MAS BTP

[Jannar T 0]

Malaysia Airlines BTP

 

 

As a new employee in MAS, I spent the last few weeks in MAA going through many publications on the much hyped about Business Turn Around & Transformation Plan. The plan looks clever & at the moment seems to make a lot of sense. Let’s see how the story unfolds

 

When Idris Jala & his team took over, the company had poor sales, high cost, and were loosing out to competition. The competition, mainly SQ had newer a/c, with better seats, better in flight entertainment, better service & were really kicking MAS ass.

 

How to remain competitive, MAS did not have cash for new a/c, new seats, better in flight entertainment, food contracts with caterers were signed, changing them big compensations, it all boiled down to not enough money.

 

I like the way MAS begin its business diversity drive. They new they could not compete in the passenger market. They begin to look for alternate means to reap in much needed revenue. The solution was E & M, human capital development & freight.

 

E & M is now making money, a lot more then before. Many a/c are being refurbished (mainly 747-200); any many foreign airlines conduct maintenance in subang now days. MAS always have had the man power & facilities to be a regional E & M power house, they seem to be in write path. Their good service/safety record has helped MAS E & M to brand them as a reliable & cost effective. E & M is now conducting maintenance, refurbishment, & repairs for many airlines.

 

Human capital devolvement. Everyone has heard about how good mas cabin crew are. They are good because they are trained well. MAS has used this to market their cabin crew training. A few airlines (From India,China, The middle east & Africa) are now having their cabin crew trained in MAS in Malaysia or in their respective countries. E & M has also started training other airline personal. Our simulators, especially the F-50 & 737 are being leased out to foreign airlines. There are only 3 F-50 sims still operational in the world. 737 sim are being used a lot by the All Nippon Crew.

 

MAS cargo has also been expanded & is profitable. Its common knowledge that MAS 74 cargo fleet is more profitable then passenger configuration.

 

The thing is, these measures required very little investment from within but reaped in a lot of money. Money from secondary businesses is now being channeled for new a/c, with better seats & in-flight entertainment. This is how MAS plans to be competitive in the future, its stand that refurbishing old a/c would only cost to much because in the end you would have to buy new planes anyway, weather the storm, & when you can afford it, go out & get new planes & get ahead of the competition. Concentrate on what would improve service but not cost to much, cabin crew, MH hospitality & many others.

 

They raised money from within the company, found a competitive edge, & now have money to take the fight to the passenger industry that they were falling behind.

 

[Ruiz Razy 1]

NOT forgetting increasing fares and compromising the meal service. Not just in EYCL, even in the premium GCCL are now being served with just cold sandwiches instead of the hot savories for Peninsular Flights. ; Golden Lounge @ JHB has been shut and yet we are still paying the same fare.

 

Common have some sense! Business travellers do travel busineess class for the service in the air and on the ground ; definately not to Sedekah MH!

 

[mokhzani 0]

Is he on the take?

[BC Tam 2]

I like the way MAS begin its business diversity drive. They new they could not compete in the passenger market

This is the part that really sent sent shivers down my back !! If that is still the sentiment and (with the benefit of hindsight) we see the measures now in place to rectify (if that is an appropriate term to use here) the situation, we can predict with quite good certainty where our national airline is ending up

 

'Business diversification' is perhaps a necessity imposed upon MAS under prevailing circumstances. If and when the bank balance allows, do not be surprised if these 'diversifications' are then sold off to interested parties in the name of 'Concentrating Efforts on Core Activity' It is to be noted that outsourcing has become norm rather than the exception

 

Having said that, credit where credit is due - Datuk IJ has kept MAS afloat thus far (and if the mainstream media is to be believed, even thrived) It's longer term prospects remain in uncharted waters, though survival is of course assured ( )

 

 

They raised money from within the company(1), found a competitive edge(2), & now have money to take the fight to the passenger industry that they were falling behind(3)

(1) how certain are you it was wholly from within ?

(2) what competitive edge and against whom ?

(3) has the freefall been halted ?

 

[Ryan Soh 3]

Michael, is that you?

[Sandeep G 1]

The following article (and front cover story) appeared in Flight Global "Airline Business" Magazine - 19/03/2008

 

Idris Jala: Transforming Malaysia Airlines

By Nicholas Ionides

 

Idris Jala joined Malaysia Airlines with a remit to turn the carrier's burgeoning losses into profits. That goal has been met but there remains a long road to reinvention

 

At this time two years ago, Malaysia Airlines was in deep trouble. It had just reported the biggest-ever loss in its history. Today, posters are going up at its offices with the words "Record Profits". It is a remarkable turn of events for an airline that not so long ago warned it was likely to fail without an immediate and sweeping restructuring. But chief executive Idris Jala is cautioning staff that while they should be celebrating successes, the restructuring effort is far from complete. Deeper, structural change now needs to take place to turn MAS into what he calls "the world's five star value ­carrier" - essentially a high-quality airline with the cost base of a budget operator.

 

 

 

"We have done a successful turnaround, no doubt about it, and it's clear we've done it ahead of schedule. We were supposed to have done it in three years and we did it in two," Idris told Airline Business at his office near Kuala Lumpur's Subang airport days after ­reporting the record-high net profit of 851 ­million ringgit ($267 million) for 2007.

