Friday, 30 March 2012

Learn how to ‘read’ and not just ‘count’.

Well said, Doc.
These barbarians must now learn how to ‘read’ and not just ‘count’.

“What we do today will have an impact on the future generations. Let not future generations urinate on our graves.”
The Corporate Objectives of MAS as laid down by the founding fathers were as follows:
1. To provide the people of Malaysia with an efficient and profitable air transport system which enhances the standing of the Nation and policies of its Government.
2. To develop an efficient domestic service within Malaysia which also directly links Sabah and Sarawak with Peninsular Malaysia and contributes to the economic and social integration of the country a a whole.
3. To select, train and develop personnel using the most up-to-date and appropriate managerial techniques.
4. To provide simultaneously competitive and profitable international services which support Malaysia’s trade, tourism and other activities.
5. To contribute meaningfully to national aspirations and foster an organisation which is in harmony with the multi-racial objectives of Malaysia.
I sometime wonder whether these Corporate Objectives are in the minds of the people in MAS today.
The Pioneers of MAS embraced these Corporate Objectives with passion and commitment and treating them like a marathon with no end in sight. Implied in the Corporate Objectives, MAS belongs to the people of Malaysia and shall be managed by the people of Malaysia. Only Malaysians knows the national aspirations. So as not to deviate away from these Corporate Objectives, good corporate governance was put in place and strictly adhered to.
Measured against these Corporate Objectives, it is obvious that MAS has lost its direction. Since 1994, MAS has not only changed in Form but also in Character.
Voyage report is a must for every flight….events that are out of the ordinary are reported in the voyage report. Upgrading from economy class to higher classes after cabin doors are closed are reported in the voyage report and it is highly improbable that the Flight Crew of the flight would fabricate such report. Upgrading of passengers from lower class to higher class prior to a flight (pre-arranged) will not be reported in the voyage report.
In so far as the transfer of AA passengers to MAS is concerned, I wonder what fare was charged when such passengers are uplifted. If there is no bilateral Agreement between two airlines, normal full published fare should be charged and if there is bilateral Agreement the mutually agreed fare (which may be lower than the published fare) will be charged. Other conditions in such bilateral Agreement may include the period of travel as determined by the receiving carrier. What about other terms and conditions of carriage? For example baggage allowance, meals on board (as it would not be appropriate for MAS Cabin Crew to serve inflight meals/refreshments to MAS genuine passengers and not the AA transferred passengers or charge them for inflight meals/refreshments).
For what it is worth, my personal view is that in order for MAS to move forward is to REGROUP, adhere to good corporate governance, effectively manage cost, abhor acts of indiscipline, ahbor wastage, remain focused on National Aspirations and strongly supported by the relevant Government Agencies (like MOT, DCA, MAHB, CIQ), Hoteliers, Tours Operators and Ground Transporters etc…..National Interest above personal interest.
What we do today will have an impact on the future generations. Let not future generations urinate on our graves.
March 29, 2012 at 2:50 pm

Wednesday, 21 March 2012

An open letter to MAS Chair Man

Dear MAS Chair Man,
(Let it be known that I am so pissed that I do not want to mention your name)

On Friday 16 March 2012, you said
“Do judge us on the results we deliver with our business plan, but please give the management team sufficient time to implement the business plan effectively,”

“Malaysia Airlines is a very sick patient, and its condition is quite critical. Indeed, there are a full range of prescriptions available. Judge us by the result, not by the choice of prescription”

Do recall that since 2001 when you were the Managing Director, you have FAILED to fix the "operational issues" in MAS as highlighted by the late Tan Sri Azizan in Berita MAS dated September 2001 and September 2003 and summarised below:

SEPT 2001

SEPT 2003

Currently the staff morale is very low and action should be taken to improve the situation quickly.  The new management has FAILED in the fundamental duty of any corporate initiative, which is to galvanize support and get the buy-in from the workforce. They have FAILED to realize that it takes a large workforce to successful run an airline business and therefore cannot be high handed in the approach to turnaround the company especially since MAS has a workforce of 20,000. It also contravenes the 1Malaysia aspiration of people first, performance now.

