A Thought To Ponder

[N Azman 0]

Prashant,

 

I agree with you. IJ has done a great job from the business point of view. Somebody in MH could have done a research that results in:

 

30% of MH flyers are unhappy with snackboxes. Please bring back my hot meal.

30% don't give a hoot. Either I'm asleep anyway or I'm half dazed due to the pressurization and of the opinion that all airline food sucks and are too little.

20% dislikes the snackboxes, but ultimately doesnt give a hoot either. Airline choices are based on price or safety record or equipment or scheduling convenience. Not what food they serve on board.

20% don't give a hoot also. I'm flying business/first class baby

 

which gives you a whopping 70% that doesnt give a hoot.

 

So, from the business point of view, there goes the hot meals. in with the snackboxes.

 

[Wilber Tan 0]

I speak strictly from a business point of view and not as a passenger and my post was from a business a view

 

There are 2 views to consider here, one from a business point and the other from the passenger's view. From a business point its a very positive move to cut costs. From the passenger's view some see it as negative because no hot meals, some really can't be bothered so they accept what they get. Now, I made my post entirely from a business point of view with a view that Idris has done a good job, but nobody seems to agree. You tell me, do you think the previous CEO's could have done better or would they have just gone on exploiting their benefits? Do you think someone else could have done a better job? The airline industry is a tough industry,it so easy to come up with the problem in a millisecond but probably a light year to come up with the solution.

 

I salute Idris for the job he has done and I do not think anyone else in the country could have done a better job because he is one of the few CEO's that actually had belief in his ideas and stood up for it no matter how much bashing he got for it and that goes a very long way which is why I think Idris makes one hell of a CEO

 

 

their business is passenger!! no passenger for an airline means no business

[Ignatius 4]

their business is passenger!! no passenger for an airline means no business

 

Well said Wilber... no passenger no revenue no business.. well that is business point of view. Client is always right.. that us!! But dinosos in MH dont have hearts and ears.. so they cant listen.. too bad hehe, but thanks to the nice snake-box(box only)

[Izhar Z 1]

their business is passenger!! no passenger for an airline means no business

 

 

Well said Wilber... no passenger no revenue no business.. well that is business point of view. Client is always right.. that us!! But dinosos in MH dont have hearts and ears.. so they cant listen.. too bad hehe, but thanks to the nice snake-box(box only)

 

Thats what i was thinking. How come you speak from the business point of view without considering the major contributor to your business?

[KK Lee 5]

Now, I made my post entirely from a business point of view with a view that Idris has done a good job, but nobody seems to agree. You tell me, do you think the previous CEO's could have done better or would they have just gone on exploiting their benefits? Do you think someone else could have done a better job? The airline industry is a tough industry,it so easy to come up with the problem in a millisecond but probably a light year to come up with the solution.

 

I salute Idris for the job he has done and I do not think anyone else in the country could have done a better job because he is one of the few CEO's that actually had belief in his ideas and stood up for it no matter how much bashing he got for it and that goes a very long way which is why I think Idris makes one hell of a CEO

 

 

Historically MH board members, chairman and CEO are political appointees. They are there to serve their masters (eg MoF, MoT, PM) interest and MH’s future is not their top priority.

 

Unlike previous CEO, IJ is given more room to exercise his decision. We respect him for brought MH back to profit but he took many easy options (eg cutting meals instead of overhead), sacrifice long term profit for short term gain, diluting brand name, etc just to meet his KPI.

 

Issues at MH are well known and are low picking fruits. IJ is not the only CEO that can turn around MH. One of Mwings member is certainly has enough experience to outperform IJ should he takes the helm.

 

 

 

[Mushrif A 3]

I speak strictly from a business point of view and not as a passenger and my post was from a business a view

[...]

 

OK, so from a business point of view.