 

New attitudes - Printing money

Celebrating achievement has been an important part of the turnaround effort at Malaysia Airlines, helping motivate the workforce to progressively get rid of the "silo mentality" between departments.

 

One example Idris gives is of the crew rest areas in the carrier's long-haul aircraft, which are essentially containers in the cargo holds. For years the cargo department had been asking that on short-haul flights they be removed to free up space for freight, but other departments said it was not possible because the same aircraft were also used for long-haul services. "This debate went on in the company for five years. So we got everybody in a room and within one week they concluded the answer: ring-fence the aircraft and put in a new schedule so these aircraft are used solely for short-haul routes," he says. "We took out the crew bunk and used it for cargo, and we were printing money from day one."

 

 

 

"I now look at it and say we have successfully turned around the company, but the future is a tough world and therefore we cannot run the business as we are today," says Idris. "Today is not a time for declaring victory. This has only just begun. Now we have to assault a new mountain and we have to reinvent ourselves. So we are saying transformation is the word. We have moved from turnaround to transformation."

 

His offices are themselves a symbol of how much things have changed since he was brought in by the government from oil giant Shell to turn the national carrier around. When he joined, the head office of MAS was a building of its own in the centre of Kuala Lumpur and one of his early moves was to sell it. It was not a popular move.

 

"When I decided to sell our headquarters there were a lot of people jumping up and down. It was very emotional. People said this is the brand, it is right in the city, it belongs to Malaysians, how dare you go and sell this building," he recalls. "But I told them very frankly, we are burning 150 million ringgit in cash a month, and we are selling the building for 130 million. That is cash to cover us for 20 days. If you can tell me how I am going to raise that money, please tell me. Our backs were against the wall and we had to fix our business otherwise we would go bankrupt. It was better to be emotional about the airline rather than the building."

 

Idris, who turns 50 this year, says that once the true nature of the carrier's dire financial state was made clear, attitudes quickly changed. As with many other state-owned companies, politicians and the general public were not accustomed to hearing of doom and gloom. But sugar coating the negatives is not Idris' style. He is blunt in his predictions of troubled times ahead, believing that as an ­executive he has a responsibility to always prepare for the worst.

 

Idris won a reputation at Shell as a corporate "fix-it" man, known for turning around problematic operations and making them successful. He readily admits he was happy there and did not seek out the MAS job, but ultimately saw it as a challenge and in some ways as a national duty. "One of the reasons why I agreed to come - and I didn't apply for the job - is because the government launched their government-linked company transformation programme. As I was being wooed to come in and join what they called a revolution, I wasn't convinced they were serious," he says. "I was invited to attend the launch event and I sat in the crowd and listened to the proceedings. The prime minister launched it, the finance minister was there, all the head honchos of the government-linked companies were there. As I sat through the launch I became convinced that these guys meant business. For the changes in the top they were putting in professional managers rather than ex-civil servants to do those jobs.

 

"The starting point was to feel that the time was right, that the winds were blowing in the right direction. But the most important thing was the prime minister came to introduce himself personally at the event. What he said, and it was very important, was that the government will not bail Malaysia Airlines out, that it must fix its own problems." Idris was immediately convinced the time was right the political will was there to transform the organisation and this meant he would have the support to take tough action. He says he loves "corporate adventure", and with the government refusing to provide a bailout "it helped me sell the need for change". He adds: "More importantly, on the other flip side was the deal with the government. The fact that they didn't give us any help in that sense, they had to then give us the autonomy. That's fair and square. If you give us a loan it is fair that you interfere. If you don't give us a loan it is fair that you allow us to fix our problem."

 

Idris started at MAS on 1 December 2005 and that morning presented what he called a turnaround "roadmap" to the board. He then met with the transport minister, the prime minister, and finally around 700 MAS employees. He told them that over the next 100 days his roadmap would be fine-tuned and developed into a formal Business Turnaround Plan. The plan, now known as BTP 1 following a new strategy document, was made public in February 2006 as MAS reported a net loss of 1.3 billion ­ringgit for 2005 - in fact only for a nine-month period as the carrier switched to calendar-year reporting. The document is blunt, warning ­repeatedly of the likelihood of failure without immediate change. But its overall message is that a genuine turnaround was possible.

 

"When we published it nobody believed we could do it," says Idris. "The share price did not move for six or nine months. Everybody felt that we could not do this." But the industry outsider has, at least to date, proven the doubters wrong. Cuts have been dramatic: dozens of routes have been dropped thousands of jobs have been eliminated and essentially every area of the organisation has been overhauled, enabling the airline to ­reverse its losses and return to the black. A ­no-nonsense approach was also taken to malpractice with a whistle-blower programme.

 

Idris says MAS had three main fundamental problems at the start of the turnaround: it was desperately short of cash was losing money in large part because yields were low and staff were demoralised and unmotivated, which resulted in productivity levels well below those of competitors. A few years earlier a financial restructuring had in fact been carried out that was initially hailed as a success, but by the time Idris joined it was clear that it was more a restructuring on accounting terms through asset sale and lease-back deals with the government and did not get to deep-rooted problems within MAS.