As the sentiment for the share swap and the CCF is negative, no amount of plans and implementation rolled out from Management from this point onwards will bring positive results as the productivity and loyalty to the programme is already flawed and damaged.

Therefore, the membership of the Board and the senior management must be examined and reconstituted with a view to rally the entire organization to common objectives for the good of MAS.  People with high integrity, the right knowledge, experience and with the national interest at heart, should provide the leadership of the organization as soon as possible.

There are many critical issues that need to be solved on an urgent basis.  The most pressing issue is the financial aspect.  The Chair Man of the company said that the company was very sick and needed urgent treatment, while the Managing Director also said that unless the financial situation was fixed fast, the company would be bankrupt soon.  It is therefore a serious situation and the government must now be involved in resolving the problem.

Despite acknowledgement of this serious situation, the management has spent unnecessarily on sponsorships, new livery and exorbitant consulting fees that bear no tangible benefit to MAS in the near term thus demonstrating incompetency of articulating short, medium and long terms strategies for the company.

It is also alarming to note that the management has been very quick to close down international routes on the pretext of unprofitability. They have FAILED to realize that the cost of starting and establishing international presence has a tangible, intangible, economic multiplier and strategic international value. Their decision to close purely on commercial considerations has major ramifications that are not quantified in the MAS books but will be felt in other areas of the revenue generation and strategic value for the country.

It should be noted that the current management is now actively engaged in negotiating the sale of assets in engineering, training etc.  It is important that the activities be suspended immediately otherwise it will be too late to take remedial measures.  The proposed formation of joint-venture companies relating to engineering, training etc. should also be suspended before it is too late.

Mastroubleshooters are ready to surface!

More clues here 

Monday, 19 March 2012




"In order to face the heavy effects on the air transport industry of the last 3 years of economic crisis, Malaysia Airlines Italy has proposed innumerable sales and pricing initiatives to support and consolidate its presence in the local market. These initiatives were NEVER listened to, NOR considered, NOR evaluated by the Regional and Central managements, which remained totally blind to the needs of the Italian market."                                                                                                          Source:                                                                                             

After 18 years of consolidated presence in the Italian market, on 16 December 2011 Malaysia Airlines announces the suspension of the flights from Italy to Malaysia and vv., effective 31 January 2012.

We, employees of Malaysia Airlines Italy, would like to provide our version and views on the whole matter, coming from our in depth knowledge of both the Company and the market. 

The value and the potential, which the Company unquestionably showed in the last few years, has brought us to believe that this decision is hasty and not thought through.

Last November the 27th, during an internal meeting, an increase in frequencies from the current three to five weekly, effective November 2012, was discussed. After only 15 days, these intentions were reversed by a communication from the Company announcing the termination of Italy-Malaysia vv. route.

In the past, grave moments of crisis (bird flu, SARS, tsunami in Indonesia) have hit the influx of Italian traffic towards the Asian region. These were overcome thanks to the initiatives of the Italian management, strongly supported by both the European Regional office and the Central Headquarters in Kuala Lumpur.

In order to face the heavy effects on the air transport industry of the last 3 years of economic crisis, Malaysia Airlines Italy has proposed innumerable sales and pricing initiatives to support and consolidate its presence in the local market. These initiatives were NEVER listened to, NOR considered, NOR evaluated by the Regional and Central managements, which remained totally blind to the needs of the Italian market.

On the contrary, strategies and policies have been imposed, which were completely alien to the reality of the Italian market and based on reasoning that contrasts with the local peculiarities. The failure of these strategies determined a significant drop in productivity and the progressive loss of market shares for Malaysia Airlines Italy.

The Regional office in Amsterdam abused its position by forcing Malaysia Airlines Italy to implement theseinappropriate strategies, designed to streamline Italy into unsuitable European models, despite frequent indications from the Italian office.

We believe that the Regional office in Amsterdam failed in its duty to distinguish and coordinate the European offices and mediate their differing needs to Kuala Lumpur. Instead, they limited themselves to a rigid control administered with arrogance towards the Italian market, that led the Company to its inevitable estrangement from the local market.

