INCOMPETENCE BREEDS INCOMPETENCE

Source: https://mpmsavemab.wordpress.com/2016/07/09/incompetence-breeds-incompetence/

MASTROUBLESHOOTERS are very concerned on the latest development in Malaysia Airlines Berhad (MAB) especially when MAS former Managing Director, Tan Sri Sri Abdul Aziz Abdul Rahman said that “The failure by the board members of Malaysia Airlines Bhd to steer the national carrier in the right direction should ultimately be blamed for the shoddy performance of its staff” (http://www.themalaymailonline.com/malaysia/article/malay-business-group-blames-mas-board-for-workers-poor-performance)

MASTROUBLESHOOTERS have also triggered many alarms as early as 2003 but were not taken seriously or perhaps they do not seem to be doing the right things and quite evidently they do not know the right things to do a.k.a INCOMPETENCE.

Sad things will happen when the responsible and accountable parties are weak and incompetents. (http://www.jaluch.co.uk/incompetence-breeds-incompetence/)

Thus, MASTROUBLESHOOTERS are compelled to share our experiences and knowledge below with MPM to “save MAB” and prevent another cycle of self destruction. As an introduction, allow us to reproduce our previous report dated 5 June 2009 below which again has been ignored or perhaps as quoted many times by Tan Sri Abdul Aziz “There are many very smart people who could not understand simple arithmetics”.

6 MAJOR THINGS THAT MAS SHOULD HAVE HEDGED INSTEAD

On Friday, June 5, 2009, we wrote an article as summarized below:

1. MSS – MAS Mutual Separation Scheme

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:

1. Spinning off Engineering and Cargo Division (thus reducing the staff numbers by nearly 6000 but with ZERO cost)
2. 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)
3. 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 billions (2006) to RM 2.001 billions (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.

2. Capital injection of RM 3.67 billions 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.

Questions:

♦          Where does the huge capital injection of RM 3.67 billion comes from?

♦          Why MAS need to borrow 859 millions when they have sold fixed assets for 594 million and increase the shareholders equity to 3.9 billions 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 billions?

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 millions.

3. Continued purchase of A380 and late decision on B737-800 orders in 2008.

Eventhough 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.

Source:http://biz.thestar.com.my/news/story.aspfile=/2009/3/5/business/3405345&sec=business

Thursday March 5, 2009

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 RM3.57bil. Where has the RM 1.68 billion gone to????

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.

1. This incomprehension has to be contained, if not eradicated at all costs or it will lead to a vicious cycle of self-destruction.
2. We must welcome challenge and conflict as a source of creativity and learning opportunities.
3. 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.
4. Ultimately, we are responsible for what we do and for what we don’t do.

Full details below:

http://rockybru2.blogspot.com/2009/06/six-things-mas-must-do.html

http://rockybru2.blogspot.com/2009/06/mas-responds-to-hbloggers-posting.html

http://www.rockybru.com.my/2010/08/why-sia-is-worth-s187-b-and-mas-is.html

Evil flourishes when good men do nothing!

FORMER MAS STAFF SPEAKS: There's much fuss about Jentayu going public with their offer to Khazanah. It deem as unprofessional. Not going to argue with that. There may be truth in it at Corporate level. There's also some good in it as a layman tax payer like me, least I know there's an option available on the table and when if Khazanah fail, we know wrong decision made.

Am not hoping that Khazanah fail, in fact I really hope they could revive the National icon, but looking at things, it is pointing to that. This is because of the steps taken ever since the 12 point plan announced in August, after 4 months, no progress seems to be made. In August the announcement made that the current CEO contract is renewed till July 2015 where the New Co takes over, recently announced of Mr Muller will take helm on January and hoping that he could be released from his contract that ends May as early as March 2015. Now, for a stupid man like me, I am thinking like are we going to operate with 2 CEO between March-July or May to July? Even if it is a handing over kind of thing, do the Company need to pay 2 highly paid personnel in a CEO for 2-6 months? As said earlier, a stupid man like me won't be able to understand. 

Another point is, while waiting for the New Co to take off, what are the things that are currently be done to stop the rot? 3rd quarter financial result is not encouraging at all and we are in the last quarter, are we saying that while waiting for the New Co and the new CEO, all remains status quo? Means let it ail at the moment till the MAS Act in place & New Co set up? At last while acknowledging that the Industrial Relation needs to improve by the point 9 in the 'Rebuilding the National Icon" paper, i.e.. Strengthen industrial relations and internal alignment a. A critical component of the Recovery Plan involves significantly improved industrial relations. b. New measures and practices, including an enhanced Employee Consultative Panel (“ECP”) to better align staff, unions, and management, are critical conditions of the Recovery Plan. will only take place after the other 8 points settled? If a Head of Division or Management that will not be absorbed into the New Co identified, can't they be removed now? Maybe to save face, I agree, but they should be moved to another area where less critical so that less damage can be inflicted. I am quite sure some of them already have some indicator that they will not be offered, what do you think the effort they will put into the airline? Most definitely not 100%. They may be seen as 100%, but in their heart they have stated to look for other opportunities outside. Is this good for the recovery plan?

