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Old February 27th, 2006, 04:10 PM   #361
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RM4 Bln MAS Turnaround Plan Shoots For Profit By 2008


By M. Saraswathi And Massita Ahmad

PETALING JAYA, Feb 27 (Bernama) -- National airline Malaysia Airlines (MAS) needs RM4 billion to turnaround, and with various cost cutting and rationalisation measures, including reducing some international routes, it aims to score an all time high profit of RM500 million in 2008.

Its managing director, Idris Jala, said MAS would churn out RM1 billion internally, another RM1 billion from external funds, and RM2 billion from the government to tide the company over its current cash crisis.

"For every RM1 invested in the aviation industry, the spin-off effects on the country's economy is worth RM12," said Jala.

He said the sale of the MAS headquarters building in Kuala Lumpur was still on and the company was evaluating the process to get the best price for it.

The sales of assets would come up to RM800 and RM1 billion, said a steady Jala who was unfazed with the five intermittent power black-outs in the packed media conference room and continued to speak for two hours on how to make the national airline profitable again.

"A real business turnaround is imperative for MAS," he stressed, adding that without a strong and decisive action, losses at MAS would continue to grow and amount to RM1.7 billion by 2006 and under the current course and speed the airline would have hit a critical cash threshold of five percent revenue and run out of cash by April 2006.

However, he said steps had already been taken to avert this cash crisis.

The Business Turnaround Plan has been carefully sequenced over the next three years to deliver cash, profitability and growth-in that order of intensity and focus.

"In 2007, our plan will focus on improving efficiency and capabilities. In 2008, we will focus on new growth opportunities," said Jala who was recruited from Shell Malaysia in December 2005 following his remarkable turnaround record involving the Sri Lankan petroleum industry a few years ago.

For the financial year ending Dec 31, 2006, MAS is expected to post a loss of RM1.7 billion, he said. For 2007, the plan forecasts a further improvement of about RM670 million, resulting in a RM50 million profit.

The company's financial year-end has also been changed to Dec 31, 2005 from March 31, 2006.

Among others, he said the MAS turnaround plan included a change from its present "over-staffed and low productivity" situation to a company with "leaner workforce and high productivity."

"In the future, MAS will definitely be running with fewer employees per unit of capacity," he stressed.

The right-sizing, he said, would only be viewed after the government had completed its review of the domestic aviation policy and for MAS to have completed its route profitability initiatives and exhausted all avenues to turnaround its unprofitable routes.

"We will be in a position to make a firm decision about this (the right-sizing of staff) matter from 2007 onwards," he said.

Jala said MAS would also cut some international routes.

Currently only 48 international routes are profitable while 66 are not.

As for domestic routes, Jala said there were only four profitable domestic routes while 144 were not.

"Our poor pricing, rising cost structure, mismatched fleet, weak operational performance, low-intensity performance culture, and social obligations all contributed to our dismal financial performance across most routes we fly," said Jala.

Some of the routes that MAS was planning to cut would be involving some in India and China.

MAS would also launch a whistle-blower policy among its employees to curb misconduct in the company.

Jala said the turnaround plan would not only reverse the loss and return MAS to profitability, but also transform the company into a strong and vibrant institution capable of withstanding external shocks and aggressively tackling new opportunities.

The plan has five central thrusts:

* Flying to win customers-MAS will reconfigure its network and product portfolio to ensure that it has the tools and capabilities to be a top-tier player.

* Mastering operational excellence-MAS will build a unique operating capability. This capability will be reflected not only improved operational reliability, but also in higher productivity.

* Financing and aligning the business on profit and loss-MAS will relentlessly increase profits with the support of a world-class finance function that ensures true financial accountability, transparency and performance orientation.

* Unleashing talents and capabilities-MAS is committed to its people it has the passion and talent to achieve the goals.

* Winning coalitions- MAS needs the resolute support of the government, its employees, managers, customers, suppliers, agents and investors. It is only with the support of these stakeholders that MAS can have the mandate it needs to make the changes that will ensure long-term success.