From the 31st of March, our GSA for reservations and ticketing (ATT, Asian Tour Travel) will cease all activities. As of yet, the Company, whilst keeping the operations from other European gateways (Amsterdam, Frankfurt, Paris and London), did not show any opening towards maintaining a possible offline office, which has happened in other European locations such as Zurich, Zagreb, Brussels and Madrid, all manned with Malaysia Airlines personnel.

At this time, there is no evidence of any appointed European representative to guarantee continuation of business and service to Italian agents and passengers, thus confirming a total disinterest in the Italian branch.

With deep regret, we have to note that even the “internal clients” of the Company were given no consideration.

The Company’s only consideration was collective redundancy, which will be effective after suspension of work, which started on the 29th of February. This decision was irrevocable and did not even follow the offer of extraordinary measures such as cost cutting campaigns or special employee contracts (e.g. “contratto di solidariet√†”).

Neither did the Company pick up the opportunity offered by the State Redundancy Scheme (“Cassa Integrazione Straordinaria-CIGS-“), which would have cost them nothing, remaining stubborn in their decisions.

We, employees of Malaysia Airlines Italy, do not align with the Company position, which we believe is detrimental to the image of Malaysia in Italy, and take this occasion to thank the market for the support shown in all these years.


Thursday, 15 March 2012


YB WCK wrote;
Not a bad business deal after all! “NOW EVERYONE CAN TAKE MAS FOR A RIDE!” No wonder AirAsia X Sdn Bhd officer announced with confidence that those affected 30,000 passengers can still travel to their destinations without having to pay extra charges in fare.

“European” wrote;
We are following this with great interest and have all respect for the support given to MAS by such a honourable MP. …Chapeau, as the french would say.
We all wonder what else must happen, until officials move in and stop such a obvious robbery (does it take openly carried firearms until officials wake up??)
Not even the Mafia in Italy would dare to rob a company so openly.
Considering MAS is owned by the public, what happens to your Press and TV..?? are they as corrupt too ??? The staff of MAS and the People of Malaysia should stand up against this obvious crime… Even the Press in Europe starts looking at it with increasing interest.
Attracting Tourist for a country that accepts open robbery ??? Attacting business and investment????I don´t think so..
Stand up and bring these jokers to justice.. what more evidence is needed to get all those criminals to jail??? Laws, Corporate Governance… all unheard of?? good luck to those suffering…

MT wrote;
Run idiots, run (while you can) !!!!!

Friday, 9 March 2012


Putrajaya mulls MAS-AirAsia break-up, unhappy with results

March 09, 2012
KUALA LUMPUR, March 9 — Putrajaya is reviewing the eight-month-old Malaysia Airlines-AirAsia alliance as it has failed to show any promised improvement or lift the morale of the 20,000-strong staff in the flag carrier that lost RM2.52 billion in 2011.