In June 2013, I was involved in a revamp of a Chinese owned Company where they have removed 70% of their top Management via VSS. The manner they are doing it, from a Corporate background person like me, I will say it is ruthless. But they are not bothered because they say the longer the delay, not good for the Company. It was top secrecy, they only know of it in the morning of the meeting, meaning yesterday work was a 100% effort. They were paid handsomely that will keep them survive at least 3 months after the VSS, so they can look for job within the 3 months and not during Company's time. Heard of a proverb, "Sometimes we need to be cruel to be kind"?

As mention time and again, I am involved in the current Company's operation though I am no longer in service. I do it as a favour to friends close to me. The friends I am referring to sometimes comes from the management side, some from union side, Small favours like assisting in investigation of cases, drafting letters, etc. Something need to be done immediately and not wait for July 2015. Simple things sometime made difficult because lack of knowledge and me being the subject matter expert then, gain the knowledge the hard way....by making mistakes along the way when was in service with the Company, helping out is a gesture of appreciation for who I am now. I owe much to the Company. If there's a Khaznah people reading, please act immediately to put the house in order and not wait till July.

DENIAL SYNDROME

DAULAT TUANKU!

Stop being in denial, pay gap causes graft, Perak Sultan tells Putrajaya 

Putrajaya must stop being in denial about wealth inequality realise that hardship and poverty are fuelling corruption, Sultan Nazrin Shah, said today. he cited figures that showed low earnings of a vast majority of households noted that those struggling to make ends meet were exposed to petty corruption.

The sultan's speech at the Malaysian Anti-Corruption Commission's (MACC) 47th Anniversary event at the Kuala Lumpur Convention Centre today follows debate over Putrajaya's recent announcement that average household incomes have surpassed RM5,900.
corruption among high-ranking officials due to greed

lower-income groups want to avoid corruption by taking second jobs to sustain families.
This will eventually affect their productivity at their workplace, he added.

This is the reality. The number of them will increase if the effective formulas to address housing, transportation and medical assistance are not introduced. The country has to wake up and realise what is happening.

He cited New Economic Model report 80% households earned RM5,000 a month

and of this, 40% were earning less than RM2,000 a month.

78.6% of EPF account holders earning less than RM3,000 a month.

ASB - 75% of account holders only had an average of RM611 in savings.

Sultan Nazrin said data was worrying 

Source: http://syedsoutsidethebox.blogspot.com/2014/10/daulat-tuanku-hrh-sultan-nazrin-shah.html?m=1

More tips for Khazanah

There is some additional comment regarding the benchmarking of SIA and MAS. Whenever people make comparison of staff productivity of SIA vs. MAS, they use the figure of 14,000 plus staff for SIA and 19,000 plus staff for MAS. 

This is completely wrong! The 14000 plus staff of SIA is at COMPANY level, while the 19,000 plus staff of MAS is at GROUP level. According to the SIA 2013/2014 Annual Report the SIA GROUP workforce is 23,716 people. Those people should use this number instead of the 14000 plus number. 

According to page 6 of the MAS 2013 Annual Report, the workforce at COMPANY level is 16,246 people. This is the number that Khazanah should use to benchmark MAS against SIA, although it still not like for like because of the presence of Engineering an Airport Ops Staff in the MAS number. 

Using the MAS Company level workforce to benchmark, would show that MAS staff productivity in terms of Employee per aircraft is worse off by 8% rather than 25% as stated in the Khazanah report. If there are staff to be retrenched, it would involve around 2,000 people not 6000 as claimed by Khazanah.

Dearest Khazanah

Dear Khazanah,
Please consider our appeal below, we cannot stay silent any longer.

"The Khazanah Document on Saving The National Icon has a flaw which will have serious consequences to 6000 MAS staff. The authors of the document carried out a benchmark exercise to compare, among other things, the productivity of MAS staff compared with the industry average and selected airlines namely SIA and Cathay, The benchmark indices are Revenue per Staff (Exhibit 7) and Employee per Aircraft (Exhibit 8). For the purpose of this discussion we will examine the prodctivity of MAS staff against that of SIA simply because the SIA annual report contains a lot of useful data.

Referring to Exhibit 7 of the report the Revenue per Staff is RM850,000 compared to SIA's RM2,250,000 (after conversion).

In Exhibit 8, the Employee per Aircraft for MAS is 183 compared to SIA's 138 per aircraft. The industry average is 123 staff per aircraft.

The question is how were these figures arrived at? There is a feeling that the comparisons were not apple to apple. A test was made using data from the MAS 2013 Annual Report and the SIA 2013/2014 Annual report. This is not to challenge the Khazanah's figures but determine the veracity of the computation method.

