side. MAS will have to find an equilibrium as we move from managing for survival to managing for growth,” he told The Edge Financial Daily recently.

 

Azman said MAS still had room to improve itself despite being one of the five airlines in the world with a five-star status in terms of superior products and service. (Six my dear, check your resources!)

 

“While MAS continues to do very well on things like cabin crew service, there are other areas that it could do better – on time performance and ground service – for example,” he said. (How about product?)

 

Azman said MAS had an opportunity to truly become a global contender, as there were still no clear dominating players in the global industry. (Ever heard of Singapore Airlines?)

 

“When you are in turnaround mode, you have to worry about your cash flow but when you are managing for growth and cementing yourself in a certain position… In how many industries can we be a significant player globally? Plantations is one of them, oil and gas is one of them. I would submit airlines is another area because the western airlines are not particularly strong.

 

“Our service is world class. For MAS, our financial management was bad, but it had improved tremendously,” he said.

 

* * * * *

 

Khazanah is in favour of a merger ala AF-KLM.

Edited January 3, 2008 by Mohd Azizul Ramli

[BC Tam 2]

..... Azman said MAS had an opportunity to truly become a global contender, as there were still no clear dominating players in the global industry. (Ever heard of Singapore Airlines?) .....

 

Actually, if one nit-picks and analyze the grammar used, it's in the past tense

Meaning the quote is generally in concurrance with some's opinion here that MAS has already missed the boat as far as joining any of the major alliances is concerned

As for the "clear dominating players" bit, I suppose the chap's idea of 'domination' could well be gahmen restricted monopolies that Malaysian GLC's are accustomed to

Edited January 3, 2008 by BC Tam

[Branden Ng 0]

i doubt that will happen unless Singapore rejoins the Federation of Malaysia. That is not likely to happen!

 

However, if SQ and MH merge - it will be back to the MSA days where SIN is the international hub and KUL is nothing more than a secondary hub.

 

Not good for Malaysia and MH

 

definately agree with your point!!

 

if that happen, the only 'advantage' i can see is government need not to build a brand new LCCT, because they use KLIA as a new LCCT!

[Kee Hooi Yen 0]

Actually, if one nit-picks and analyze the grammar used, it's in the past tense

Meaning the quote is generally in concurrance with some's opinion here that MAS has already missed the boat as far as joining any of the major alliances is concerned

 

 

Sometimes I wonder how many 'boats' does MAS or even KLIA has ?

[Izanee 0]

i think the last one sailed off 8 years ago when they turned OW down.

 

 

Sky Team is just not interested in MH .... In fact, no one is.

 

Other airlines are being snapped up left, right and centre.

 

Kenya airlines, malev, CSA, egyptair, air india, etc etc etc.

 

MH is an outcast just like Aer Lingus.

 

 

[KK Lee 5]

MH is an outcast just like Aer Lingus.

 

Like Ryanair and Aer Lingus, may be one day AK will take over MH.

 

 

[kelvin L 1]

One Day AK will be our National Airline.

[Mohd Azizul Ramli 2]

Northwest and Delta to merge.

 

Northwest CEO suggests the right merger deal could be beneficial

The Star

Sunday, January 13, 2008

 

MINNEAPOLIS (AP) - The chief executive of Northwest Airlines says his carrier could benefit from a merger - if it Is the right deal.

 

As the Delta Air Lines Inc. board met to discuss the issue, Northwest Airlines Corp. chief Doug Steenland sent an internal memo to employees Friday saying his airline's board and management team would analyze any deal carefully.

 

"Most importantly, we will carefully consider the impacts on our own employees and ensure that the outstanding employees of Northwest Airlines are included in this process,'' he wrote. "The right transaction could be of benefit to our employees, our shareholders and the communities we serve.''

 

Steenland did not say whether Delta had approached Northwest. Delta officials were mum on the outcome of that company's board meeting Friday.

 

According to two people familiar with the situation, Delta's board was expected to be asked to allow formal talks between Delta and Northwest and UAL Corp.'s United Airlines, with the idea that Delta would ultimately choose to combine with one of the two. The people spoke on condition of anonymity because of the sensitivity of the talks.