 

Firstly previous recent CEOs were either too busy worrying about meeting interest payments on a huge mega loan (hence the tendency to over-invoice stuff, etc), or lacked the support from the Shareholders to do anything drastic or revolutionary. The Shareholders lacked the poilitical will and needed massive losses to wake up, preferring the "it ain't broke, hence no fixing required" stance. IJ, btw, came in after the shareholders were shocked by the second wave of losses, not too long after the earlier asset-lightening exercise. What IJ had which earlier CEOs did not, is the political will of the shareholders.

 

Now, on snackboxes per se, I think it was not a well-thought exercise, and reflects poorly on IJ. The benefits to the bottomline were relatively small (I've pointed this out on an earlier thread - check the analysis of the financials). As Azman MN pointed out, such relatively small savings can be squeezed from other areas which matters little and/or unseen to the passengers. For instance, instead of having those new colourful boarding passes, MH could just have plain white generic boarding passes throughout the system. The customer only ends up with the small stub anyway before boarding the aircraft. On this matter, IJ seems to lack creativity and seems to come up with a cost savings method that has much significance to the Y pax.

 

And, the fact that IJ keeps repeating the 5-star mantra when promoting Y shows that he does not think much of the repercussions, and can even be construed as misleading. Dry water, cold fire. MH's 5-star peers, using the same benchmark, include some serious regional heavyweights, which are easy alternatives to the travelling public. As his bonuses would typically be influenced by the returns shown during his tenure, IJ probably does not care much about the long term damage to the brand and customer goodwill.

 

For me, MH will have to offer zero fares to attract me to fly MH. Hence, I'm not giving them a great yield when I do. I actively avoid flying MH in Y and because MH has stabbed me in the back and taken my custom for granted, I also avoid MH when I fly J and F. Hence, when I'm willing to pay top dollar, MH will not be getting that.

 

So, when the passengers' disagree with IJ, it somewhat affects the business. So, Prashant, the two things are not mutually exclusive.

Edited May 9, 2008 by Mushrif A

[Wilber Tan 0]

prashant so support MAS...

 

wonder if he travel more on MAS o AirAsia..

 

and for iggy, wat happen?? the box so nice huh??

[Ignatius 4]

prashant so support MAS...

 

wonder if he travel more on MAS o AirAsia..

 

and for iggy, wat happen?? the box so nice huh??

 

Yes.... the box only hahhaha

[Imran K. 0]

prashant so support MAS...

 

wonder if he travel more on MAS o AirAsia..

 

and for iggy, wat happen?? the box so nice huh??

 

You dont have to be an avid MAS supporter to use your basic, common sense and logical reasoning to come to the conclusion that IJ's presence in the company has only lead to the betterment of the airline.

 

Sad that some members here cant conduct themselves properly.

[BC Tam 2]

Ah, where is Michael (THE ex-baker) ?!

 

..... it so easy to come up with the problem in a millisecond but probably a light year to come up with the solution

A light year is a measure of distance, not time

(Sorry, had to get that out of my system )

[Izanee 0]

If you check the MAS website...a table there shows the declining pax figures year on year.

 

Agree that IJ is sacrificing long term profits with short term gains.

 

Other airlines are performing well financially AND still can come up with premium products.

 

 

If you check the MAS website...a table there shows the declining pax figures year on year.

 

Agree that IJ is sacrificing long term profits with short term gains.

 

Other airlines are performing well financially AND still can come up with premium products.

 

[Ignatius 4]

I think its best that the MODS hit the RED button "Now" before keyboard warriors take the batttle up again.. hehehe..

 

[Imran K. 0]

Keyboard Warriors?

 

Bar a few individuals, i think a large percentage of those posting on this thread would gladly face anybody in the face and tell them what they think about MH, about life, about God, about food, about everything.

 

 

Maybe you cant?

[S. Huang 0]

The airline industry is a tough industry,it so easy to come up with the problem in a millisecond but probably a light year to come up with the solution.

 

CEOs are not paid top dollars to come up with short term solutions. The mark of a good CEO is someone who rallies his employees (IJ has sort of done that) and come up with long term strategies that will take the company beyond his own tenure (this many here feel IJ has failed).