 

With no in-depth understanding of the airline business, Idris focused on what he knew best - the profit and loss statement. His team immediately got to work raising much-needed cash, in part through sales of some of the carrier's few remaining assets, and focused on stemming the losses as quickly as possible.

 

The problems at MAS were clear to many, but few were willing to admit them and take action. Idris points to the carrier's network as an example, with most of its routes unprofitable over the 12-month period up to the time that he joined. On the international side, 66 were unprofitable and just 48 were profitable, with too many services being operated out of "social obligation". On the domestic side 114 were losing money and only four were profitable. MAS was not exposed to the domestic losses as those services were operated on behalf of the government for a fee, but bleeding so badly in a core area of the business did little to create a culture of fiscal accountability elsewhere. Over the next few months MAS carried out several rounds of extensive international route cuts, in part as it eliminated point-to-point services from secondary Malaysian destinations and fed them through Kuala Lumpur International Airport. At the same time it negotiated new codeshare ­agreements with other airlines.

 

A deal was then agreed with the government and low-cost carrier AirAsia under which MAS dropped services on dozens of domestic routes to focus on trunk routes. It was later able to cut its workforce by several thousand people through a voluntary separation scheme and eventually took back P&L ­responsibility for domestic services - ­excluding subsidised turboprop operations in less-developed East Malaysia.

 

With the main goals and profitability targets of BTP 1 achieved a year early, MAS has moved to the next phase, which is a three- to five-year "transformation" that Idris says is necessary for MAS to remain competitive in an increasingly challenging operating environment. "My father used to say to me as a kid that the best way to think about life is always to aim and plan for the best, but assume the very worst. And that has been my motto in life. Always think that life is going to be tough, and the competition is going to be much better than you are. You over-prepare so you build a boat that will weather the storm. If there is no storm you will do very well but if there is a storm you will still not capsize," he says.

 

"In business you must have what I call a stand-based future. You must stand in the future and look to manage the present. You don't manage the future from the present. You picture what it looks like and when you become convinced that you like that world then you say you will manage the present."

 

At the core of the just-released BTP 2 strategy document is a message that MAS must be able to offer competitive fares by achieving a cost base similar to those of low-cost carriers, while retaining its full-service cabin offerings. Idris recognises that many will say it is not possible to achieve this ideal scenario, but he firmly believes it is doable for MAS. "We cannot continue with our current business model and survive in this turbulent world. We will sink," he says. "So me and my team sat down and asked the question, what would the airline look like that could survive? We came up with the vision that the airline that will survive in our market is this thing called the five star value carrier. We want to make sure our quality of product is really up there, but reduce our costs so that we can give affordable fares. That is our vision, and we believe that when we reinvent ourselves to become that, that is what will weather the storm." He says employees have been buying into the concept and are far more motivated now than when he joined. Productivity - so low for so long - is continuing to improve, yields have risen significantly and underlying costs have been slashed. However, another 1 billion ringgit in cost savings needs to be found, says Idris.

 

A particular concern is overcapacity in the industry. Idris says MAS will not get caught up in it and will expand at the Asia-Pacific region's forecast annual traffic growth rate of roughly 6%. MAS does have stretch targets and he hopes it can grow more aggressively, but much deeper change is needed first.

 

Coming soon is a long-awaited fleet revamp, starting with narrowbody orders to replace ageing Boeing 737s. Later in the year MAS intends to order widebodies, but again largely for replacement with options for growth. Already on order are turboprops from ATR for subsidised East Malaysian operation MASWings and new subsidiary Firefly, which it expects to develop into a low-cost operator to face rivals as liberalisation progressively takes hold in Southeast Asia. MAS already faces intense competition at home from Asia's largest low-cost airline, Kuala Lumpur-based AirAsia. It has been growing aggressively on short-haul routes and recently a sister carrier, AirAsia X, began operating long-haul services. AirAsia and MAS have not exactly been on good terms over the years, but Idris sees a day when they may co-operate.

 

"The winners in a competitive environment will be those who know how to compete and collaborate at the same time. If you strike the sweet spot between how far you compete and how far you collaborate it is a winning proposition," he says. "There are a lot of areas where we can work together. Training pilots, for example, and MRO. The net result is we could both reduce costs, but then when it comes to customers we compete. Have we had discussions with them? Yes and no. They have sent some of their aircraft to us but we have not had a long-term deal so we have not quite been successful just yet. But I can see the possibility and I am open to it."

 

Joining a global alliance is seen by Idris as another likelihood for MAS in the near future. He does not identify a preferred alliance, but most observers favour SkyTeam or oneworld. Star is considered unlikely as Singapore Airlines and Thai Airways are already members.

 

And of Idris' future at MAS? He acknowledges that his contract is up in November and he hasn't decided whether to stay on. But regardless of his decision, he says an important development from the airline's restructuring has been the emergence of new leaders, meaning the transformation programme is sustainable with or without him. "Now that I have been with the company for two and a half years I know what the guys are good at and they are prepared to run the mile," he says.