 

Steenland said Northwest, which emerged from Chapter 11 bankruptcy in May, is better positioned than most of its competitors to run profitably. But he said fuel price increases have run above the carrier's projections, making it harder to maintain the same level of profitability and reinvest profits.

 

And he warned that Northwest, based in suburban Eagan, can't control or predict what other carriers or airline shareholders might do.

 

"Doing nothing could be our worst alternative,'' he said. "If we wait to react to what others do we could be left with options that are undesirable or with no options at all. You can be sure that we are giving this very important issue the serious attention it deserves - and that we will weigh carefully the strategic implications of each course of action available,'' he wrote.

 

Steenland also said in his memo that Northwest management would continue its policy of not commenting on rumors or speculation about talks with other airlines.-AP

[Rozhan 0]

One Day AK will be our National Airline.

 

I think it IS already the National Airline of many average Malaysians. MAS is the businessmen's / businesswomen's airline, and the government's airline for gov staff to travel on taxpayers' money.

 

Once I was behind a group of women who I believe are gov servants. I heard them gossiping about a person who travels on Business Class and they were asking themselves if the person is layak (qualified, based on salary scale) or not to travel on business class. The women must have felt on top of the world to get to fly a 'glittering stars' airline on business class and feel other 'inferior' people don't deserve to sit at the front end of the cabin.

 

 

[Kenneth T 0]

Given that both Singaporean and Malaysian who are so proud of the own nationatiliy, I dont see the merger will works. Besides SQ is a Giant Airlines now and certainly they will ask for more shareholdings should the merger works. In my humble opinion, Malaysian is just unwilling to let go our our pride also. I think that's the more realistic view.

[Mohd Azizul Ramli 2]

Mergers news are in the air. I am glad they listen to me.

 

Government keen to sell stake in Malaysia Airlines, says CEO

 

The Associated Press

Monday, February 18, 2008

 

SINGAPORE: The Malaysian government is keen to sell a stake in Malaysia Airlines to ensure the company remain globally competitive in an industry which is fast consolidating, the company's chief executive said Monday.

 

If the government decides to offload some or all of its 69 percent stake in the national carrier, it could be offered to a strategic partner or to the market, said Chief Executive Idris Jala.

 

"I certainly believe that the government is very keen (to sell a stake). It'll do it for the right price at the right time," Idris told reporters on the sideline of a regional aviation conference here.

 

At the same time, he said the flag carrier is exploring the possibility of acquiring stakes in other airlines although this is still in the early stage.

 

He said passenger demand is expected to fall short of the industry's total capacity over the next five years, which will hurt airlines' profitability and push the formation of new alliances.

 

"We are looking at opportunities in Asia-Pacific region," Idris said. "I believe mergers and acquisitions are very efficient. It will reduce costs and we will be able to offer lower fares."

 

Last month, the carrier unveiled a five-year growth plan which calls for opening up more routes in Southeast Asia, China and India, fleet expansion and lower fares to boost its annual profit to as much as 3 billion ringgit (US$930 million; €634 million) by 2012.

 

Idris said the airline also aims to save as much as 1 billion ringgit (US$310 million; €211 million) this year through cost-cutting in procurement, maintenance and other related services.

 

"Our operations costs are up because of fuel prices and also wages are going up, we want to take out bad costs," he said.

 

The carrier rebounded from deep losses in 2005 and 2006 with a record profit of 610 million ringgit (US$189 million; €129 million) in the nine months to September 2007 following a successful revamp.

 

On fleet expansion, Idris said the carrier will likely decide by April whether to proceed with its order for six superjumbo A380s following a delay in delivery due to production problems.

 

"I'm happy about the latest development with Airbus. We are reaching a win-win situation," he said.

 

Last month, company officials have indicated the airline may stick to its plan to acquire up to 110 new planes, with a final decision to be made after the current quarter.

