Friday, 27 April 2012


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.

Friday April 27, 2012

Is the AirAsia-MAS share swap off?

Friday Reflections - By B.K. Sidhu

Rumours are swirling around that the AirAsia-Malaysia Airlines (MAS) share swap and even the collaboration is off.
Early this week, a news report from Singapore said that threats by the national carrier's 20,000 employees had pushed Putrajaya to unravel the tie-up between AirAsia and MAS.
A day later, a local report said the share swap would be an item on the agenda at Sunday's Umno supreme council meeting.
Yesterday, the opposition said the Government should admit that the MAS-AirAsia share swap was a mistake.
Some blogs have gone to the extent of explaining in great detail why the share swap should not have occurred in the first place.
(Click below for more details)
Some say the announcement will be made by the powers that be to scrap the share swap mid next week while others say it will be within the next one to two weeks.
MAS has eight unions and associations and they have come together to form a group to oppose the share swap. The group is against the share swap, not so much the collaboration, and it claims that it represents most of the 20,000 MAS employees.
The group issued a memorandum to the Prime Minister and gave reasons why the deal should be called off in February. Last month, the memo was circulated to several MPs.
This topic has been discussed by many quarters, including the powers that be, and even the views of former MAS managing director Tan Sri Abdul Aziz Abdul Rahman were sought.
The question that remains unanswered is whether the share swap has really been called off, or it is still intact, amid all the objections.
For that, we have to wait, but if you ask AirAsia supremo Tan Sri Tony Fernandes, he was reported to have said that “media report saying the Government has decided to unwind the deal is not true.''
Even Abdul Aziz also believes that the deal is still intact.
MAS Employees Union (Maseu) president Alias Aziz said the union “will continue with its fight for the share swap to be dismantled because it favours AirAsia.''
But this has been refuted by Deputy Finance Minister Datuk Dr Awang Adek who felt it was not one sided.
So long as there is no share swap, both airlines can cooperate and Alias says MAS works with many other airlines including Qantas, Singapore Airlines and even Cathay Pacific.
“The share swap must be cancelled. There is conflict of interest,'' Alias said yesterday.
The share swap and collaboration was forged between the two airlines August last year and as a result of that, Fernandes and his partner Kamarudin Meranun sit on the board of MAS by virtue of their 20% stake in MAS.
Intact or not, the entire share swap and collaboration has come under the spotlight since it was inked and the changes made do not favour the staff. Some have said there is erosion in value and decline in staff morale.
But despite turbulent times, the staff have done what is expected of them and the on-time performance has averaged 92% the past four months.
For an airline to take off, there are 60 different activities that need to be done and everything has to be done in sync so that the take-off is on time.
These includes the technical checks, booking and sales of tickets, fuelling, getting the food prepared and despatched onboard, all the safety aspects, pilots and crew arriving on time and passengers taking their seats before the take-off.
There are about 100 take-offs in a day and imagine the work involved in putting a flight in the air without the support of the staff, this would have been a very difficult task.
Whether it is for the better or worse for the share swap to be scrapped, the thing that needs fixing fairly quickly is the element of trust and confidence. There is distrust and disengagement. And that is a huge challenge in itself.