 

Rhythm of life

 

Type "Idris Jala" into YouTube and you may be surprised at what comes up. Not only are there videos of him giving corporate speeches to the Malaysia Airlines workforce, there are several of him playing guitar - and doing so very well.

 

Idris says he is genuinely passionate about several things in life, such as his family, fishing and blues music. Getting Idris talking about any of those subjects seems to put him in a different world and takes him away from his corporate worries. He enjoys fishing because it clears his mind, and he likes all kinds, whether it be deep sea, lake or river fishing. With music, however, it is almost exclusively the blues. "I really dig that, and I am very intensely into it," he says. Idris plays lead guitar and resonator guitar.

 

 

 

Idris had humble beginnings, growing up in a tribe in Sarawak, in East Malaysia. He moved away and secured a bachelor's degree from the Universiti Sains Malaysia and a master's from Warwick University in the UK.

 

A veteran of Shell, which he joined in 1982, he won a reputation there for successfully turning around troubled divisions. Between 1995 and 1997 he was in charge of the national retail business of Shell Malaysia and was a member of the company's business re-engineering team.

 

Between 1998 and 2000 he was managing director of Shell Sri Lanka. Between 2000 and 2002 he was vice-president of retail marketing with Shell International in London.

 

Before joining MAS he was managing director of Shell MDS (Malaysia) and vice-president of Shell Malaysia Gas & Power.

 

Check out Idris Jala jamming with his band the Popudoms: flightglobal.com/jala

 

[S. Huang 0]

Michael, is that you?

 

You're giving that chap waaaay too much credit.

Edited April 7, 2008 by S. Huang

[Ryan Soh 3]

The following article (and front cover story) appeared in Flight Global "Airline Business" Magazine - 19/03/2008

Ok with that said and done, what is EZE and EWR still doing on the route map?

[Alan B. 5]

Jannar, I admire your optimism. I too was like you, when I joined MH. I do hope that you feel the same 5 years from now.

[S V Choong 4]

Michael, is that you?

 

Not implying any love hate relationship, are you?

[Sandeep G 1]

Ryan,

 

EWR and EZE are also profitable what - just a different kind of profit - political profitability In the end, better to subsidising 2 loss making routes rather than 68 unprofitable ones I guess Who knows, maybe someday, these routes will reign in some profits for the airline. EWR certainly should anyway - MH should push for open skies with the UK

 

BC,

 

The good thing to note in that comment is the acknowledgement by the airline management that they were unable to compete effectively in the passenger market and hence were unable to fully utilise this aspect of their business in their effort to restore profitability and sustainability. In order to become sustainable in the passenger market once more, the airline has had to cement and beef up its other operations - areas of the business where it could make drastic adjustments within the constraints of their present manpower, inventory and talents - to propel the airline forward - and it has done just that.

 

So whilst we may all sit back and think that Snackboxes are lame and unappetising and criticise the shortcomings of management, we must eventually realise that we are never looking at the full picture and consider this. I think the past 3 years at MAS have been somewhat revolutionary and hope only for the sake of its hard-working employees that the future be much brighter.

[BC Tam 2]

Sandeep,

 

Yes, the acknowledgement was a positive start - proof that the management had woken up from their state of denial beforehand. And credit too for turning those 'other operations' into the profitable cash cows they are nowadays

 

However, it remains too early (imo) at this point in time for us to consider properly if these positives being reported recently by Datuk IJ are sustainable in the longer term. History has seen a few 'boom-bust' cycles for MAS' fortunes being played out. During 'boom' times, lots of accolades and general back-slapping. At the 'bust' end of such cycles, there is the usual cry for our national pride and list of demands to the Malaysian government, who invariably has to foot the bill in some way or another

 

So, what has been done to structurally change MAS so that their adherance to the "what goes up must come down" principle can be abandoned ? It may be a sensitive issue, but as an example, the people in charge of those lucrative 'other operations' who failed back then to realise the cash cow potential of that under their charge - are they still around ? Has any lesson been learnt from the previous 'bust' cycles and more importantly what measures are in place so the issues are not visited again in future ? For a Skytrax 5-star rated airline to suddenly claim it is unable to compete effectively in the passenger market - it is something indeed !

 

Well, the terms "MH basher", "keyboard warrior" and the like will probably resurface in this thread here. Perhaps some of us can be faulted to see the matter in a far bigger picture than is necessary. What I would agree though is for a brighter future for those hard-working MAS employees, the deserving ones only - and not to be slapped with further threats of redundancies whilst underserving fat cats continue upstairs (if there are any left that is)

Edited April 8, 2008 by BC Tam

[Sandeep G 1]

Hi BC,

 

I definately capture what you're saying! Very well put MH Basher, Keyboard warrior et al, doesn't matter lehh. With regards to the boom-bust cycles prevalent at MAS - you are absolutely right! However, in the past, management such as Md Nor Yusof and Ahmad Fuaad Dahlan initiated restructuring of the accounts and not of the airline and hence, the airline really never did experience the booms it claims to have. Under the BTP though, it is indicative that restructuring is focusing on the business and operating enhancements as well as cleaning up the P+L statement and balance sheet to better reflect the true fiscal health of the company.