The data required for the computation are as follows:

MAS ( Annual Report 2013)

Revenue RM15,121,204,000
Staff strength 19577
Fleet Size (excluding FireFly & MASWings) 108

SIA (2013/2014 Annual Report

Revenue $12479.7 million 
Staff strength 14,240
Number of Aircraft 104

Computation

1, MAS - Revenue per Staff = RM772396
Reported in Annual Report - RM772000
Employee per Aircraft = 181 employee per aircraft

2. SIA Revenue per Staff = $876383
Reported in Annual Report - $876383
Employee per Aircraft = 137 employees per aircraft

It is to be noted that the SIA staff number of 14, 240 does not include the Engineering and Ground Handling staff which are parked under the subsidiary/sister companies thereby giving a favourable outcome to the Employee per Aircraft Index.

The MAS staff number includes personnel in Engineering and Airport Operations resulting in a poor (25% worse) Employee per Aircraft Index compared to SIA.

This confirm the suspicion that the comparisons were not apple to apple.
It is regretable that based on this flawed assumption the authors of the Khazanah report recommended tha 6000 MAS staff be axed. See Exhibit 8 of the report.

What would the MAS figures be if the staff from Engineering and Airport Operations numbering, say, 5000 is not included in the computation?

No of staff involved = 14577
Revenue per Employee = RM1,037,333
Employee per Aircraft = 135 employee per aircraft.

Based on these new figures would the recommendation to axe 6000 still hold?

It would be highly regretable if 6000 staff have to be axed because of a flawed assumption. 

I am appealing to Dr. Don to bring this to the attention of the powers that be to correct the mistake which will cost 6000 people their jobs."     

Former Head of MAS Engineering.

Former Head of MAS Engineering speaks.

RETRENCHMENT OF 6000 MAS STAFF

It is really heart-breaking that 6000 staff member will have to go under the Khazanah restructuring plan. All in all, about 20,000 or more people, including family members and dependents, will be affected by this move.

The Khazanah announcement with regard to the downsizing of the new MAS workforce to 14,000 lacks substance to enable meaningful comments to be made. In my view if the workforce is reduced to such numbers with the current company structure intact, then new MAS, scope of business will have to be shrunk to what it was in the 1980s. It appears that Khazanah is going for a quick fix. According to some analysts new MAS will save RM715 million by axing 6000 people for the work force.

However, MAS will have to cancel/defer deliveries of new aircraft thereby incurring additional cost in terms of penalty payments to the aircraft manufacturers.

The suggestion to restructure the current MAS by spinning-off Engineering, Airport Operations and MasKargo into 100% subsidiaries will achieve the objective of reducing the workforce of new MAS to 14,000 people or less, at the same time will avoid retrenching 6000 people and creating new businesses which could contribute to new MAS' income.

The transfer of the domestic operations and secondary regional points to FireFly will further reduce new MAS' cost. In addition to the reduction in technical and cabin crew which will be transferred to FireFly, substantial saving would be in the reduction of lease rental for the B737-800 and the maintenance cost of those aircraft that are transferred to Firefly.

Assume the following:

- 25 B737- 800 aircraft has to be transferred to FireFly

- Monthly utilization of 300 Flight hours.

- Lease rental of USD300, 000 per month

- Direct maintenance cost of USD700 per flight hours

Lease Rental for 25 aircraft = USD(300,000 x 12 x 25) = USD90,000,000

Maintenance cost = USD(700 x 300 x 12 x 25) = USD63,000,000

Total savings to new MAS USD153 million or about RM459 million per year.

If we add the cost of the 6000 people, the cost reduction to new MAS is more than RM1billion per year.

The money that Khazanah proposed to compensate the retrenched staff could be gainfully used to set up the new subsidiaries.

Any rebuttals are most welcome. Silence is no longer an option.

THANK YOU

MAS MESA FORMER SECRETARY SPEAKS

An Open Letter to the Public

I note with grave concern the various comments attributed to politicians from both sides of the divide as they opined that Unions of the national airline were unreasonable in their demands, imputing that the employees were asking for the “moon” in terms & conditions of service, including perks & emoluments.

I would normally allow the current Union(s) leadership themselves to respond to the adverse inferences but I know that most Union Officials love the airline and are professionals who would not jeopardize its image or status publicly unless provoked or hard-pressed by excruciating circumstances that if not mitigated would prove detrimental to the very existence of the airline.

Two nights ago, frank and candid views were aired on TV3 by Tan Sri Abdul Aziz Abdul Rahman, a respectable gentleman who had once served with colours as MD of the airline. I was most fortunate to have been acquainted with him when representing AMALAE, the airline’s engineer fraternity. Also aired were the views of Datuk Nur Jazlan, the Chairman of the Public Account Committee.

As a responsible citizen and active unionist, though retired from the airline in end-2012, my conscience compels me to reveal the following about Unions in the national airline and that would be the truth.

Contrary to general perception, a Union is just an organized group of employees that represents and collectively highlights the plights of the employees to Management and also negotiate for a Collective Agreement with fair terms & conditions of service of employment concurrent with prevalent working scenario. I do not deny that the Unions would strive to obtain the best if not fairest terms & condition of service and this, simply put, translate to Ringgit & Sen.