Wednesday, 25 April 2012


Unions convinced Putrajaya to rethink MAS-AirAsia deal, Singapore BT reports

Sources also told The Malaysian Insider last month that Putrajaya was having a relook at the share swap and was considering a special entity to take MAS off the hands of its main shareholders, Khazanah Nasional Berhad and Tune Air.
April 25, 2012
KUALA LUMPUR, April 25 — It was the powerful MAS unions and their political threats that had moved Putrajaya to unravel the MAS-Air Asia share swap deal, Singapore’s Business Times reported today, citing executives familiar with the decision.
The financial daily pointed out that union leaders had recently dangled their votes openly before the government by saying their over 20,000 members would back the opposition if the proposed tie-up materialised.
“Indeed, union leaders met with opposition leader (Datuk Seri) Anwar Ibrahim recently. Only later did they meet up with Mr Najib (Prime Minister Datuk Seri Najib Razak),” the daily reported in an article today.
The newspaper noted that the controversial share swap deal has drawn heavy criticism since it was announced last August, including some from the “right-wing elements” in Umno but largely from the ailing carrier’s unions.
Among others, AirAsia chief Tan Sri Tony Fernandes was accused of taking advantage of the loss-making national airline for his personal ambitions, the daily said.
“Since the deal was announced, for example, AirAsia has won approval from the government to fly two routes it has long coveted: to Seoul and Sydney,” it reported.
According to the business daily, Fernandes was also criticised when MAS suddenly agreed to part-sponsor Queens Park Rangers, the English Premier League (EPL) club that he had bought. AirAsia had previously agreed to sponsor the club.
But despite this, executives familiar with the government’s decision to unravel the airlines’ tie-up told the Singapore BT that it was the unions that finally made up Putrajaya’s mind.
This, the daily wrote, is a clear reflection of the political dimensions of the national airline.
Along with the controversies surrounding Lynas Corporation’s rare earth plant in Kuantan and the National Feedlot Corporation’s (NFCorp) alleged mishandling of the country’s national cattle farming scheme, said Singapore BT, the MAS-AirAsia share swap deal has been identified as one of three key issues that Najib must resolve before the 13th general election.
MAS has had a turbulent past decade after the government bought back the airline from former corporate high-flyer Tan Sri Tajudin Ramli at RM8 per share or about double the market price at the time.
It then had its books cleaned up in 2002 under the wide asset unbundling (WAU) exercise that was engineered by the BinaFikir consultancy, then led by current Khazanah managing director Tan Sri Azman Mokhtar.
The state-owned airline had two rights issues since the WAU, raking in RM1.6 billion in 2007 and RM2.67 billion in 2010 to fund its operations and fleet purchases.
It was also lacklustre financially, shocking the market with massive losses last year even as rivals such as Singapore Airlines reported profits, albeit reduced.
The national carrier also suffered the indignity of having its market capitalisation surpassed by younger upstart AirAsia, after its share price fell to record lows.
A share swap and accompanying collaboration framework with AirAsia unveiled last August was supposed to help put MAS, which posted its biggest ever annual loss in February, back on firmer footing amidst an increasingly challenging aviation environment.
Under the share swap, AirAsia’s main shareholder, Tune Air Sdn Bhd, exchanged a 10 per cent stake in the budget carrier for a 20.5 per cent share of MAS from Khazanah.
The idea was to have some of the business acumen that took AirAsia from a two-plane outfit to Asia’s largest budget airline in just 10 years, rub off on the national carrier.
Following the share swap, the management team led by new managing director Ahmad Jauhari Yahya put together a business turnaround plan last December to help propel MAS back to profitability.
The new management’s efforts to restructure the airline and put it in a more competitive position, however, caused friction with the unions and employee associations.
Sources also told The Malaysian Insider last month that Putrajaya was having a relook at the share swap and was considering a special entity to take MAS off the hands of its main shareholders, Khazanah Nasional Berhad and Tune Air.
According to Singapore BT, no details of how the deal would be unravelled have yet surfaced, not even from Fernandes.
“No one has talked to me yet,” he was quoted as telling Singapore BT in a text message. “There are lots of rumours. I am still doing my best.”


Cooperation to face regional competition

"Cooperation between the two companies will certainly give more edge to them but they cannot interfere in the respective entity."


Since MAS and AirAsia signed the transfer of shares agreement, there are many criticism been made that some of the beneficial aspects of the agreement have been overlooked. This is common when partition voices are able to overwhelm the good points in the agreement.

In August 2011, the biggest shareholder of MAS, Khazanah Nasional Bhd. agreed to swap its share with Tune Air Sdn. Bhd., the biggest shareholders of AirAsia. This saw Khazanah Nasional obtain 10 percent of interest in AirAsia while Tune Air get 20.5 percent interest in MAS.
Khazanah also agreed to take 10 percent interest in AirAsia X, a subsidiary of AirAsia, which managed the long haul flight of the budget airlines.

A comprehensive cooperation framework (CCF) was also signed for the realization of cost efficiency and enhanced revenue in the purchase of aircrafts, engineering, support service, cargo services, catering and training among the three airlines.

CCF which was concurrently signed by MAS, AirAsia and AirAsia X, should see MAS focusing on being the main airlines that provides comprehensive service, AirAsia as regional budget service airlines while AirAsia X in low-cost airline that provides long haul flight services.
The share swap which is incorporated in the CCF received negative response from the various sectors including the MAS staff union.