 

On the competitor next door, SQ NEVER ever dilutes its service such that it becomes obvious to its customers. That to them, is tantamount to suicide. It takes decades to build a brand, but you only need 1 incident/product to trash all your efforts.

Edited May 9, 2008 by S. Huang

[N Azman 0]

their business is passenger!! no passenger for an airline means no business

 

 

Well said Wilber... no passenger no revenue no business.. well that is business point of view. Client is always right.. that us!! But dinosos in MH dont have hearts and ears.. so they cant listen.. too bad hehe, but thanks to the nice snake-box(box only)

 

 

Thats what i was thinking. How come you speak from the business point of view without considering the major contributor to your business?

 

With all due respect to the above posters, i think all the posts above are a biiiiittttt inaccurate. passengers are not king. RPKs are king. Passengers are secondary to a good RPK. RPK is revenue-passenger-kilometer which in otherwords, how much money you make, per passenger, per kilometer flown.

 

So in other words, its not just about carrying the most passengers and pleasing the most, its about maximising your revenue with each passenger, even if you have to sacrifice a few. Striking a balance to maximise revenue is a definite trade off exercise where there is no best of both worlds. it is apparent that IJ cut MH's costs in its inflight menu, but RPKs has been sky rocketing since he took over.

 

Ill say it again. RPKs have been increasing tremendously since he took over - which equates to higher revenue, and profit. Which makes for a good CEO.

 

"you can fly 100 pax on a bad RPK, and still not make as much money as the next carrier carrying 80 passengers with a good RPK..." (minus 20 pax who are disgruntled with snackboxes)

 

And the last post regarding 'Major Contributor' being the passengers. Yes, thats true. But do you really think your view of snackboxes being a decisive factor of people choosing their airlines is mutually shared by the majority of the fliers in the region?

 

I can assure you. Not that many people gives a sh*t.

[Mushrif A 3]

With all due respect to the above posters, i think all the posts above are a biiiiittttt inaccurate. passengers are not king. RPKs are king. Passengers are secondary to a good RPK. RPK is revenue-passenger-kilometer which in otherwords, how much money you make, per passenger, per kilometer flown.

 

I do hope that you realise that the "non-king" passenger is a critical part of the RPK equation. RPK, good or bad, will not exist without the passenger. Maybe you would like to expand or clarify the apparent contradiction in your statements?

 

I think its best that the MODS hit the RED button "Now" before keyboard warriors take the batttle up again.. hehehe..

 

If the so-called red button is to lock the thread, I do not see why that is necessary. The exchange of comments and opinions have been quite civil thus far, either from those who agreed with Prashant's thoughts or those who think otherwise. I do not think people will start rioting on the streets because of the comments from this topic.

 

[N Azman 0]

CEOs are not paid top dollars to come up with short term solutions. The mark of a good CEO is someone who rallies his employees (IJ has sort of done that) and come up with long term strategies that will take the company beyond his own tenure (this many here feel IJ has failed).

 

On the competitor next door, SQ NEVER ever dilutes its service such that it becomes obvious to its customers. That to them, is tantamount to suicide. It takes decades to build a brand, but you only need 1 incident/product to trash all your efforts.

 

1) creating firefly as a community prop-only lowcost competitor to airasia

2) Fleet renewal of new generation 737s with better fuel consumption

3) selling expensive unnecessary assets such as the MH building in KL

4) continuing BTP 1 with BTP 2, whose success will ensure MH could have a large enough cash mountain to survive any future world/local economic crises (any more war in the mideast, oil peak scenario, govt change in malaysia (uh-oh...))

5) ATR 72 with even lower fuel consumption to ensure cost structure of firefly is kept low, as the industry approaches overcapacity

6) NOT cancelling the A380 orders despite heavy pressure from the unions for him to do so, hence ensuring MH stays with the competitor next door in terms of equipment availability.