But what most fail to understand is that the function of a trade union goes beyond that, extending well into the purview of employees’ safety, safety of his employer (and for airlines + aircraft) and the general public. You would notice that I had used the word “public” instead of “paying passengers” who are core business partners of the airline. This is no rocket science except to emphasize in air transport industry, casualties and collaterals for lapse in safety does not confine to crew and passengers only, but extend beyond into the realm of innocent public and properties in the vicinity of a crash.

To explain the above contention, investigations and findings following 2 catastrophic international air accidents involving airlines are illustrated below, albeit the identity of the airlines involved.

a)      In May 2010, a 2 year old Boeing B737-800 Next Generation aircraft flew from a Middle East city to an airport in the Indian sub-continent with 166 passengers. The Commander of the ill-fated (non-unionised) Operator’s aircraft feeding the main airline (unionised) was compelled by his employer to fly several sectors, with insufficient rest in between.

When close to the destination airport, the aircraft flew a non-standard, unstabilised approach to the runway situated on a “table-top” hillside that is designated as a critical airfield that mandate heightened awareness and a very precise landing approach only Commanders were allowed to perform. It touchdown about 2000 feet beyond the usual touchdown zone (TDZ) and with less than half of the runway remaining available, overshot, fell over a cliff and caught fire. At the bottom of the cliff was a squatter colony. Altogether, 158 souls on board the aircraft perished and a further undisclosed number of squatters on the ground were killed or fatally injured.

The aircraft’s 2 black boxes were recovered and analysis of their recording revealed a lull of about 110 minutes with some peculiar noise heard. Further analysis shows the Commander so severely fatigued that he was captured on the Cockpit Voice Recorder as snoring substantially.

Incidentally, had that service been operated by the unionised main airline, such onset of crew fatigue would have been arrested or mitigated as the Collective Agreement with the union has specific provision for strict adherence to pre-flight rest and allowing, as added measures, a pilot to refuse flight in fatigued condition for very obvious safety reasons.

b)      In October 2000 a 4 year old Boeing B747-400 jumbo aircraft with 179 passengers inadvertently strayed onto a non-active runway in Taipei. The inactive runway was not barricaded and during its takeoff roll, the aircraft crashed into construction equipments left on the runway. The error was partly contributed by the inactive runway lights being left on as it share a common switch with the active parallel runway on which the flight was cleared to departure on. At that time, the airport was lash by heavy rain that precedes an oncoming typhoon.

Like most other foreign carrier leaving the airport, they were in haste to take off and leave prior closure. All three pilots (highly competent with abundant flight hours) due to the poor visibility, inadvertently mistook the lighted inactive runway as the one cleared for departure and during takeoff roll, impacted construction equipments, broke up and burst in flames with 83 fatalities.

Commendably, 96 passengers survived, aided by impeccable training and high preparedness of the cabin crew who reacted with professionalism in evacuating passengers from the inferno.

Interestingly, a senior official of the airline had admitted liability initially but the truth was slowly uncovered revealing lapses including; inactive runway not barricaded; its runway lights not switched off and absence of airfield ground movement monitoring radar were contributory. The airline nevertheless stood fast on their crew’s skills and integrity throughout the investigation even though their pilots were detained.

Only after the local authority insisted on blaming the crew via release of an air accident report disputed by several parties as controversial, that the airline reluctantly conceded a degree of blame on pilots’ error.

There are many more international and even local accident/incident that could be quoted arising from adverse working conditions and poor management skill and organization that could fatally endanger the crew, passengers and the general public, but the 2 cases above would suffice to show that SAFETY of ALL parties is of PRIME concern and not just a lip service by certain personalities. 

Unfortunately, in our own recent case of misfortune, I am of the opinion that the same views and spirit were NOT exhibited by our management or leadership. Moreover, it was further exacerbated by misleading and inaccurate information from the authorities and politicians who seem too eager to prematurely apportion culpability via release of ill-informed, inaccurate and misleading information.

Inevitably, they only help provided was to cast further aspersions on the crews (in turn, airline) integrity, irrespective of fact that the aircraft has yet to be located and the poor crew were in no position to put up any defence against speculative and irresponsible deductions unsupported by any cogent evidence.

Personally, I blame the management action/omission for allowing others to freely assail the integrity of their employees, unions & associations that worked very hard and diligently to ensure operation safety. Don’t they notice that these are basically the same group of employees that had won international awards and accolades for excellence in operation, aircraft maintenance, safety and professionalism?

Don’t they realize that their brash and premature jabbering, disguised as informed findings had only served to cause insurmountable amount of anguish to family members of the poor souls on board the ill-fated flight, irrespective of crew or passengers?

Don’t Management knew that their omission/commission over such speculations contributes nothing more towards resolving the mystery but only served to create animosity, unnecessary and prolonged doubt on Safety & Integrity of the national airlines to the detriment of long serving staff who worked their level best to produce the much needed recovery of the airline?

I abhor the imputation that unions were demanding too much, thus making the economics of running the airline unsustainable. Ask any mid/lower level staff how much they are paid then and now and how much pay percentage rise they had secured in the past ten years and most would be too ashamed to admit they are nowhere close in comparison to even a civil servant with similar qualifications. I can safely tell you that mine was almost zero if not just a low number in the single digit “rise” percentage.