Focus is on many trivial issues to the point that they overlook a more crucial matter such as beneficial cooperation.
Reciprocal cooperation for mutual benefit is normal and it can be done in any business organization either via the share swaps of two or more companies.
Cooperation between the two companies will certainly give more edge to them but they cannot interfere in the respective entity.
What is happening now is that both entities are facing healthy competition and ensure that they are on the right flight path in maintaining their status as relevant flight entities.

Former MAS pilot, Capt. Zakaria Salleh is of the view that if the staff of MAS and AirAsia are competing against each other, they should now cooperate closely to continue improve their respective service.
He said, the MAS cabin crew which amass many international award surely be able to share their skill with their new colleagues while AirAsia staff can share their knowledge on cost saving.
“The engineering staff of MAS which obtain excellent aircraft servicing record can also benefit AirAsia. They must move as a team and no longer as competitor, in order to enable MAS and AirAsia to maximize their resource in facing the challenging environment,” he said.

In many cases, competition gives advantages to consumers but it can also cause wastage especially to a small country like Malaysia which has limited human resources.
In this context, it is important that MAS and AirAsia work together so that this wastage will not continue which in the end create disadvantages and giving the edge to the regional competitors.

The cooperation in the field of oil and gas between Petronas and Exxon as in the Tapis oilfield, Shell and Petronas in Gumusut-Kakap, Murphy and Petronas in Kikeh and and a more dramatic win-win cooperation take place between Shell and Exxon in the oilfield of Brent in the North Sea of North United Kingdom. The cooperation took place among the competitor without sacrificing their identities and business objectives.
Shell and Exxon compete to enlarge their areas of operation in the entire globe. What is needed is the sincerity in the cooperation to gain maximum benefit.

Another example is the cooperation between Air France + KLM, though they come from different countries and always competing.

In conclusion, an excellent cooperation need not in the form of share swap. The dynamic exchange in the airlines industry probably may not allow MAS to move individually because it will affect the airlines as this is part of the factor that cause its major losses.

Friday, 20 April 2012

People in power never learn.

History is a great teacher but it seems that people in power never learn. 
It took them 11 years to understand ‘Organisational Behaviours’ and believe me, it is going to take them another 11 years to ‘reengage, regroup, re-boot and re-set’.

Friday April 20, 2012
MAS needs to re-engage with its employees

PETALING JAYA: Malaysia Airlines (MAS) is said to have gone back to the drawing board to re-set its business plan, four months after it unveiled its new business plan.

Those in the know claimed that the thrust forward was for the team to “re-engage and re-group the employees, re-boot and re-set the business plan because of several reasons and circumstances.

“They have to re-set according to priority. Eight months have passed and the visibility of change still seems vague. The need to re-set becomes critical as there is resistance to the way some things are being planned and done,” said a source.

The need to re-engage with the “staff is vital as there is discontent and there are some valid reasons why there are pockets of people who are still unhappy. Some committees have been formed to address this,” said a source.

The plan must also be reviewed because there are “certain constraints and some routes cannot be rationalised and there is also a need to revisit the cost reduction initiatives,” added the source.

MAS saw the entry of a new team after the share swap and collaboration agreement inked with AirAsia in August 2011. The team announced its business plan to turn MAS around on Dec 8. The team boldly outlined the turnaround in the form of “game changers' and “recovery plans.” The game changers include the launch of a new regional premium carrier by the middle of this year, exploring more alliances, enhancing collaboration with AirAsia, and spinning off its ancillary businesses, which include its maintenance, repairs and overhaul (MRO) unit. The new carrier is to link Malaysia with Asean, South Asia and Greater China.

However, two weeks ago the airline said it would do away with the plan to set up a short haul airline and instead it would opt to park its short haul operations in a division.

“The idea of parking the short haul operations in a division may also be reviewed from the cost and purpose perspective. Could it be done without duplicating resources for network planning, marketing, overseas stations, and even baggage handling. Would it better for interlining to just have all parked under one airline like the situation now,” said a source.

He also pointed out that in terms of interlining it was better to have both the short and long haul operations operate under one unit.