 

When they say they were unable to effectively compete in the passenger market, I think they laregely made this comment with reference to product. Yes, MAS has the world's best cabin crew - but today - we all know, that is just not enough. In flight product must be revolutionary and beyond the competition - and MAS quite simply did not have the money to invest in such product thereby inhibiting it to "effectively compete" in the passenger market. On the other hand, they still do compete, but just using what they have - and that's why over the past few years we've seen it blasted all over town and the media - "World's Best Cabin Crew"! Yes, we may all feel a little shortchanged with the snackbox - but heck let's just wait and see what happens.

 

The only problem is, things seem not to happen quite quick enough for members of this forum, including myself - we're an impatient lot -understandingly - but looking back, the past 3 years of turnaround at MAS seems to have happend pretty quickly! I'm hoping in 3-5 years time the same can be said again

 

Cheers

[Kader 0]

make sentence...like English grammar exercise.

 

1. me-no-pay- no- thoughts- for- free- thinking-BTP- pilot- ignore-no- just to know.

2. speculation-report-good-investor-fake-shares-up.

 

hehe

 

 

[Ryan Soh 3]

make sentence...like English grammar exercise.

 

1. me-no-pay- no- thoughts- for- free- thinking-BTP- pilot- ignore-no- just to know.

2. speculation-report-good-investor-fake-shares-up.

 

hehe

What an absolute gem! Hahahahaha...

[Izanee 0]

hahahahaha.... nice one Kader.

[Jannar T 0]

I must admit I am shocked & amused. I never though there would be so much posting in such a short time about this topic.To answer your question; (1) how certain are you it was wholly from within? check the books, the audit was done by Erns & Young (reputable enough for me) , they sold the building some aircraft……etc, but what I meant is that they found alternate divisions that raked in money…eg E & M(2) what competitive edge and against whom ? I meant E & M, MAS E & M is competitive. They have the facilities & the man power, & Malaysia is still considered a cheap place in term of exchange rate, wages, of course its not as cheap as china, but china might not have the technical man power mas has. E & M in MAS in Malaysia has quality & is cheaper. India has the man power, but no facilities. Singapore has facilities & manpower but is expensive. Indon has facilities but bad reputation. (3) Has the freefall been halted ?How would anyone know. Crude oil is 100++ USD today, fuel price has doubled in the last 2 years, have fairs doubled ? No. Saying record profit I admit is nonsense. You can only say profit after you wipe out all the losses you ever made, so 1 good quarter doesn’t count for much, but the point is, it’s a lot better then 8 quarters ago, if it had continued in that path…..the company would have been broke, is the company broke today., No, if it had continued in the same path, yes,I must say I was very happy to join in MAS. Especially since I was a private cadet. It was quite shocking after mingling around to see so many (especially Tech Crew) practically hating the company. Everyone wants too leave. I guess it’s to early for me to understand & I’m not going to pretend like I know everything that’s going on, but I am learned based on my experience in mergers & accusations of companies to understand a company that is heading down & up, and I say, buy MAS shares, not for profit next week, but in 5 years. What many people don’t see is that the MAS is not reinventing its self for tmrow, but for the next 5 years.I agree the meal box & most meals are rubbish, but hey, people still fly MAS, and it made money. I have spent hours reading on cooperate restructuring, in other countries especially, apart from VSS, the first thing a company going through what MAS went through a few years ago, was to slash wages, just look at all America or European airlines that had financial problems, jobs & wages were the first to go. In MAS, you were given a choice whether you want to leave or go, and they never cut back on wages, in MAS people got their pay on time 25th 95% of the time, till now, I have no idea how they did it.There are many things I feel people don’t understand about MAS. It was mess, its still is quite a mess, but I feel there is now a group of people who seem to have some clue about what to do & how to go about it. The accusation of new aircraft is risky, its worth 5-6 billion USD in total, money I’m not sure MAS can afford, but what choice do they have, many other airline companies in MAS position ( take southwest, thai & Pakistan airlines ) in the mid 90’s did what the norm was, keep the old fleet, refurnish them & weather the storm a bit & see what happens, the results were mixed, I think MAS is doing the Wright thing, go out & get new planes, with better seats & in flight entertainment you have an edge over the competition, refurbishing, even thou is cheaper only levels the playing field. while our competitors are doing a lot better, they had a nice platform to start with, when Ij took over, it was terrible, the mistakes in the past, if we want to comment, its never ending but lets agree on a few things if we can. MAS never sacked people or forced wage cut back, even thou any other company outside Malaysia would have done that first & things are improving. snack box, loung shutting down, tech crew not getting paid enough(i'm a big supporter) are all issues, but i'm optimistic.ohh by the way.......since were so critical.....i'm surprised i havent heard any suggestions on how to turn the company around......since were so critical & in the semangat of MH bashing,,,,,,how to improve ? i think we've heard enough about the snack box, but i mean long term.....what is your buisness plan ?

[KK Lee 5]

what I meant is that they found alternate divisions that raked in money…eg E & M

Agreed but E&M contribution to the bottom line is still marginal. In fact, fuel surcharge contributed more to the bottom line than E&M.