 

http://www.iht.com/articles/ap/2008/02/18/...sia-Airline.php

 

 

2008/02/18

MAS keen on M&A with other carriers to tide overcapacity

 

Bernama

SINGAPORE, Mon:

 

Malaysia Airlines is keen to undertake mergers and acquisitions with carriers in the Asia Pacific in the next five years as airlines in the region face overcapacity due to huge aircraft orders.

 

MAS managing director Datuk Seri Idris Jala today said that at the same time, the national carrier may collaborate or form alliances with low cost carriers, including AirAsia, in the future.

 

Speaking at a media briefing here today, Idris said overcapacity would result in declining margins, and in worst cases, some airlines could even go bankrupt.

 

“I imagine that in the next five years, some airlines wont survive,” he said before receiving the Phoenix Award, on behalf of MAS from Air Transport World, a leading monthly airline magazine. “And if they cannot survive, someone will acquire them. Hopefully we will be alive and kicking, and in a position to acquire some of those airlines which may collapse during that time.”

 

Although MAS is occupied with its Second Business Transformation Plan (2008-2012), Idris said it would grab any opportunity that may arise.

 

“Financing would not be a problem as we have various ways to do so,” he said.

 

Turning to the possible alliance and collaboration with budget airlines like AirAsia, he said, “We are open to it. Any opportunity that is good, we will look at it. I think competition between MAS and AirAsia is good as it drives both parties to continue improving ourselves. We are also interested in collaboration.”

 

He said collaboration could also be in the areas of Maintenance, Repair and Overhaul (MRO) as well as other backroom services.

 

http://www.nst.com.my/Current_News/NST/Mon...icle/index_html

[Ryan Soh 3]

Yes MAS will and probably need to merge or aquire a stake (or be aquired by someone else) in the near future to ensure survivability. BUT it definitely won't be SIA down south. No one is saying that it will lead to a formation of MSA again, but it will lead to MSA-like issues that caused the airline to go their separate ways in the first place.

 

Will this go down well with the Malaysians? Let's see what happens with the present BTP and see if IJ is successful is changing the mindset of even the grassroot level in MAS. After this happens, then we will be able to properly foresee where the airline is heading.

 

Air France and KLM are 2 very profitable entities and they both had strengths in each other that they could tap into. Unless SIA and MAS are on equal footing, any AF/KLM-like merger is pretty much out of the question.

[Mohd Azizul Ramli 2]

More on MH's planned merger.

 

The Star, Tuesday February 19, 2008

 

MAS open to M&As

By CHAN CHING THUT

 

SINGAPORE: Malaysia Airlines (MAS) will consider any possibility of consolidating with other airline companies as it transforms and reinvents its business model to meet future challenges.

 

Managing director and chief executive officer Datuk Seri Idris Jala said opportunities for consolidation should not be limited to mergers and acquisitions (M&As) only as there were many ways to do it. For example, airlines could undertake new business models, such as sharing backroom operations, reservation systems and forging joint venture in maintenance and repair operations.

 

“We have to look at what can be done in the future to move business forward. Consolidation will involve (not only) stake sale but also other forms of loose collaboration,” Jala told a media briefing yesterday.

 

He cited the partnership between KLM and Air France as an example of changing business model in the aviation industry.

 

The national carrier hopes to acquire stakes in other airlines and on a question as to whether MAS would consider consolidation with a low cost carrier, he said: “Never say never. We are undergoing our business transformation and we do not want to miss out on exciting opportunities,” Jala said. As for AirAsia Bhd, he said the low cost carrier had given MAS a sense of competition.

 

When asked if MAS would consider M&As or potential alliances, he said it would look into them when the opportunities arose but they could happen in the next five years, as it was looking at opportunities but had not made any firm plans

 

Although Jala was open to the possibility of the stake in MAS being diluted, he said it was a question for the shareholders, as the Government currently owned 69% of the airline. “In our discussion, the Government is certainly open to the idea of diluting. I do not know (when this will happen), but I certainly believe the Government will do so for the right price and opportunity to dilute,” he said, adding that this could happen in the open market or through a strategic partner.