How about bonuses? I beg your pardon; but that word to the staff is equitable to a four-letter expletive as it is almost non-existent. Moreover being non-contractual, the last I could recall that it last paid many, many moons ago!

Aha! Never fear Datuk Nur Jazlan, you are not entirely wrong about staff cost, but just check what upper management and the Board were paid! But then, maybe they come with absolute accountability, right? But I tell you what, you tell us; how many have you made to pay for their shenanigans!

As for multi-skill tasking and downsizing, I just wish to relate to you an attempt by some smart Alex who compare our baggage loading workforce and turn-around time allocation as inefficient as compared to an LCC operation, only to discover that he fail to register that legacy or full-service airline passengers only paid premium for seat but get free baggage allowance of 20-30 KG depending on class of travel, whilst for LCC, the passengers never pack a big bag as their passage is cheap but they pay premium for anything other than a tote bag!

So you see my dear Datuk, it’s not an apple to apple comparison because we carry more baggage! The same argument applies to Food & Beverages.      

How, anyone could conveniently discount the intrinsic of the airline that abide to every request of its political masters to fly the Nation’s Flag to even the most uneconomical destination, right from the early days, when everyone else would refuse to do such national service for losses?

Of course, how could you remember such sacrifices after the Jolly Reds were served our most lucrative routes on silver platters, in the guise of route rationalization by the very masters that conveniently secede our then ailing but potentially lucrative catering arm of the business, awarding a long-term, lop-sided contract to a new (politically connected?) entity to the absolute detriment and huge loss in term of long-term cost to the airline!

How, I recall the fanfare when another ex-MD contemplates making huge savings for the airline through a reduction/modification of meals/menu, but fail to realise that the catering contract for the seceded function had incorporated a fixed-cost per meal per passenger irrespective of cost! In the end, every apparent saving was simply reaped by the new catering provider as it is they who actually benefit as the unit cost of meal delivered is reduced but the charges remain the same! No prize for anyone who can guess who that ex-MD was and whether he put to any form of retribution!

Anyway, someone did finally managed to partly “exit” or partially evade the damning catering contract proviso by simply reassigning a substantial number of flights to be operated under a different Flagship of the Group, resulting in a true reduction of catering cost as meals served on board were source elsewhere. A round of applause for that ingenuity!

I certainly do not have any wish to embroil further in any form of semantics by degrading the very airline that I had proudly served for 40 years. I shall therefore rest my case.

Yes, I do concede that the union were apparently stubborn, but only for good reasons equitable to the Safety of Flight and Security of Tenure. Nothing more is taken for what provided and negotiated for in the CA but if those agreed terms were indiscriminately dishonoured, over our dead body!

My thanks and salutation to the esteemed Tan Sri Aziz, you have always listened to staff concerns and grouses without any bidding. But the same cannot be said of your successors. I had my share of advising them to listen out murmur from the grassroots, but have they?

To all politicians and the general public who were swayed into thinking that unions are just radicals and are impediments to progress, I only wish to state the wisdom enunciated by the current Vice President of Malaysia Airline Executive Staff Association (MESA), a registered and recognised trade union, i.e.:

“If the Management is sincere, resolve the employees issues and concerns amicably in a timely manner without short-changing the employees, there is no need or basis for the existence of unions”

Matdiah Bin Mohammad

Ex-Secretary of MESA

20 June 2014 

SWIMMING LESSONS

THE HISTORY OF MAS

MAS started like a small restaurant.. all DIY and the manager cum owner works like mad and the salary was small. Aziz doesn't mind.

When the restaurant gets bigger, reaching the economies of scale, the manager think tank. Grows vege himself, chicken farm, rempah ratus diy, beverages process improved, having their own busses to send their staff home.


Aziz was seen as old fashioned gentleman blind of the potentials by the $eing eye$. "Let us run the show!" They came in many, rushing for the top posts with fat salary. Then... they split amongst themselves. We sign up agreements, you take the chicken farm, you take vege farm, F&B and so on.

The restaurant became a self made franchise. Only to serve customers.
We supply vege, chicken, beef and all (we signed contract remember?)
The busses, you rent, drivers you hire, old drivers.. let them wash the dishes.

The restaurant finally could not make the ends meet due to 'profit sharing'. The uplines and downlines are smiling all the way to the bank. So when the restaurant close shop.. who would cry hardest?

THE SOLUTIONS:

In the third and final part of the interview with Tan Sri Abdul Aziz Abdul Rahman, the former Malaysia Airlines managing director says for MAS to fly high again it must be serious about plugging mismanagement, leakages and corruption.

This, Abdul Aziz says starts by appointing the right people. "If they have proper leadership then the rest will work out by itself. If they have the wrong leadership at all levels then everything will go haywire," he said, adding that it was time someone be held accountable - not the least over the disappearance of Flight MH370 two months ago, but for the current financial situation that MAS finds itself in. 

He also acknowledged that having too many CEOs in the last 10 years (five) does not augur well for an airline or any company that wants to turn around.