"We will cooperate much more closely with AirAsia domestically (for example, by sharing maintenance facilities); with international airlines (for example through alliances) and with Malaysian business partners (through joint loyalty programmes with other government-linked companies)," said Jala.

-- BERNAMA
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Old February 28th, 2006, 02:54 AM   #362
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LON-LGK-KUL, LON-PEN-KUL, SYD-KCH-KUL, KUL-KCH-PER and FRA-KUL-KCH will be cut immediately ..
no more MH 007 and no more B777 for Kuching...
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Old February 28th, 2006, 04:48 AM   #363
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Originally Posted by aen
all boils down to business models and business practices in both countries. it is obvious that the merit society thrives while those playing favouritism, corruption, ....etc are shooting themselves on the foot. mas will never see light at the end of the tunnel if they can't get the right person for the job...and why the heck they're still keeping so many staff when it's obvious that they are a burden to the company ?
You are right. It all comes down to curroption and favourtism. Many chinese pilots , flight crews and other aviation personnel are reluctant to join MAS because of favouritsm. You'll be surprised at the number of number of Malaysian chinese working for SIA and cathay. With their current business model and corrupt mentality even the most lucrative routes will incur losses regardless of whether MAS is the sole carrier or not.
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Old February 28th, 2006, 04:55 AM   #364
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Originally Posted by fairul
LON-LGK-KUL, LON-PEN-KUL, SYD-KCH-KUL, KUL-KCH-PER and FRA-KUL-KCH will be cut immediately ..
no more MH 007 and no more B777 for Kuching...
I am a bit surprised that MH 007 is not making money. The plane was full when i boarded it and there were many passengers disemabrking in Penang. I've heard rumours that Virgin has expressed interest in flying SIN - PEN - LHR but their application was rejected.
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Old February 28th, 2006, 08:11 AM   #365
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Quote:
Originally Posted by globocentric
You are right. It all comes down to curroption and favourtism. Many chinese pilots , flight crews and other aviation personnel are reluctant to join MAS because of favouritsm.
focus people focus...

MAS Turnaround Plan: Overcoming the grim outlook
Analysis by Shukor Yusof

Feb 28
--------------------------------------------------------------------------------
MALAYSIA Airlines (MAS) continues to be in a precarious state despite having had all its debts transferred to Penerbangan Malaysia Berhad (PMB) under the Widespread Asset Unbundling (WAU) of 2002.

This grim situation is despite generally robust economic conditions in Malaysia and government support over the past years. This brief article provides some perspectives on MAS’ problems by highlighting three areas:

What are the main reasons for MAS’ problems?

The answer, in part, has to do with the nature of commercial aviation, which is a high-risk business with high fixed costs such as expensive aircraft, expensive specialised staff and expensive fuel. Compounding the situation is an industry vulnerable to big swings in demand and external shocks over which it has little or no control. In our opinion, MAS for too long employed the wrong strategy (increasing load factor but not improving yields), failed to keep abreast of fundamental changes in the industry (advent of low-cost carriers or LCCs) and was bankrupt of ideas when it came to self-renewal.

Is MAS responding adequately to the financial problems?

Losses of RM616.4 million in the third quarter of 2005 were appalling. High jet fuel prices remain the most serious concern and were a big factor (although not the only one) in the latest losses.

Many airlines do not have the necessary financial strength that would allow them to enter into hedges without putting up cash collateral. This, therefore, depletes their cash reserves. We believe high fuel prices are another key risk to MAS’ operating performance in fiscal 2006.

Much depends on how savvy MAS is at fuel-hedging, and we think it will succeed given Idris Jala’s intimate knowledge of the market. MAS needs RM2 billion from the Government to get over its cash shortfall. The presence of the Government as the controlling shareholder, and the Government’s track record of past assistance, should cushion a further deterioration in the airline’s underlying financial profile. But would MAS be financially sound if its costs were reduced to, or near parity with, those of AirAsia? Don’t bet on it.