Still, some believed that the short and long haul operations would be redefined via aircraft type under the new plan.

Thus far, MAS is said to have changed its organisational structure three times since the new team took over.

Friday, 6 April 2012


European on March 16, 2012 at 9:30 pm

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…

Old Man on March 18, 2012 at 7:36 pm
If the MAS Strategic Comms person described the discussion on the unwinding th CCF as interfering with the authorities considerations and speculative, I see the PR of TS Md Noh as even worse.

TS Md Nor has preempted the eagerly awaited decision of the PM. TS Md Nor has now put undue public pressure on the PM to decide in favor of the CCF. TS Md Nor has publicly told the PM that he and the BOD are in favor of the CCF.
By reviving hs plans to relocate Air Asia Grop to Indonesia, Tony Fernandez has also put the pressure on the PM. To put it bluntly, PM, you screw me, I leave Malaysia and take my business where he climate is more conducive to my style of business.

Well, PM, for playing dumb and taking such a long time to do something decisive about this travesty, you have now landed yourself in hot soup. It damn if you do damn if you dont. But remember it is Selangor that is at stake.

Shameless AMOK on March 19, 2012 at 1:25 am
What have been stated by the Italians were about the incompetency of the three stooges in MAS namely Tan Sri Md Nor, Rashdan and AJ. It was all due to idea hatched by the former BinaFikir boys Tan Sri Azman and Rahsdan. They have done once to MAS and now they did it again this name with Tan Sri Azman in Khazanah and Rashdan seconded to MAS. This will be another WAU to asset stripped MAS. Watch out MAS staff. MAS staff must be in full alert to watch out what the three stooges are doing in MAS and exposed each and every time so that they have no where to hide. Sabotage their hidden agenda so that MAS will be save.
This Tan Sri Md Nor has done so much damage to MAS under WAU and yet he was trying to defend Rashdan and AJ. When they had to rely on PlaneConsult to chart their course what hope has MAS go under them. PlaneConsult MD is Conor McCarthy and he is also the co-founder of AirAsia and a director of AirAsia. Need I tell you more? MAS will be cannibalized until nothing in a few months time if not weeks.

Ahmad of MAS on March 19, 2012 at 2:05 pm
Share swap and CCF were con jobs from the start. using the media especially the Star to hook wink the nation that MAS is in trouble and AirAsia is healthy. Bullshit.

It is AirAsia and AirAsia X Sdn Bhd that are in trouble. Hence the infiltrations of AirAsia staff into MAS. Clear examples: Rozman Omar as CFO, Azhari Dhallan as head of Engineering and Nor Zalida Ahamd as head of Strategic Com. These are all idiots whoe will later join the Panamera Deadwood in MAS.

PM must step in now and I mean now to stop the rot created by Amok’s crony Rashdan, Tan Sri Md Nor the man behind WAU and AJ the chair warmer. Sack these idiots and MAS will be saved.

We know better in MAS. So PM please act and act now. TIme is not on the said of MAS because the idiots and the Red Indian are using PlaneConsult to screw up MAS.

Kunyit Hidup on March 21, 2012 at 12:37 am
Rome is not the only station, similar fate for staffs in other bungkus stations too. Pity them very loyal to MAS though non-Malaysian. Many of them clocked more than 10 years. Suddenly – here is your 3 months Pay & Go!

Current sifus are inadvertently claiming that the previous managements were useless by showing the unbalance book by minus nine-to-ten zeros. As a result of that, let us choose who is the victim of mismanagement:

A. Former MD – graduated as MAS Chairman, Md Noor
B. Former MD – transformed as a Malaysian Minister, Idris Jala
C. Former MD – promoted as one of Khazanah CEO, Tg Azmil
D. Current staff – cut to the bones or take Pay & Go.

kapakhalus on March 21, 2012 at 3:23 pm
The regimes after Tan Sri Aziz have never surpassed him. When Tan Sri Aziz sold and lease back few aircraft to generate some funds and to pay some bonuses to MAS staff, MAS maintained the ownership of its properties (buildings, offices, stations’ offices, holiday apartments so on) worldwide. The lease back scheme provided MAS with the option to own the aircraft again.

However, when Mohd Nor and Rashdan came aboard, they unbundled MAS aircraft to SPM (Syarikat Penerbangan Malaysia) and “pawn” MAS areas at the KLIA to generate some multi-billion funds.