One must, Abdul Aziz advised, be consistent and have a long term plan. And this consistency can only be achieved if the man at  teh top is allowed a reasonable amount of time to implement his plans. In last week's segment, Abdul Aziz called for a review of lopsided and iffy deals which has continued to put the ailing national carrier in the red.

Saying he would accept if called upon to do national service once more, Abdul Aziz also posed these questions: why is MAS using the same business plan of 40 years ago? And why is it operating low fare at full service?

Read more: http://www.fz.com/video/time-mas-be-piloted-right-people#ixzz31x73FtAt

MANIFEST AND LATENT CONFLICT

Bubur sudah jadi nasi.

Our fundamental weakness is our analytical and problem solving skills which can manifest to conflicts and eventually to a serious crisis such as this. There were many tell-tale signs that we chose to ignore and now suffer the consequence due to our ‘tidak apa’ and ‘not our problem” attitude. 

Allow me to share the article below that we may take for granted.

TIGERTALK  |  MARCH 18, 2014 3:44 PM

MH370: Our lesson in crisis management

STORY BY

KHAIRIE HISYAM

khairie@kinibiz.com

In all honesty, we have not handled the disappearance of Malaysia Airlines flight MH370 perfectly. But really can anyone? Regardless, Tiger thinks the incident offers invaluable lessons that Malaysians must not miss.

The national tragedy that is MH370’s disappearance has turned into a crisis management test for Putrajaya and Malaysia Airlines (MAS). But it has not been an encouraging showing.

In the jungle the apex predator (namely Tiger, thank you very much) has certain expectations to meet when it comes to handling major issues affecting its kingdom like dried-up watering holes, filthy air choking Tiger’s food sources to death and brushfires. These expectations include giving clear directions and providing consistent, accurate information.

Most of all, there must be strong leadership that translates into swift action. That has not been evident for the past 11 days since the plane went missing.

There were contradictory statements from the start which caused confusion. Agencies which should be scrambling to share information with each other with all haste appeared to be doing so lethargically. The military’s apparent lack of alarm over unidentified aircraft passing through national airspace is alarming.

And as the pilots face trial by media in absentia this week, MAS had not leaped to their defence with vigour. At the very least MAS should have attempted to protect the pilots’ good reputation until such a time that they were found guilty of anything.

Tiger does not intend to dwell overly long on the things we did wrong — there are plenty other reports outlining those amid the endless speculation. But Tiger cannot help but be particularly disappointed with how we have managed information as far as the MH370 incident goes.

After MH370 went dark and was announced missing, there should have been an official compilation of confirmed facts that the media can work from and which the public can refer to for factual information, constantly updated as new information materialises or is verified. All speculation must be acknowledged and followed-up on as either true or false, perhaps tagged as unverified in the interim.

There should also have been a single spokesperson to provide updates and take questions. But there was no such factsheet as far as Tiger is aware and no single spokesperson emerged. The result was myriad figures commenting and providing information in different capacities, sometimes contradicting each other.

This lack of proper information management added to the apparent slowness on our part in analysing and cross-checking our own military radar data with secondary radar to affirm where MH370 headed towards after going dark in the Igari area.

End result: Speculation spread like wildfire and confusion ensued as myriad information came out via press reports much faster than from official sources.

Not to mention that we had sent several neighbours’ assets on a wild goose chase in the South China Sea when it appeared that we could have determined the plane’s last known location — either one of the two corridors west of the Peninsula —much earlier.

Little wonder then that a narrative of lethargic incompetence had emerged about Malaysia’s handling of the crisis, painted by and propagated by foreign media, especially those from China. By all accounts along this vein, Putrajaya, unused to heavy scrutiny, is wilting in the face of international criticism

“The Malaysians deserve to be criticised — their handling of this has been atrocious,” said Ernest Bower, a Southeast Asia specialist at the Centre for Strategic and International Studies in Washington to Reuters. “They have no maritime domain awareness and it doesn’t look like they have a strong command and control structure and they’re not well coordinated with friends.”

To some extent, Tiger concurs that we have not given our best showing in terms of managing this disaster.

However Tiger thinks there is a runaway train heading towards Bash-Malaysia Station and there needs to be some objectivity in assessing how we performed.

It bears repeating that MH370’s disappearance is unprecedented. There had been no directly comparable incident such as this and we are pretty much in uncharted waters.

Couple that with the fact that we have not had much experience with crisis management and there were always going to be slips, confusion and mistakes, especially in the early hours of the crisis.

“Most of the local guys are pretty darned good … The problem they have is, they don’t do it a lot. We do this a lot,” Thomas Haueter, a former chief of air safety at the National Transportation Safety Board (NTSB), told New York Times.

So to Tiger we haven’t really dropped the ball, although admittedly we are fumbling. Our slips are inexcusable but certainly understandable in the face of an exceptional crisis. The important thing to pursue now is to push our authorities to do better, not pin blames and nitpick relentlessly.