The Malaysian Insider understands that the Najib administration is also considering taking MAS private by directing state asset manager Khazanah Nasional Berhad buy back a 20.5 per cent stake exchanged with Tune Air Sdn Bhd, the majority owner of AirAsia, for 10 per cent stake in Southeast Asia’s largest budget carrier
“Datuk Seri Najib Razak is not happy with MAS’s performance which he was told would improve after the share swap,” a government source told The Malaysian Insider.
He confirmed that the MAS Employees Union (Maseu) had met and urged the prime minister to unravel the deal, which will break MAS into separate long- and short-haul operations. MAS also operates the Firefly community airline and MASwings for rural air services in Sabah and Sarawak.
Khazanah and Tune Air agreed to the share swap last August, after four previous unsuccessful attempts for an alliance between MAS and AirAsia, which soared from a decade ago when Tan Sri Tony Fernandes and partners bought the two-aircraft operation and its debts for RM1.
Khazanah’s CIMB Bank advised both parties in the deal, which was seen as the last attempt to save MAS despite an earlier rescue programme in 2001 planned by advisory firm BinaFikir Sdn Bhd.
Coincidentally, BinaFikir co-founder Tan Sri Azman Mokhtar is now Khazanah managing director while the other co-founder Mohammed Rashdan Yusof is in charge of MAS short-haul operations.
“The prime minister wants to see the full picture of the deal and find the best way forward for MAS especially since the union has expressed concerns,” another source told The Malaysian Insider.
The MAS management, under managing director Ahmad Jauhari Yahya, has had townhall meetings with the staff, some of whom are unhappy with Rashdan’s management style
“There are some valid concerns as they feel he isn’t a people person and that is important in a service industry,” the source said.
Another area of concern is the talk of being redeployed outside MAS to the short-haul premium airline headed by Rashdan as that would mean a loss of benefits.
MAS has slightly more than 20,000 staff although former MD Datuk Seri Idris Jala had cut it down to 17,000 when he left in 2009. Industry analysts say the flag carrier could just do with one-third of its current staff especially with cuts in routes in the past six months.
Cutting staff could improve costs but is seen as a major political liability in Selangor, where MAS has most of its operations and the state that Najib wants to win back in the next elections.
The entire airline group posted a net loss of RM1.28 billion for the fourth quarter of last year, bringing its total net loss for 2011 to RM2.52 billion. MAS, however, did see a marginal increase in group revenue, going up two per cent from the previous year to RM13.9 billion in 2011.
The airline attributed the losses to the increase in fuel price, which rose up from US$95 per barrel in 2010 to US$133 per barrel in 2011.
The bigger-than-expected losses were also due to additional provisions like redelivery of aircraft, impairment of freighters and stock obsolescence.
MAS hopes to finalise and announce a plan to raise funds and strengthen its balance sheet within the next 60 days. This is critical as the carrier’s plan to deploy 23 new aircraft this year would cost some RM6 billion.

Wednesday, 7 March 2012


So it is true, what people are saying.

TF is so very cunning,
He can sell fridge to the Eskimos,
Disneyland to Walt Disney,
Virgins to Richard Branson,
and last but not least,
MAS to Khazanah.

Air Asia : "Now Everyone Cannot Fly"

Tony Fernandez took over Air Asia in 2001. In 11 years of rock and roll growth, Air Asia has become the largest low cost carrier in Asia. This is a fantastic achievement by any measure.

However the intermittent announcements by Air Asia that they are cutting routes indicates not everything is going on as planned. I hope they do better. We really want our Malaysian companies to do well and succeed. It is good for the country and for all of us. Maybe 11 years down the road a reality check is due.

The frequently heard comment even among Cabinet Ministers is that Air Asia flies in about 10 million visitors to Malaysia annually.

A top CEO of a conglomerate pointed out recently that many of these passengers were "stolen" from MAS. There is much truth to this. In the past few years, even my family and I have travelled almost exclusively on Air Asia. Before we used to travel on MAS. So to say that Air Asia flies in an extra 10 million "new" visitors into Malaysia is perhaps quite off the mark. They have actually taken business away from MAS.

Air Asia does take the Nobel Prize for publicity stunts, aggressive ads and staying firmly in the public eye. Do you all remember when Bali suffered the bomb attacks? People just stopped going to Bali. Stepping up to the plate, Tony Fernandez announced that Air Asia would provide one million free tickets for flights into Bali. (The return flight saya tak tahu - usually they charge higher fares for the return flight). Immediately Tony Fernandez received huge publicity and the everlasting gratitude of the people of Bali.

But did anyone stop and figure things out a little ? One million free tickets is a lot of flights. Considering an Airbus A320 seats 140 passengers, that works out to 7142 flights. If AA flew just one flight a day to Bali, it would take 19.5 years to give away all those one million free tickets to Bali. Surely a lot of gimmickry was involved. It was a publicity stunt. The fact that the headline grabbing announcements were made while the ashes of the Bali bombings were still warm does exhibit some ruthlessness.

Similar to the claims of having brought in 10.0 million visitors to Malaysia.

Then Air Asia also went head to head with MAS on many routes, including in Sabah and Sarawak. In the face of AA's stiff competition, MAS retreated from these routes. AA became the monopoly operator on some of these air routes. Now Air Asia themselves are cutting back and shutting down these 'unprofitable' roots. So from "now everyone can fly" it has become "now everyone cannot fly" on some of these air routes.