What about MAS’ prospects?

We were somewhat disappointed with the turnaround plan as it did not fully address key issues such as over-staffing, the immediate replacement of older aircraft with newer, more fuel-efficient ones, plans to deal with the proliferation of LCCs, and how to monetise the A380 in 2007.

The writer is an aviation analyst with Standard & Poors
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Old February 28th, 2006, 02:06 PM   #366
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I has briefly read the MAS Business Turn-Around Plan. I think it is recommended to our fellow forumers who is caring about financial crisis of MAS, to read this plan. Only MAS can succeed and becomes profitable, as Malaysian, we have to give our full support to this national carrier to overcome its sufferings.

Here is the link
The MAS way - Business Turnaround Paln
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Old February 28th, 2006, 02:28 PM   #367
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Media Release

27 Feb, 2006
Malaysia Airlines reports end of year losses. Business Turnaround Plan announced

Kuala Lumpur, 27 February 2006: Malaysia Airlines today reported a final quarter loss of RM616.4 million for October 2005 - December 2005 and a net loss of RM 1.3 billion for the financial period April 2005 - December 2005.

Revenue for the financial period was up by 10.3% or RM826.9 million, compared to same period for 2004, driven by 10.2% growth in passenger traffic. International passenger revenue increased by RM457.6 million or 8.4% to RM5.9 billion while cargo revenue decreased by RM64.1million or 4.2% to RM1.5 billion.

Costs increased by 28.8% or RM2.3 billion, amounting to a total of RM 10.3 billion, primarily due to escalating fuel prices. Other significant cost increases included staff costs, handling & landing fees, aircraft maintenance & overhaul charges, Widespread Assets Unbundling (WAU) charges & leases.

Fuel Costs

The most substantial factor for the losses was from fuel costs. For the period, the total fuel cost was RM3.5 billion representing a 40.4% increase compared to the same period in 2004. Total fuel cost increase comprised RM977.8 million due to higher fuel price and another RM157.6 million due to additional consumption.

In the third quarter, fuel costs amounted to RM1.26 billion compared to the RM1.01 billion in the corresponding period in 2004; resulting in 24.6% increase or RM249.3 million.

Other Operating Expenses

Staff costs for the financial year was RM1.2 billion, an increase of 20.6% compared to RM1 billion in 2004. Final quarter staff costs increased by 12.3%, compared to the same period last year. The increase for the financial year under review was attributable to the implementation of upward staff salary and allowance revisions.

The third largest cost item was aircraft maintenance & overhaul amounting to RM635 million which translates to a 23.1% increase compared to the year earlier. Third quarter maintenance & overhaul totalled to RM202.9 million, up 9.2% compared to the corresponding quarter. This increase, for the year, was due to some credits received from suppliers for year 2004, which lowered 2004 costs, and required redelivery maintenance checks in 2005.

For 2005, WAU and lease charges were RM372.2 million, reflecting a 78.4% increase against similar charges in 2004. The final quarter increase for these charges was 113.7% higher than the same quarter of 2004, totaling RM154.9 million due to revised lease rental rates and higher London Inter Bank Offer Rate (LIBOR) in 2005 compared to 2004.

Handling and landing fees rose 19.9% or RM202.4 million from 2004 to RM1.2 billion. Total handling & landing fees for the final quarter amounted to RM444.9 million, an increase of 25.8% or RM91.2 million. This increase was due to increase in number of stations and flights as well as under provisions from the financial year 2004.

In announcing details of the financial results, YM Tengku Azmil Zahruddin, Executive Director/Chief Financial Officer said, “When Mr Idris Jala came on board as Managing Director in December 2005, we were already examining various issues and factors that were leading us to the current financial situation. In the past three months, we have carefully conceptualized the initiatives required to turnaround the business. We are now ready to share the details of our plans and intensify the actions necessary to move forward positively.”