 

Look, im not a pro-MH guy or pro-IJ guy or anything. But those sure sounds like long term solutions from my seat right here.....

 

 

[S. Huang 0]

With all due respect to the above posters, i think all the posts above are a biiiiittttt inaccurate. passengers are not king. RPKs are king. Passengers are secondary to a good RPK. RPK is revenue-passenger-kilometer which in otherwords, how much money you make, per passenger, per kilometer flown.

 

So in other words, its not just about carrying the most passengers and pleasing the most, its about maximising your revenue with each passenger, even if you have to sacrifice a few. Striking a balance to maximise revenue is a definite trade off exercise where there is no best of both worlds. it is apparent that IJ cut MH's costs in its inflight menu, but RPKs has been sky rocketing since he took over.

 

Ill say it again. RPKs have been increasing tremendously since he took over - which equates to higher revenue, and profit. Which makes for a good CEO.

 

"you can fly 100 pax on a bad RPK, and still not make as much money as the next carrier carrying 80 passengers with a good RPK..." (minus 20 pax who are disgruntled with snackboxes)

 

And the last post regarding 'Major Contributor' being the passengers. Yes, thats true. But do you really think your view of snackboxes being a decisive factor of people choosing their airlines is mutually shared by the majority of the fliers in the region?

 

I can assure you. Not that many people gives a sh*t.

 

I understand what you are getting at... but I'm also curious. What happens if you remove the P from RPK? I think the real issue is not really about snack boxes per se, but the perceived value customers are beginning to attach to flying MH. What revenue are you going to have if passengers start flocking to competitor airlines? And if passengers do not see value for money in the MH product, do you think they will be willing to pay high prices to fly on MH? And by then, what kind of yield will each ticket sold reap?

 

True, the numbers may look rosy now... but how sustainable can it be? Passengers DO have a choice, and airlines know that enough to find ways to retain them.

 

So, minus of the P in RPK, and you will probably only end up with K in the long run.

 

[Waiping 12]

For me taking a flight is an enjoyment, and good food relates to good experience.

[N Azman 0]

I do hope that you realise that the "non-king" passenger is a critical part of the RPK equation. RPK, good or bad, will not exist without the passenger. Maybe you would like to expand or clarify the apparent contradiction in your statements?

 

if you had bothered to read my post completely, you would see my clarification in the example down there. the part about sacrificing some services (and some passengers) for good RPK. hey, it worked so far, the numbers dont lie bro.

 

unless you really believe snackboxes would bring the passenger count of mas down close to ZERO. in which case i have no arguments to counter that already!

 

I What happens if you remove the P from RPK? What revenue are you going to have if passengers start flocking to competitor airlines? And if passengers do not see value for money in the MH product, do you think they will be willing to pay high prices to fly on MH? And by then, what kind of yield will each ticket sold reap?

 

True, the numbers may look rosy now... but how sustainable can it be? Passengers DO have a choice, and airlines know that enough to find ways to retain them.

 

So, minus of the P in RPK, and you will probably only end up with K in the long run.

 

wow people really do believe snackboxes can bring down the 'P' amount significantly. remove the 'P'? u mean bringing it down to zero passenger count? because of snackboxes?

 

you can't be serious man. youre taking extremes to combat a perfectly logical argument. im lovin this argument now. but that just doesnt make sense. P count is important, but definitely not driven by snackboxes.

[S. Huang 0]

1) creating firefly as a community prop-only lowcost competitor to airasia

2) Fleet renewal of new generation 737s with better fuel consumption

3) selling expensive unnecessary assets such as the MH building in KL

4) continuing BTP 1 with BTP 2, whose success will ensure MH could have a large enough cash mountain to survive any future world/local economic crises (any more war in the mideast, oil peak scenario, govt change in malaysia (uh-oh...))