 

 

Crude oil is 100++ USD today, fuel price has doubled in the last 2 years, have fairs doubled ? No.

Fuel price is about 10 to 20% of ticket cost, double of fuel price won’t double ticket price.

 

 

I say, buy MAS shares, not for profit next week, but in 5 years. What many people don’t see is that the MAS is not reinventing its self for tmrow, but for the next 5 years.

Measures taken in BTP and BTP2 are short term, profitability is unlikely to sustain for more than 3 years, MH needs to reinvent itself again in 5 years time. Won’t recommend anyone to place their saving on MH stock for long term.

 

 

I must say I was very happy to join in MAS. Especially since I was a private cadet. It was quite shocking after mingling around to see so many (especially Tech Crew) practically hating the company. Everyone wants too leave.

Green horn is always over optimistic, it will take a while for the reality to set in after learning how MH fit square prick to round hole, non rewarding and what other airlines are offering.

 

go out & get new planes, with better seats & in flight entertainment you have an edge over the competition,

According to BTP2, the new planes will have smaller seat pitch and unlikely to have the latest entertainment system.

 

 

MAS never sacked people or forced wage cut back, even thou any other company outside Malaysia would have done that first & things are improving.

VSS was carried out in BTP. Reducing overhead is critical to MH long term survival, without drastically cutting another 20% of employees, MH won’t able to compete effectively in the long term.

 

 

what is your buisness plan ?

Liquidate MH and restart from ground zero.

 

 

 

 

[Ryan Soh 3]

Jannar,

 

Let's all take a step back and breathe... There is a very strong reason why the sentiments are such on the forum, or as u mentioned, among the old timers at MAS. You are new with the company I assume and thus it is normal for you to get swept up by the emotional furore and ideals you might have formed in your head prior to joining this airline.

 

I have been observing MAS ever since I could remember. I have also recalled the low and high points in the airline's history and sad to say, the low points tend to tip the scales. I might have only recently joined MW but I have been working in the aviation industry for a while now, having the priviledge to observe the developments over the years and to see how much MAS has changed (or not).

 

The government has for far too long buffered MH from any real damage and thus the workers tend to be a little malas over time. Threats after threats of shut down and such never really came to fruition. MAS has time and time again cried foul leading to protectionistic measures being taken at KUL to protect the "flag carrier". How is one supposed to thrive under such environment? Spare the rod, spoil the the child.

 

Yes the cabin crew is multi-awarded. But what next?

 

The BTP has so far inlcuded pockets of profits from different parts of the airline. I mean... hooray, I applaud for turning these departments around. But in the grand scheme of things, there is a serious need to indoctrinate the mindsets of the grassroot levels in MAS. The "malas " mentality has to be thrown out of the door and it is really a case of shape up or ship out. Maybe I might not fully understand the psyche that drives MAS but I have worked very closely with MAS Kargo and if they are anything to go by, CHRIST I am surprised the airline is still standing.

 

There are many comparisons with SQ (inevitable) because they share the same history. If similar methods of SQ meritocracy was applied from the start, then maybe MAS wouldn't be in the s#1t hole she is in today. My heart goes out to MAS because I used ot be a frwquent flier with this airline and I have tme and time again met very hardworking cabin crew wo have without fail, showed me that they appreciated my support, even more so that I am a Singaporean.

 

But I felt their hardwork went down the drain when I dealt with the business aspect of MAS. Tidak apa attitude still reigned supreme and the lack of urgency to get things done annoyed the hell out of me when I was dealing with the airline. This is an attitude that will take a lot to get out of because it is so deeply engrained into the mindset of MAS it is not even funny.

 

Stories abound when I was working for the airline about how the Malaysian Country Manager for SQ was hauled to KUL from Penang just to explain why was SQ marketing their flights to London in Malaysia. Why is there a need for tactics like these? Ever heard of competition?

 

Another case... Remember the good old days when SQ flew to KUC and BKI? There was a cap on the amount of Malaysians SQ could carry out of these two airports. WHY? Protectionism, that is why.

 

If you know you are not strong on your own fort, you will definitely resort to measures like these to protect your turf and from the business community's point of view, it comes off as very silly and childish. It certainly doesn't bode well for the reputation of MAS as a whole.

 

So now, back to your input about the optimistic BTP. Yes we are happy that MAS has a plan. They always had a plan. But time and time again they failed to have the momentum to carry it through. Maybe this time it is different? Than again, maybe not. Not enough stamina? Too malas (again)? Who knows? But we remain CAUTIOUSLY OPTIMISTIC about the BTP. Many feel that the gains are very short term and I tend to agree.

 

IJ's tenure will end this Nov. While his reign at the airline had "profits" as the main objective, which he had achieved, one starts to wonder what was the cost? As far as IJ is concerned, he had alrerady achieved his goal. As for the next guard taking over, they have an uphill task of restoring a brand that has been eroded and tattered. A brand getting so diluted it also means starting from the scratch to garner your support from the business and corporate community that really pays top dollar to fly you whether PCL, JCL or YCL.