A few days ago I also received this sms from someone :
"Air Asia is in mess. Biz model not working. Can't fly to Brisbane and Qatar for not paying. Singapore not gonna service their Airbus."

If true this can be quite serious. The fact that Air Asia has been cutting some routes entirely is no mere coincidence. I also think that the recent share swap where Air Asia has become a shareholder in MAS is perhaps a lifeline for Air Asia. I dont think it adds much value to MAS.

I received another sms from another former top gun in our corporate circles. The sms said :

"I luv ur Air Asia Mas conversation (btw a little bird whispered to me that the MAS share swap with AA comes with NO due diligence #*?- go check out). Yes - they were appointed during Badawi's time. Was Azman Mokhtar a "sizzling" investment banker b4 joining Khazanah? Smith Barney apparently calls him a "Duffer" - find out when he was in Smith Barney what was his outstanding achievements? Then Bina Fikir? Asset unbundling? In ***** we say "angkat kain sarong jual semua". Also if you look @ BOD of Khazanah you have mostly Melayus who failed - Azlan Hash*m one of them."

I received this sms after my post on Khazanah Nasional. So the MAS share swap with AA was done without a DUE DILIGENCE? If so, that is not very prudent at all for MAS.

But why would super duper, high flying Air Asia enter into a share swap with MAS? Especially without a DUE DILIGENCE exercise? Maybe Air Asia does need to enter into a share swap with MAS in a hurry. They bought 200 Airbuses last year and are cutting routes at the same time. That does not sound right at all.

For example MAS has good technical back up and repair facilities for their planes including the Airbus. If it is true that "Singapore not gonna service their Airbus" then of course Air Asia's tie up with MAS will assist in servicing the 200 new Airbuses.

In the past AA has built up a not so good reputation of not paying their bills on time especially to MAS for technical services and Malaysia Airports for airport facilities. I hope this share swap does not result in MAS holding the short end of the stick again. MAS is a taxpayer owned airline.

Somehow I get the feeling that the MAS - Air Asia share swap is the beginning of another flight into the unknown for MAS. I also get the feeling the folks in Air Asia have their flight paths mapped out a bit more carefully.

AA's business model based on breakneck growth may have to be relooked. The pace is perhaps really breaking their neck. I think there is a huge market that really appreciates the services provided by AA. Some fine tuning and clear focus on better delivery should take them to greater heights.

Friday, 2 March 2012


Mother ship is sinking!
“Old Man” wrote on March 2, 2012 at 12:19 am;
“As I see it, it is all convenient creative accounting.
Take a hit in 2011. Charge provisions for 2012 expenses and some mysterious expenses in the 2011 books and:
1. Justifies the illogical actions already taken.
2. Justifies the harsh actions planned.
3. When 2012 ends, a nice recovery (comparing to 2011) can easily be shown.
Oldest trick in the books.”

To further emphasize on how serious the issue below
we had earlier written an article on Friday, 5 June 2009 as summarized below:


1.   MSS – MAS Mutual Separation Schem
Rather than retrenching the staff that cost the PUBLIC a cool RM 500 million in 2006, MAS    
could have adopted the following strategy (still relevant now) to resolve MAS problems faced     
then by:
a.  Spinning off Engineering and Cargo Division (thus reducing the staff numbers by nearly
      6000 but with ZERO cost)
b.   LIFO: Last in, First Out (NOT FIFO. First in, first out whereby many employees who were   
     near retirement age were retrenched according to one standard formula instead of another     
     alternative option)
c.   Engaging the much proven local expert to carry out third party audit / surveillance and
    propose recommendations (NOT the expensive and yet unproven Foreign Consultant)

Based on the FY2007 Financial report, MAS employees strength were reduced from 18,641 (2006) to 17,991 (2007) but staff costs escalated from RM 1.872 billion (2006) to RM 2.001 billion (2007). So where are the cost cutting measures?
After all the over hype BTP (Business Transformation Plan), sure enough they are now facing bigger problems because instead of looking on intrinsic quality and efficiency, they brought it more new personnel (again with zero aviation knowledge), so much so that MAS is now top heavy, sluggish and rather than being the leader, they tend to trail Air Asia business strategies (remember the advertisement colour scheme, ELF (Everyday Low Fares) etc, etc.
On the MSS, this is what the smart IJ and team could have done in 2006 instead;
Thursday, 03 November 2011 11:05
KUALA LUMPUR: Hong Leong Bank Bhd has embarked on a voluntary separation scheme (VSS) as part of its consolidation exercise towards growing its newly enlarged entity.
The VSS payment formula is based on a VSS multiplicand that ranges from 1.4 (for executives) to 1.6 (for non-executives) multiplied by the length of service (capped at a maximum of 22 years) multiplied by the basic salary or 50% of total monthly salary until retirement, whichever is lower.