The MAS Way - Business Turnaround Plan

In announcing the Business Turnaround plan, Managing Director, Idris Jala, said: We are dedicated to the creation of a company that will be a source of pride and admiration for its employees and indeed all its stakeholders. The MAS of tomorrow will maintain its five-star product, have a competitive cost structure in the region, be renowned as being one of the best places to work in Malaysia, have closed much of the revenue performance gap to our peers and will return to profitability in 2007. We can do this, and we will.”

“A real business turnaround is an imperative for MAS. The management team, and our staff believes strongly in our ability to transform the business and, indeed, to go beyond expectations. MAS has done much to improve its performance over the last 5 years, and indeed last year. We have much to be proud of, and this work will form the foundation of our success,” he added.

Since early December 2005, the management team has dedicated itself to the development of a plan that builds off the actions taken by the Board in 2005 to begin the turnaround.

This turnaround plan will not only reverse the loss and return MAS to profitability, but also transform the company into a strong and vibrant institution—one that is capable of withstanding external shocks and aggressively tackling new opportunities.

The Business Turnaround Plan has been developed using the GLC Transformation Manual as a guide. It takes into account the recommendations in the manual and adapts these for implementation in MAS in the context of the business turnaround. The plan will enable MAS to realize a net income of RM500 million in 2008 – an all-time high profit for MAS – and to be well positioned to improve its net income even further.

It should be pointed out that when MAS announces its improvement turnaround amounting to RM1.1 billion in 2006, this does not necessarily mean that MAS will make a profit in 2006.

The headline KPIs in the scorecard are targets or aspirations set by the company as a transparent performance management practice. These headline KPIs should not be construed as either forecasts, projections or estimates of the company or representations of any future performance, occurrence or matter as the headline KPIs are merely a set of targets/aspirations of future performance aligned to the company’s strategy.

Any financial figures referred to as ‘forecast’ and ‘estimates’ in the Business Turnaround Plan for all intent and purposes are KPIs (as defined in point 1 above). Therefore they should also be treated as targets or aspirations set by the company as a transparent management practice.

The plan has five central thrusts, each symbolised by a tail of the venerable MAS symbol.

The MAS Way provides the framework for our Business Turnaround Plan:

1. Flying to win customers—MAS will reconfigure its network and product portfolio to ensure that it has the tools and capabilities to be a top-tier player.

2. Mastering operational excellence—MAS will build a unique operating capability. This capability will be reflected not only improved operational reliability, but also in higher productivity.

3. Financing and aligning the business on P&L—MAS will relentlessly increase profits with the support of a world-class finance function that ensures true financial accountability, transparency and performance orientation.

4. Unleashing talents and capabilities—MAS is committed to its people it has the passion and talent to achieve the goals.

5. Winning coalitions— MAS needs the resolute support of the Government, its employees, managers, customers, suppliers, agents and investors. It is only with the support of these stakeholders that MAS can have the mandate it needs to make the changes that will ensure long-term success.

The Business Turnaround plan has been carefully sequenced over the next 3 years to deliver cash, profitability and growth—in that order of intensity and focus. At the same time, we will continue to foster an environment that allows the talents of its people to be unleashed and to flourish.

In 2006, MAS is already undertaking a series of measures to raise RM4 billion in cash through internal and external sources to tide the airline through the current cash crisis. It is also tackling the biggest immediate profitability challenge: low yield. MAS has award-winning products and services, a competitive cost base, and a load factor that is only slightly below average.

In 2007, the plan will focus on improving efficiency and capabilities. In 2008, the focus will be on new growth opportunities.