As an aside, it is also interesting to note that as a narrative took shape saying that Beijing should and need to take control of the situation — which it cannot, since the International Civil Aviation Organisation (ICAO) protocols dictate that Malaysia has jurisdiction and must lead efforts — another narrative has been noticeable: that the US is quietly in the driving seat.

The emerging taste in Tiger’s mouth is of Malaysia being caught in a subtle contest of influence at a time when all thought should go towards finding the plane.

In any case, above all, this incident should be our lesson in crisis management. Pray we never need to call upon what we learned this time around ever again.

MASTROUBLESHOOTERS SALUTE DR. PUAD ZARKASHI

AirAsia, MAS rapped for ‘monopolistic’ deal

Source: http://www.btimes.com.my/articles/20130914010427/Article/

KUALA LUMPUR: AirAsia Bhd should have been slapped with a higher fine for the “monopolistic” share swap deal with Malaysia Airlines (MAS), said Umno supreme council member Datuk Dr Mohd Puad Zarkashi.

Puad also said MAS managing director and group chief executive officer Ahmad Jauhari Yahya must accept full responsibility by resigning.

He urged Ahmad Jauhari to pay the RM10 million fine imposed on the national carrier by the Malaysia Competition Commission (MyCC) from his pocket.

Puad said AirAsia, which was fined the same amount, should be made to pay more as it was the bigger beneficiary of the deal, which was ruled as unlawful by MyCC for being monopolistic.

“AirAsia, without a doubt, stands to benefit more from the share swap deal than MAS.

Tony (AirAsia group chief executive offi cer Tan Sri Tony Fernandes) is a staunch supporter of the deal, which saw an exodus of MAS workers to AirAsia.

“I can’t ask Tony to step down but in my opinion, MyCC should impose a higher fine on AirAsia.”

Stating his case for Ahmad Jauhari’s dismissal, Puad said Ahmad Jauhari had shown that he is incapable of leading.

“He should step down immediately or the government should not renew his contract, which is expected to expire this month.

“Everybody was taken aback when MAS was fined. We understand that a consultant was hired for the swap deal and we know that consultants are there for the sole purpose of making profits.

“Ahmad Jauhari should have spotted any weaknesses in the deal and objected to the consultant on the deal’s viability,” Puad told Business Times yesterday.

Ahmad Jauhari was appointed to spearhead MAS on September 14 2011 and his contract is believed to expire this month.

Earlier this month, MyCC - a unit under the Domestic Trade, Cooperatives and Consumerism Ministry - fined MAS and AirAsia for violating the Competition Act 2010.

They were found to have breached Section 4(2)(b) of the Act by entering into a Comprehensive Collaboration Framework agreement in August 2011.

The deal saw Khazanah Nasional Bhd, which owns 69 per cent of MAS, having a 10 per cent stake in AirAsia. In turn, Tune Air Sdn Bhd, AirAsia's controlling shareholder, was given a 20 per cent stake in MAS.

The deal was called off in May 2012 following heavy political and union pressure.

More details here: http://mastroubleshooters.blogspot.com/2012/05/say-what.html

A GENTLE HINT TO G!

Malaysian Air Recovery Offers Bet on Government Exit: Real M&A

By Angus Whitley & Chong Pooi Koon - Sep 9, 2013 6:00 AM GMT+0800
http://www.bloomberg.com/news/2013-09-08/malaysian-air-recovery-offers-bet-on-government-exit-real-m-a.html

“Can MAS be revamped and made more competitive, even profitable?” said Shukor Yusof, a Singapore-based aviation analyst at Standard & Poor’s. “Absolutely, provided the right people with the right motives and mindset run the carrier and with little government interference.” 

Malaysian Airline System Bhd. (MAS) offers a bargain investment for traders willing to bet on a sale, as a turnaround stokes calls for the government to exit its stake.

Malaysian Air fell to an all-time low this year amid competition from budget airline AirAsia Bhd. (AIRA) Now the company is projected to post its first profit in four years in 2014 on record revenue, according to analysts’ estimates compiled by Bloomberg. With the carrier on the mend, the government may seek to shed its majority ownership by selling or breaking up the $1.6 billion airline, said Malayan Banking Bhd.

“Selling parts of the company is definitely viable,” said Ang Kok Heng, who helps manage $428 million of assets, including Malaysian Air shares, as chief investment officer at Phillip Capital Management Sdn. in Kuala Lumpur. “They must show some results before people are confident to buy. ”Among those calling for a sale are former Premier Mahathir Mohamad, who oversaw Malaysian Air’s initial public offering in 1985, and the executive -- now a minister -- who previously returned the carrier to profit in 2006. While the government may wait for the airline’s shares to recover before seeking buyers, RHB Research Institute Sdn. said potential acquirers include local billionaire Syed Mokhtar Al-Bukhary, who last year persuaded officials to sell him the national carmaker.

Stay Out

Former Malaysian Air Managing Director Idris Jala, who is now a minister in the office of current Premier Najib Razak, last month said the government should stay out of the airline business, sending the stock up 7.9 percent the next day. Idris returned the company to profit on a quarterly basis in 2006.

The state’s 69 percent stake in the carrier is held by investment division Khazanah Nasional Bhd.