 

Now that MAS has admitted they cannot compete with the biggies (SQ, TG, EK) anymore, what does this mean for the corporate accounts? Would companies want to be associated with an airline that is leisure oriented? What would this mean for their reputation?

 

So how? I know you might feel we are raining on your parade. You might feel shitty about it for us shattering your notions. But this is the reality of business. To say that MAS should collapse and start from ground zero might be a little harsh, but it could be an idea worth entertaining because the airline has to be run by a private entity, not by a government body. It should be a business, not a white elephant that sucks the taxpayers dry. It should be a company that welcomes competition, not one that cries foul everytime when faced with a challenge like a spoilt brat.

 

They have tried flying the wings of gold, and also attempted to go beyond expectations. Now let's see what will malaysian hospitality do to save the airline from the doldrums.

[Mushrif A 3]

(1) how certain are you it was wholly from within? check the books, the audit was done by Erns & Young (reputable enough for me) , they sold the building some aircraft……etc,

 

 

MH had a lot of help or bailing out disguised as commercial transactions. Buildings were sold and leased back to friendly government-owned or linked agencies. MH had a cash injection in the form of ST loan from a local bank, whose major shareholder is also MH's ultimate shareholder. And talking about shareholders, as MH is majority owned by the government, it had issued some rights share issues and I think some preference shares as well, which were of course taken up by its government shareholders. So, nobody gave MH huge cases full of cold hard cash, but the Gov did pump in money to save the day via various transactions.

 

[Sing Yew 1]

Jannar,

 

Let's all take a step back and breathe... There is a very strong reason why the sentiments are such on the forum, or as u mentioned, among the old timers at MAS. You are new with the company I assume and thus it is normal for you to get swept up by the emotional furore and ideals you might have formed in your head prior to joining this airline.

 

I have been observing MAS ever since I could remember. I have also recalled the low and high points in the airline's history and sad to say, the low points tend to tip the scales. I might have only recently joined MW but I have been working in the aviation industry for a while now, having the priviledge to observe the developments over the years and to see how much MAS has changed (or not).

 

The government has for far too long buffered MH from any real damage and thus the workers tend to be a little malas over time. Threats after threats of shut down and such never really came to fruition. MAS has time and time again cried foul leading to protectionistic measures being taken at KUL to protect the "flag carrier". How is one supposed to thrive under such environment? Spare the rod, spoil the the child.

 

Yes the cabin crew is multi-awarded. But what next?

 

The BTP has so far inlcuded pockets of profits from different parts of the airline. I mean... hooray, I applaud for turning these departments around. But in the grand scheme of things, there is a serious need to indoctrinate the mindsets of the grassroot levels in MAS. The "malas " mentality has to be thrown out of the door and it is really a case of shape up or ship out. Maybe I might not fully understand the psyche that drives MAS but I have worked very closely with MAS Kargo and if they are anything to go by, CHRIST I am surprised the airline is still standing.

 

There are many comparisons with SQ (inevitable) because they share the same history. If similar methods of SQ meritocracy was applied from the start, then maybe MAS wouldn't be in the s#1t hole she is in today. My heart goes out to MAS because I used ot be a frwquent flier with this airline and I have tme and time again met very hardworking cabin crew wo have without fail, showed me that they appreciated my support, even more so that I am a Singaporean.

 

But I felt their hardwork went down the drain when I dealt with the business aspect of MAS. Tidak apa attitude still reigned supreme and the lack of urgency to get things done annoyed the hell out of me when I was dealing with the airline. This is an attitude that will take a lot to get out of because it is so deeply engrained into the mindset of MAS it is not even funny.

 

Stories abound when I was working for the airline about how the Malaysian Country Manager for SQ was hauled to KUL from Penang just to explain why was SQ marketing their flights to London in Malaysia. Why is there a need for tactics like these? Ever heard of competition?

 

Another case... Remember the good old days when SQ flew to KUC and BKI? There was a cap on the amount of Malaysians SQ could carry out of these two airports. WHY? Protectionism, that is why.

 

If you know you are not strong on your own fort, you will definitely resort to measures like these to protect your turf and from the business community's point of view, it comes off as very silly and childish. It certainly doesn't bode well for the reputation of MAS as a whole.

 

So now, back to your input about the optimistic BTP. Yes we are happy that MAS has a plan. They always had a plan. But time and time again they failed to have the momentum to carry it through. Maybe this time it is different? Than again, maybe not. Not enough stamina? Too malas (again)? Who knows? But we remain CAUTIOUSLY OPTIMISTIC about the BTP. Many feel that the gains are very short term and I tend to agree.

 

IJ's tenure will end this Nov. While his reign at the airline had "profits" as the main objective, which he had achieved, one starts to wonder what was the cost? As far as IJ is concerned, he had alrerady achieved his goal. As for the next guard taking over, they have an uphill task of restoring a brand that has been eroded and tattered. A brand getting so diluted it also means starting from the scratch to garner your support from the business and corporate community that really pays top dollar to fly you whether PCL, JCL or YCL.

 

Now that MAS has admitted they cannot compete with the biggies (SQ, TG, EK) anymore, what does this mean for the corporate accounts? Would companies want to be associated with an airline that is leisure oriented? What would this mean for their reputation?