2.   Capital injection of RM 3.67 billion in 2007.
With reference to MAS 5 year financial performance ended 2007, there was a huge increase in Cash & Bank balances in 2007 in excess of 3.67 billion as compared to 2006.
♦    Where does the huge capital injection of RM 3.67 billion comes from?
♦   Why MAS need to borrow 859 million when they have sold fixed assets for 594 million and increase the shareholders equity to 3.9 billion in 2007 from 1.8 billion in 2006?
♦   Why do MAS need to hold 5.25 billion in Cash & Bank balances whereas in the past 5 years, their average balances were only around 2 billion?

From the above performance, it clearly illustrated that in FY 2007, profit of RM 852 million was not gained from operations but ‘creatively’ generated by selling her fixed assets and borrowings of RM 859 million.

3.   Continued purchase of A380 and late decision on B737-800 orders in 2008.
Even though A380s were ordered circa 2005, MAS missed a golden opportunity to cancel the order in 2007 because of manufacturing defects faced by Airbus. MAS has been extremely lucky that the A380 were further delayed to 2012. Imagine what would happen if MAS had the aircrafts now especially with the severe global economic downturn, we could have been worst off compared to SIA, Qantas and Emirates.
A former MAS MD who has been keeping a very close eye on MAS had said in June 2006 that “their argument is that SIA, Emirates and Qantas have it, so we too must have it to be (in sync) with the market” demonstrates poor business sense and justification.

4.   Safety Issues
Two very serious incidents caused by MAS in 2008 which involved Saudi Arabia's B747-300 (wet leased from Air Atlanta) that caught fire in Bangladesh (subsequently written off due damaged beyond repair) and another Saudi Arabia B777's extremely expensive damages on both engines.
Yet, not many personnel have been informed about the real cause of these expensive and potentially fatal incidents and the preventive measures to be taken to avoid similar incidence.

5.   Fuel Hedging
As at 19 February 2009, the Group has entered into various fuel hedging transactions for periods up to 31 December 2011 in lots totaling 17,350,000 barrels.

Thursday March 5, 2009 (Another IJ and team brilliant moves)
PETALING JAYA: Malaysia Airlines (MAS) stands to chalk up close to RM3bil in hedging costs over the next two years while its competitor AirAsia Bhd enjoys the benefits of lower crude oil prices, analysts say.
An analyst estimated that MAS was currently sitting on a collective paper loss of around RM2.8bil for financial year 2009 and 2010 as a result of its hedging activities.

6.   I rest my case!
As at Dec 31, 2007, MAS had RM 5.25 billion in cash and bank balance and as at Dec 31, 2008, MAS had a cashpile of RM3.57billion. Where has the RM 1.68 billion gone to???? (Dec 2011 – less than RM 1 billion)
Why buy an airline that normally gives a return of 2 – 5% p.a.? The cash will be better spent if MAS buys back GE Engine Services which can easily give a return of 20 – 30 % p.a.?

The challenges and recommendations.
a.    This incomprehension has to be contained, if not eradicated at all costs or it will lead to a vicious cycle of self-destruction.
b.   We must welcome challenge and conflict as a source of creativity and learning opportunities.
c.   We need above all else, world-class management and work practices. We need to routinely consider the unthinkable and the business we are in, even when things appear to be going well.
d.   Ultimately, we are responsible for what we do and for what we don’t do.

2 years 9 months now, they woke up to face the most serious and crucial realities of the present. It is a NATIONAL TRAGEDY indeed!

Original here
MAS’s response here
More idiots here