But when Idris Jala and Azmil were at helm, they sold 90% MAS properties to generate a billion plus plus funds. They spent off the Government pay-off for surrendering MAS East Operations to pay many MAS staff who were less than two years to retire. They did not get the numbers they targeted and have bad forecasting as they hired more staff soon after.

Now that Mohd Nor and Rashdan are back and brought in a poor AJ as the Group CEO, they collaborate with AA to spin off what are left with MAS:-
(a) MAS owned profitable business units like Flight Simulator, MAS Academy, and the among the biggest – MAS Cargo and MAS Engineering. Once spin-off, MAS owned very little or nothing and for every services, MAS will be paying extra instead of at cost currently.
(b) MAS major and mandatory expenditure disguised under procurement collaboration – Insurance which a de javu of TR’s Cenderawasih Sdn Bhd
(c) among the last remaining MAS “properties” – MAS Complex A and B, MAS office in London for RM1 billion plus.
(d) this team is waiting to sign off with AA JV companies to spin off MAS remaining assets.
(e) to break MAS operations into short and long hauls which made no business sense at all.
(e) the staff either in the air or on ground have given undivided supports not only to maintain their quality of works and prize performances which won many accolades. Malaysians are very proud of MAS achievements.

ALL the brilliant minds at the helm of MAS after Tan Sri Aziz went on selling or lease back of MAS properties that MAS is unlikely to own them back. These “brilliant mind of Ivy Leagues” graduates are best at selling MAS properties but not on selling seats to generate more revenues to improve cash funds. ALL of them cried high and higher operating cost as if it was not the case in the past and not happening to other premier airlines. ALL of them making fancy presentations to WOW the audiences. ALL of them brought in many Consultants and ex-Consultants at top pays but fail to boost MAS core businesses.

None of these brilliant minds really posted operating profits. The Board and the Top Management teams made and decided on strategic matters.

If the Government fails to act fast, MAS is left with almost nothing. MAS will be stripped to the bone. Almost half of MAS existing workforce will lose their jobs and will impact directly on their dependents.

AIR IDIOTS on March 30, 2012 at 11:02 pm
Yusof uban, ha ha another deadwood from Md nor MD era. Md nor , AJ n Danny were humiliated big time at townhall yesterday. Never in corporate history Malaysia or even in the world , the top management were ridiculed and made to look stupid. Well done, MESA esp Matdiah. You are exemplary Malaysian indeed.

Anonymous on April 3, 2012 at 12:21 pm
I must say that being the only low cost airline in the world AA, compare to Jet Airways, Jetstar, Kingfisher etc…Is the only airline that CLAIM to be profitable all years around… Senang dpt landing right, n the best part can overlap with national Carrier MAS route… Management still giving FUEL reason… AA pakai air ka ?
Everytime big bosses tukar, new batch of kroni bwk whole batch of team, bosses leave, tapi kroni tinggal, new boss again with new set of kroni masuk errr must i said new TEAM…pasal tu lah if we look at Australia operation at least 3 manager satu route, if ade SYD! MEL! ADL!PER, kira dah ade 12 MANAGER tu, aprt manager, station manager, area manager….wahhhhh belum kira executive lagi…..even SQ they only have only 1 manager to control whole operation in Australia, yg lain cuma executive…..if dah berzaman asyik rugiiiiii aje, well which department n who should we executed first? Definately the bosses coz they are paid ratusan ribu, marketing people asyik lah failllll , they should be fired, mengakulah, poor management n big boss yg travel like this arline belongs to them. on April 4, 2012 at 11:29 pm
Another bollocking parrot :
“Walau bagaimana pun, kerugian berkenaan hanyalah berbentuk kerugian perakaunan (paper loss) dan bukannya kerugian sebenar MAS. Secara keseluruhannya MAS telah mencatatkan keuntungan sebanyak RM522.95 juta pada tahun 2009 dan RM237.35 juta pada tahun 2010.”

The reality:
As at Dec 31, 2007, MAS had RM 5.25 billion in cash and bank balance and as at Dec 31, 2011, MAS cash pile was less than RM1 bil.
Where has the RM 4.25 billion gone to in 4 years?