 

Jala also disclosed that he was satisfied with the latest round of discussion with Airbus on the delayed delivery of the A380 aircraft. “We are probably nearing a point of win-win and we hope to finalise everything by the end of the first quarter,” he said. MAS was seeking compensation with other options that reportedly included proceeding with or cancelling orders. On the purchase of new aircraft, Jala said there was nothing to announce yet and he hoped to firm up everything soon.

 

Meanwhile, Air Transport World, a magazine covering the global airline industry, honoured MAS with the Phoenix Award in recognition of its remarkable turnaround in a ceremony last night. The airline turned itself around through a restructuring programme that contributed to record earnings for the first nine months of 2007, without affecting its reputation for excellent service.

 

Jala attributed the award to the hard work of the employees. “With the completion of our business turnaround plan a year ahead of schedule, we have embarked on the next journey, to transform MAS into a five-star value carrier and deliver the highest quality services at affordable prices,” he said.

[KK Lee 5]

 

Like proton, it is unlikely the gomen will permit foreign airline to take control of MH but they will use the endless negotiations to churn up MH stock price.

 

 

 

[Ryan Soh 3]

Jala also disclosed that he was satisfied with the latest round of discussion with Airbus on the delayed delivery of the A380 aircraft. “We are probably nearing a point of win-win and we hope to finalise everything by the end of the first quarter,” he said. MAS was seeking compensation with other options that reportedly included proceeding with or cancelling orders. On the purchase of new aircraft, Jala said there was nothing to announce yet and he hoped to firm up everything soon.

Cancel the A380 altogether, use that opportunity to convert the orders into many more A320s to use them as a replacement for the 737-400s. Unless some miracle happens, the A380 cannot fit into any of the airline's network presently, or in the near future.

[Mohd Azizul Ramli 2]

Again, merger talks for MH.

 

MAS mulls consolidation ahead of overcapacity

The Star, Thursday April 24, 2008 MYT 4:56:13 PM

By FINTAN NG

 

KUALA LUMPUR: Malaysia Airline System Bhd (MAS) is keeping a lookout for possible consolidations with partner airlines, as there are indications of overcapacity in five years’ time coupled with a tougher operating environment due to high oil price. MAS managing director and CEO Datuk Seri Idris Jala said the airline was only looking at possibilities now. "Its still early days and we haven't identified any airline," he said.

 

Idris said based on current airplane orders, there was an indication of overcapacity in five years with several airlines not being able to survive due to a tougher operating environment. "As overcapacity kicks in, consolidation in the industry will become inevitable and it'll happen very quickly, just like in the oil and gas industry some years back," he said.

 

Idris said it was "possible" that MAS would acquire another airline in the five-year period or beyond but that would depend on such factors as synergy value and whether the airline in question could complement MAS' business model. He said one way of looking at consolidation possibilities were the many tie-ups that MAS has with various airlines.

 

"There's no hurry because there's no overcapacity yet," Idris told reporters at a press conference after his address at the Airline Distribution 2008 forum. He said to remain competitive and to leverage on Malaysia's multiethnic identity, collaboration with airlines from China, India and Indonesia were desirable over the next 10 to 15 years. "We should leverage on these advantages since we've sections of the population with affinities to these countries," Idris said.

 

He said it was now tougher to reduce costs by another RM1bil this year due to the higher price of oil. "We're on track to reduce costs in certain areas and we're not in others," Idris said, adding that the airline had hedged 43% of this year's fuel based on US$89 per barrel and 13% of next year's requirement based on US$95 per barrel. He said the airline has no plans to revise the fuel surcharge and would only do so on a route-by-route basis.

 

Idris said the plans to acquire wide-bodied aircraft to replace the airline's 777 and 747 aircrafts would only be finalised before the end of the year. MAS had earlier finalised plans to acquire 35 narrow-bodied aircraft with options to acquire another 20.

[Pieter C. 5]

Again, merger talks for MH.

 

MAS mulls consolidation ahead of overcapacity

 

Yes, see also:

http://www.malaysianwings.com/forum/index.php?showtopic=8869

 

[Mohd. Helmi 0]

MH SQ hmm..