• Review of FY2005 at http://hq.malaysiaairlines.com/mys/eng/about_us/
investor_relations/financial_operational_data/
quarterly_announcements/quarterly_announcements.asp

• Full details of “The MAS Way: Business Turnaround Plan” at
http://hq.malaysiaairlines.com/mys/eng/about_us/
investor_relations/investor_relations.asp

Issued by:
Corporate Communications
Malaysia Airlines, Kuala Lumpur

For enquiries on this release:
Media Relations:
Anbarasu
Tel: (603) 2165 5034
HP: 019 222 4952

Investor Relations:
Nova Ceceliana Nelson
Tel: (603) 2165 5453
HP: 012 277 7659
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Old February 28th, 2006, 02:39 PM   #368
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Originally Posted by johnsonooi
I has briefly read the MAS Business Turn-Around Plan. I think it is recommended to our fellow forumers who is caring about financial crisis of MAS, to read this plan. Only MAS can succeed and becomes profitable, as Malaysian, we have to give our full support to this national carrier to overcome its sufferings.

Here is the link
The MAS way - Business Turnaround Paln
Full support to MAS? Since when did MAS hold itself accountable to the public when it comes to their actions. Do you give blind support to something that doesnt give a toss about what you said? Forgive me for saying this but your statement is naive. Full support is only useful when the suggestions are acted upon and the organization hold itself accountable to it's supporters. full support is pointless when it is directed to an elite group who are just indifferent to the impact of their actions and defend their right not to make even their slightest deviation from their practices. MAS has never seen itself as an organization that is answerable to the public despite the incessant usage of public funds to sustain actions that not even the dumbest public will support.
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Old February 28th, 2006, 03:09 PM   #369
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Originally Posted by globocentric
Full support to MAS? Since when did MAS hold itself accountable to the public when it comes to their actions. Do you give blind support to something that doesnt give a toss about what you said? Forgive me for saying this but your statement is naive. Full support is only useful when the suggestions are acted upon and the organization hold itself accountable to it's supporters. full support is pointless when it is directed to an elite group who are just indifferent to the impact of their actions and defend their right not to make even their slightest deviation from their practices. MAS has never seen itself as an organization that is answerable to the public despite the incessant usage of public funds to sustain actions that not even the dumbest public will support.
At least rural Malaysians (especially in Sabah and Sarawak) would appreciate MAS for giving them the chance to connect faster with the outside world...as a sabahan, without MAS we would never have air travel to the peninsular eventhough it is somewhat expensive to us but it is faster than taking dangerous cruising with slow moving ships. and of course AirAsia is now penetrating into Malaysia's domestic sector with far lower prices...but some poeple still prefer MAS because there is almost no flight schedule delays..
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Old February 28th, 2006, 03:14 PM   #370
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all the best to MAS!!!
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Old February 28th, 2006, 03:14 PM   #371
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All right. I know some of the forumers are not standing on my side. I do apologize it. I know that some might think that 'full support' is in vain to support such a lossing, useless airline. However, I personally think that we have to read the Business Turnaround Plan first. We cannot make a judgement that beyond our knowledge and understandings. Since that it is the national carrier and being controlled by government, we do not know the inside of the operation and decision makings due to the government intervention. In this regional market, population of ASEAN is sensitive to the price change. For example, an substantial increase of additional charge will make the customers reconsider whether they are going to purchase or not. The increasing of oil-price and intense of competition among asian airlines hardly make an airlines survives. Everybody knows that aviation industry is not like other services industries which is full of challanges and unforseen circumstance. Somebody might ask that why Air Asia can survive in this environment but not MAS. I would answer that Air Asia is targeting the right market, which is price-sensitive Asean population. In this regional, Air Asia can survive, but look at MAS. Due to the intervention and requirement of government, MAS has to fly to routes which are unprofitable, such as bueno aires and karachi. Destination likes karachi is just another example of Asean market and bueno aires is low market demand compare to PEN-SIN. At this stage, MAS is seriously need the supports from all stakeholders, especially the customers. I would like to say that give an opportunity to let MAS be profitable again, if not, just ignore this statement. Since that MAS has awarded a 5 stars airlines, it means that it has the wills and determination to be the best airline in this region. Besides just complaining the bad things of MAS, why dont we just give some times to our national carrier to prove itself it can be better than SIA, CX or Qantas?

These are just my opinions based on my understandings. Comments and critics are welcomed to correct me.