5) ATR 72 with even lower fuel consumption to ensure cost structure of firefly is kept low, as the industry approaches overcapacity

6) NOT cancelling the A380 orders despite heavy pressure from the unions for him to do so, hence ensuring MH stays with the competitor next door in terms of equipment availability.

 

Look, im not a pro-MH guy or pro-IJ guy or anything. But those sure sounds like long term solutions from my seat right here.....

 

It's interesting how all these efforts are overshadowed by just 1 product - the snackboxes.

As I said, all it takes is one measure that 'hurts' the customer and nothing else you do matters.

 

I'm also wondering, if you say Firefly was created to be a low cost competitor to Air Asia, why is MH also joining in the race to compete with Firefly and Air Asia now with RM0 tickets!? IMHO, some of those action items that you listed are medium term plans, and some are there because its the long overdue common sense thing to do e.g. (2), (3), (5). I can't comment on not cancelling their A380 orders... as I have no idea what IJ plans to do with them.

[Waiping 12]

Would other airlines like SQ given the chance to fly BKI-KUL or KUL - PEN under the open sky policy come 2009? I thought I read somewhere that a fully liberalised open sky policy will be introduced in 2009.

 

If that so, does that mean we will not see a premium airline for Malaysia as MH choose to fight AK instead of maintaining quality and service and fight airlines like SQ and CX?

[S. Huang 0]

if you had bothered to read my post completely, you would see my clarification in the example down there. the part about sacrificing some services (and some passengers) for good RPK. hey, it worked so far, the numbers dont lie bro.

 

unless you really believe snackboxes would bring the passenger count of mas down close to ZERO. in which case i have no arguments to counter that already!

 

 

 

wow people really do believe snackboxes can bring down the 'P' amount significantly. remove the 'P'? u mean bringing it down to zero passenger count? because of snackboxes?

 

you can't be serious man. youre taking extremes to combat a perfectly logical argument. im lovin this argument now. but that just doesnt make sense. P count is important, but definitely not driven by snackboxes.

 

If you read between the lines, you'd understand the meaning of perceived value. It's really not just the snack box alone that people are unhappy about. I don't think anyone is really saying that snackboxes ALONE will cause MH's downfall. You shouldn't take words too literally.

[Gavin Andrew David 6]

If the so-called red button is to lock the thread, I do not see why that is necessary. The exchange of comments and opinions have been quite civil thus far, either from those who agreed with Prashant's thoughts or those who think otherwise. I do not think people will start rioting on the streets because of the comments from this topic.

 

Agreed , this topic is far from uncivilized and is also far from being locked ...

[Izhar Z 1]

With all due respect to the above posters, i think all the posts above are a biiiiittttt inaccurate. passengers are not king. RPKs are king. Passengers are secondary to a good RPK. RPK is revenue-passenger-kilometer which in otherwords, how much money you make, per passenger, per kilometer flown.

 

So in other words, its not just about carrying the most passengers and pleasing the most, its about maximising your revenue with each passenger, even if you have to sacrifice a few. Striking a balance to maximise revenue is a definite trade off exercise where there is no best of both worlds. it is apparent that IJ cut MH's costs in its inflight menu, but RPKs has been sky rocketing since he took over.

 

Ill say it again. RPKs have been increasing tremendously since he took over - which equates to higher revenue, and profit. Which makes for a good CEO.

 

"you can fly 100 pax on a bad RPK, and still not make as much money as the next carrier carrying 80 passengers with a good RPK..." (minus 20 pax who are disgruntled with snackboxes)

 

And the last post regarding 'Major Contributor' being the passengers. Yes, thats true. But do you really think your view of snackboxes being a decisive factor of people choosing their airlines is mutually shared by the majority of the fliers in the region?

 

I can assure you. Not that many people gives a sh*t.

 

Oh....... Sorry. I didnt really refer my post to the snekbox per se. I'm actually behind IJ and MH most of the time. I dont really give sh*t about snekbox too. I was just saying about the "from business point of view" thing and how you make this business review without considering those who make your business a business in the first place. Its just ridicolous.