 

To take cue from AF-KLM, you have to remember that they have a common market, there's a sense of belonging to a Euro identity, it took 50 years or so from the treaty of Rome for them to achieve where they are today. But 50 years ago I really doubt the Dutch would be happy with a bunch of frogs merging with KLM, even now with pan European corporate identities taking root, there are some that are unhappy.

 

This all said, we aren't a common market with Singapore, we haven't put aside national differences to work together. The only way for this to work is if ASEAN became something more than political talking piece. Or perhaps if Singapore comes back to the sexy bosom of Malaysia, (didn't mentor minister mention the prerequisites for this to happen?).

 

Nice idea, SQ is a well managed and run company, something that MH needs to get back on track..... if it wasn't for politicians determining how the airline should be run, I doubt SQ would even be interested.

[Ryan Soh 3]

MH SQ hmm..

 

To take cue from AF-KLM, you have to remember that they have a common market, there's a sense of belonging to a Euro identity, it took 50 years or so from the treaty of Rome for them to achieve where they are today. But 50 years ago I really doubt the Dutch would be happy with a bunch of frogs merging with KLM, even now with pan European corporate identities taking root, there are some that are unhappy.

 

This all said, we aren't a common market with Singapore, we haven't put aside national differences to work together. The only way for this to work is if ASEAN became something more than political talking piece. Or perhaps if Singapore comes back to the sexy bosom of Malaysia, (didn't mentor minister mention the prerequisites for this to happen?).

 

Nice idea, SQ is a well managed and run company, something that MH needs to get back on track..... if it wasn't for politicians determining how the airline should be run, I doubt SQ would even be interested.

Hahahahaha... I see that this thread is still getting flogged. Nah... asking MH to "merge" with SQ is seriously going to be like trying to mix oil and water. No doubt we share the same history, but we have gone in such vastly different directions in terms of objectives and mindsets that it would be an uphill battle all the way.

[mohd sukri abd hamid 0]

no way man,ak will be our national airlines..you must be joking..hehe fucking low cost airlines

One Day AK will be our National Airline.

 

 

i thing korean air interested mh stake

MH SQ hmm..

 

To take cue from AF-KLM, you have to remember that they have a common market, there's a sense of belonging to a Euro identity, it took 50 years or so from the treaty of Rome for them to achieve where they are today. But 50 years ago I really doubt the Dutch would be happy with a bunch of frogs merging with KLM, even now with pan European corporate identities taking root, there are some that are unhappy.

 

This all said, we aren't a common market with Singapore, we haven't put aside national differences to work together. The only way for this to work is if ASEAN became something more than political talking piece. Or perhaps if Singapore comes back to the sexy bosom of Malaysia, (didn't mentor minister mention the prerequisites for this to happen?).

 

Nice idea, SQ is a well managed and run company, something that MH needs to get back on track..... if it wasn't for politicians determining how the airline should be run, I doubt SQ would even be interested.

 

[Lam 0]

Asking for a merger by SQ and MH is like asking Singapore to rejoin back malaysia. Singaporeans can never accept the " prince of earth " mentality and attitude

[Mohd Azizul Ramli 2]

To avoid further misunderstandings, let me stressed out that this thread was started last year before MH's BTP2 was revealed. So, some suggestions may not be valid in view of MH's new business direction. At the moment, this thread is being revived as a resource center for all articles relating to MH's plan to merge with another airline.

[mohd sukri abd hamid 0]

i dont think so

One Day AK will be our National Airline.

 

[BC Tam 2]

i thing korean air interested mh stake

QUOTE (Mohd. Helmi @ Apr 25 2008, 04:20 AM)

MH SQ hmm..

 

To take cue from AF-KLM, you have to remember that they have a common market, there's a sense of belonging to a Euro identity, it took 50 years or so from the treaty of Rome .....

 

Mohd Sukri,

You do realize KLM is not Korean Air ?

And we can assume you meant 'think' up there ?