Mahathir, Malaysia’s longest-serving leader, backed the idea of a sale, telling state news service Bernama that a private owner would work harder to avoid losses than the government. Several groups have submitted takeover offers, The Star newspaper said Aug. 14.

Malaysian Air is forecast to generate net income of 88 million ringgit ($26 million) next year fromsales of 15.6 billion ringgit, according to analysts’ forecasts compiled by Bloomberg. After an estimated loss this year, a profit in 2014 would end a three-year, cumulative loss of 3.4 billion ringgit, the data show.

“It will make more sense for Khazanah to sell at that time,” once the company, whose stock ticker is MAS, has restored profitability, said Jerry Lee, an analyst at RHB Research in Kuala Lumpur. “By that time, the share price has rallied. MAS are doing the right thing with their turnaround.”

Filling Seats

The shares fetched just 32 sen last week in Kuala Lumpur, down from 2.107 ringgit in June 2007 when Idris was in charge. Malaysian Air is trading at just 0.19 times sales, near its low of 0.15 in June, data compiled by Bloomberg show.

The plan to stem losses hinges on retiring older, less economical aircraft and leaving fewer seats empty on flights to Asia’s major tourist destinations.

Najib, the Malaysian premier, said last month the government won’t sell its stake and the airline’s turnaround “cannot happen overnight.”

The government “needs to see tangible and credible improvement and the share price to reflect that,” said Mohshin Aziz, a Kuala Lumpur-based analyst at Maybank. “Only then will they start to sell it off.”

Khazanah probably wants at least 60 sen for each Malaysian Air share, according to Mohshin, almost double last week’s price. Malaysian Air investors bought more shares for 23 sen each in May in a rights issue to raise 3.07 billion ringgit, data compiled by Bloomberg show.

Suggested Buyer

DRB-Hicom Bhd (DRB), the Malaysian conglomerate and auto dealer controlled by Syed Mokhtar, has bought at least two other stakes from Khazanah in the past two years. Based in Shah Alam, outside the capital, DRB in 2012 bought Khazanah’s 43 percent stake in carmaker Proton Holdings Bhd. for 1.29 billion ringgit. A year earlier, DRB purchased the state investment fund’s 32 percent stake in the national postal company.

A representative for Malaysian Air declined to comment on the possibility of a sale. Khazanah and DRB both said in e-mailed statements that they don’t comment on speculation.

“If there was a genuine attempt by a Syed Mokhtar Bukhary company to buy MAS, the resistance wouldn’t be as bad,” said Maybank’s Mohshin. “The notion of a national airline is an outdated one. There’s no need for it anymore.”

Spinoff Options

There aren’t any government-owned national airlines in the U.S. and such entities are becoming more rare in Europe, according to Mohshin. That trend will spread to Asia, he said. Even without an outright sale, the government could raise billions of ringgit listing some of the airline’s units that do make money, he said.

Malaysian Air’s engineering and maintenance business could fetch a valuation as high as 1.98 billion ringgit, and the airport terminal services unit could be valued at 1.07 billion ringgit, according to Mohshin’s estimates. The airline’s low-cost rural service Firefly could be worth as much as 1.78 billion ringgit on the stock market, he said.

“I would be open or even excited if they were to venture down this sort of route,” Mohshin said.

All told, those profitable units have a combined value as high as 4.8 billion ringgit, based on Maybank’s estimates, equivalent to most of the airline’s total market value now of 5.3 billion ringgit. The remaining pieces are the unprofitable main airline and the cargo unit.

Adding Value

“You can add a lot of value,” Sharifah Farah, an analyst at Affin Securities Sdn. in Kuala Lumpur, said in a phone interview. “At least the profit-making side would not be pulled down by the main operation.”

Singapore Airlines Ltd. (SIA) in 2000 sold stakes in SIA Engineering Co. (SIE) and Singapore Airport Terminal Services Ltd. (SATS), known as SATS, in initial public offerings. They now have a combined market value of $6.7 billion.

Previous efforts to scale back state control of Malaysian Air failed. The government agreed to bail out the unprofitable airline in 2000 by buying back a 29 percent stake from businessman Tajudin Ramli for more than double the airline’s stock price at the time.

In May 2012, Khazanah reversed a share swap that had handed 21 percent of Malaysian Air to the parent of AirAsia, the budget carrier run by Tony Fernandes. The about-face followed complaints by Malaysian Air’s biggest union.

Less Interference

Malaysian Air employees are less productive than their counterparts at neighboring airlines, according to data compiled by Bloomberg. They each generate an average of $222,000 in revenue, less than half the figure at Singapore Airlines, the data show. Workers at Thai Airways International Pcl and PT Garuda Indonesia Persero (GIAA) each bring in more revenue.

That may not put off buyers who see an opportunity to increase efficiencies.

“Can MAS be revamped and made more competitive, even profitable?” said Shukor Yusof, a Singapore-based aviation analyst at Standard & Poor’s. “Absolutely, provided the right people with the right motives and mindset run the carrier and with little government interference.”