 

So how? I know you might feel we are raining on your parade. You might feel shitty about it for us shattering your notions. But this is the reality of business. To say that MAS should collapse and start from ground zero might be a little harsh, but it could be an idea worth entertaining because the airline has to be run by a private entity, not by a government body. It should be a business, not a white elephant that sucks the taxpayers dry. It should be a company that welcomes competition, not one that cries foul everytime when faced with a challenge like a spoilt brat.

 

They have tried flying the wings of gold, and also attempted to go beyond expectations. Now let's see what will malaysian hospitality do to save the airline from the doldrums.

 

Well, that culture has been long entrenched in their mind and it'd be had to eliminate it.

 

As for your last sentence. You've summed it out really well.

We'll see in a couple of year if not sooner if project Malaysian Hospitality will take off and be a saviour.

 

[BC Tam 2]

(1) I must admit I am shocked & amused .....

 

(2) ..... check the books, the audit was done by Erns & Young (reputable enough for me) .....

but I am learned based on my experience in mergers & accusations of companies to understand a company

(1) No need to be shocked, this place here as has been declared by another member, is only for light entertainment. However, to be amused is good, no ?

 

(2) It's Ernst & Young btw, and I assume you meant mergers & acquisitions instead ? Perhaps a little bit more polishing necessary before attaining 'learned' status ? As for audits of companies' financials, those involved in the industry would be in better standing to comment

[Sing Yew 1]

(2) It's Ernst & Young btw, and I assume you meant mergers & acquisitions instead ? Perhaps a little bit more polishing necessary before attaining 'learned' status ? As for audits of companies' financials, those involved in the industry would be in better standing to comment

 

Haven't looked at the complete financial statements of MAS before. So I won't be able to comment on that. Perhaps someone else in Audit that have done so could make comments.

 

And yes, it is Ernst and Young and not Erns and Young. I work with their staunch competitor.

 

[Jannar T 0]

Ok people, first sorry for the spelling mistakes....not my strong point I must admit. I agree with 95% of all that has been said, but my point, my question is what is the wright course of action? some say sell lock, stock & barrel, & restart, well......it makes a lot of sense apart from the thousands who be put out of a job.......but how to turn it around......I agree that 1 quarter profits is not all that great.....but how to turn it around. How to get back to profitability. How to be competitive. How to make MAS something to be proud about. How to re brand. How to win back customers & market shares. How, is my question? my first posting was that I thought the plan made sense, as optimistic as I may seem, I’ll be the first to put my hand & say, I don’t know how to solve all the problems, but I think the plan is smart based on the current situation.

 

The food sucks, I am paying customer (was before). The seats are bad. The service is most of the time good but not all the time. The general work force sucks. I knew after a few weeks that the place is runned like a government agency. I used to work in a multinational company before & I was shocked by people attitude to their work.......

 

But my point is, what the way forward. If you’re the MD, what do you do? How do you solve the mess? How? You can’t shut down MAS & restart because the government wont allow it, don’t complain about it, its fact, now what do we do?

 

I said the plan made a bit of sense to me, so what’s the better plan, I am really eager to hear. please forgive me for sounding harsh or rude, but I really feel that everyone is really good at complaining, not solving the issue, in my previous workplace, if I went to my boss with a problem, he will crucify me, the culture was to come with a solution to a problem, never mind if its half or a quarter solution, before you meet him you must have an idea on how as a team you will solve the issue. So people my question is, if you are the MD of MAS, how do you turn things around. Don’t complain about the limitations, but come up with a strategy.

 

[BC Tam 2]

(3) .....but china might not have the technical man power mas has

 

(4) Saying record profit I admit is nonsense. You can only say profit after you wipe out all the losses you ever made

 

(5) ..... but the point is, it’s a lot better then 8 quarters ago, if it had continued in that path…..the company would have been broke, is the company broke today .....

 

(6) MAS is not reinventing its self for tmrow, but for the next 5 years

 

(7) In MAS, you were given a choice whether you want to leave or go

 

(8 ) while our competitors are doing a lot better, they had a nice platform to start with .....

 

(9) when Ij took over, it was terrible, the mistakes in the past, if we want to comment, its never ending .....

(3) Try not to delude yourself, technical know how in China is more than a little advanced compared to what MAS possesses. They're probably not too interested in outside work as local demand I suspect exceeds the physical capability (ie infrastructure limitations ?)

 

(4) That is a novel concept indeed ! I guess MAS will have quite some way to claw back the accumulated losses then

 

(5) & (9) You're probably taking in everything the PR dept is churning out wholesale, but if that is your inclination, fine

 

(6) On the balance of what has been happening over the last couple of years, I would say they have been fighting the immediate fire instead, never mind what the next five years will throw up. And five years from now, I would not be utterly surprised if the current two major Malaysian entities have become one

 

(7) Are you familiar with the terms of the VSS offer ?

 

(8 ) Oh man, this pathetic line is getting utterly stale !!

 

Note : Jannar, this was posted before I had a chance to read your last reply

Edited April 9, 2008 by BC Tam