“The report also showed
several group photographs of the people involved in managing MAS but none
looked smart enough to run the company. One guy has a sneering smile on his
face. The one seated and the person standing behind him looked smug, while the
lady who was standing tried to look impressive and the man standing on her left
tried to fake a smile”
Another
MAS revamp plan? Don't be fooled, this GLC is taking us for a ride
Source:
here
Since Ahmad Jauhari was
just appointed as the new CEO recently, he must have had a very tough
responsibility to ensure MAS makes profit but he must also be aware of the its
past performance, and reading through the MAS
Annual Report for 2010 there are some salient points to consider.
The front page of the 2010 MAS Annual Report has
a large print “GROWTH” followed by the next page stating its
vision; "To be the Number One Airline in Asia by 2015"
and its mission; "To be a Consistently Profitable
Airline".
No, it is not a joke!
Of course, what actually
happened was that despite recording a 5% higher revenue of RM3.565bil compared
to RM3.40bil in the previous quarter, Malaysia Airlines made a net loss of
RM478 million for the third quarter of 2011 ended 30 September 2011. Ahmad
Jauhari and team attributed this to higher fuel costs and unrealized foreign
exchange losses from outstanding USD borrowings. The cumulative year-to-date
net loss for the Group stood at RM1,247 million.
Securing their own fees first
The MAS annual report
then showed the airline's journey throughout 2010 with so many milestones being
achieved involving signing new agreement for maintenance between the group and
other airlines, its involvement in a reality show TV program, charity event,
launching of new routes, launching of new products related to holidays, new
business partnerships and all sorts of seemingly profitable business ventures.
But few details were given as to whether these really made money, although by
now, Malaysians know MAS has been losing money for quite a while.
Unfortunately the first
important information MAS focused on is the board of directors, their
re-appointment, appointment of new members and the approval of the directors’
fees. Yes, that is their first order of business.
Then, it moved on to
more shares being allocated to the relevant directors and all the legal
mandates needed to ensure that no matter whether MAS was making profit or going
bankrupt - the positions and all the entitlements of the entire board could be
secured first. No mention of ensuring that MAS made profit, or of eradication
of wastages and corrupt practices and paying back the money MAS owes the
government from all the bailouts through the years.
It was also listed that
under the MAS umbrella, there are 22 subsidiaries and 6 investment associates.
The impression one get when reading the report should be impressive but there
was nothing written whether any of them are losing money or if all of them are
making profit. Surely since MAS' mission is to consistently make profit, these
business ventures should be profitable. But are they making profits?
Looks can be deceiving
The report also showed
several group photographs of the people involved in managing MAS but none
looked smart enough to run the company. One guy has a sneering smile on his
face. The one seated and the person standing behind him looked smug, while the
lady who was standing tried to look impressive and the man standing on her left
tried to fake a smile.
Another group photo and
this time with all the men standing and also trying to fake a smile left one
with a most uncomfortable feeling. Maybe, they felt happy about the money each
of them were going to get. Certainly, none looked worried about the financial
status of the company. But why would they want to smile when MAS has not been
making money for several years already?
Competent board of directors?
Then the report printed out in detail the curriculum vitae of the
top management to impress the readers. But if they are all that good, why is
MAS still losing money? Are they really good? Good at what? Losing money?
Siphoning money?
The next section of the
report proves the point that the whole management team is packed with
incompetent souls when the dividend for year 2010 was declared to be only
7.2sen per share!
But MAS managed to fly
15.7 million passengers and the gross revenue for the group was RM13.6 billion.
Still, because gross expenditure was RM13.5 billion before tax, no wonder MAS
was able to pay only 7.2 sen dividend per share!
It is common sense that MAS must reduce the expenditure to get
more profit but unfortunately there is no such effort to reduce the expenditure
because the amount of money that needs to be siphoned out has been fixed.
Cynical? Look at the carrier's loss record then.
Is the new MAS CEO as hopeless as the others?
So the effort and
planning by the new MAS CEO Ahmad Jauhari to form another Premier Airline as
announced recently is just another proposal for a money-making-scheme.
If Ahmad Jauhari is not
careful, he will be accused of following in the footsteps of what Prime
Minister Najib Razak is doing now, borrow more money and siphon it out, without
even considering to reduce the carrier's expenditure, increase efficiency, trim
the number of staff or reduce the number of the board of directors, reduce the
remunerations, or even shutting down the losing subsidiaries or reviewing the
present contracts and agreements between MAS and it vendors especially the
catering company supplying food for MAS.
Malaysia is already RM445 billion in debt and MAS is contributing
about RM1.2 billion of debt each year. Has the UMNO-BN government not learned
any lessons yet? MAS should either buck up or just close shop.