Quote:
Originally Posted by globocentric
Full support to MAS? Since when did MAS hold itself accountable to the public when it comes to their actions. Do you give blind support to something that doesnt give a toss about what you said? Forgive me for saying this but your statement is naive. Full support is only useful when the suggestions are acted upon and the organization hold itself accountable to it's supporters. full support is pointless when it is directed to an elite group who are just indifferent to the impact of their actions and defend their right not to make even their slightest deviation from their practices. MAS has never seen itself as an organization that is answerable to the public despite the incessant usage of public funds to sustain actions that not even the dumbest public will support.

Last edited by johnsonooi; February 28th, 2006 at 03:26 PM.
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Old February 28th, 2006, 03:14 PM   #372
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I heard AirAsia offered higher salary for pilots than MH...
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Old March 1st, 2006, 01:55 AM   #373
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Originally Posted by johnsonooi
All right. I know some of the forumers are not standing on my side. I do apologize it. I know that some might think that 'full support' is in vain to support such a lossing, useless airline. However, I personally think that we have to read the Business Turnaround Plan first. We cannot make a judgement that beyond our knowledge and understandings. Since that it is the national carrier and being controlled by government, we do not know the inside of the operation and decision makings due to the government intervention. In this regional market, population of ASEAN is sensitive to the price change. For example, an substantial increase of additional charge will make the customers reconsider whether they are going to purchase or not. The increasing of oil-price and intense of competition among asian airlines hardly make an airlines survives. Everybody knows that aviation industry is not like other services industries which is full of challanges and unforseen circumstance. Somebody might ask that why Air Asia can survive in this environment but not MAS. I would answer that Air Asia is targeting the right market, which is price-sensitive Asean population. In this regional, Air Asia can survive, but look at MAS. Due to the intervention and requirement of government, MAS has to fly to routes which are unprofitable, such as bueno aires and karachi. Destination likes karachi is just another example of Asean market and bueno aires is low market demand compare to PEN-SIN. At this stage, MAS is seriously need the supports from all stakeholders, especially the customers. I would like to say that give an opportunity to let MAS be profitable again, if not, just ignore this statement. Since that MAS has awarded a 5 stars airlines, it means that it has the wills and determination to be the best airline in this region. Besides just complaining the bad things of MAS, why dont we just give some times to our national carrier to prove itself it can be better than SIA, CX or Qantas?

These are just my opinions based on my understandings. Comments and critics are welcomed to correct me.
The can use every excuse that they can get from famous PR consultants but it doesnt change the fact that they have a very poor work ethic. High fuel prices and unprofitable routes are just the tip of the iceberg. The more fundamental problem lies in their apathetic attitude and staff who couldnt care less. Some routes which have very high load factors were even claimed to be unprofitable. For example, London and Amsterdam are famous for enjoying very high load factors but according to their plan none of the routes to Europe is profitable. When something of this nature happens, you have to look beyond the votalie nature of the airline industry. I do acknowledge that MAS offeres good inflight service but at the end of the day, they are running a business not a charity that is established to pamper travellers. Their inability to make their services economically viable will always the most important focus point. The M'sian is not as rich as the UAE or the Brunei gov , which can afford to run a luxury airline with total disregard to economic viablity. Royal Brunei is only established for national pride. I think it has never been profitable but it is something that Malaysia cannot afford
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Old March 1st, 2006, 01:56 AM   #374
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Originally Posted by johnsonooi
All right. I know some of the forumers are not standing on my side. I do apologize it. I know that some might think that 'full support' is in vain to support such a lossing, useless airline. However, I personally think that we have to read the Business Turnaround Plan first. We cannot make a judgement that beyond our knowledge and understandings. Since that it is the national carrier and being controlled by government, we do not know the inside of the operation and decision makings due to the government intervention. In this regional market, population of ASEAN is sensitive to the price change. For example, an substantial increase of additional charge will make the customers reconsider whether they are going to purchase or not. The increasing of oil-price and intense of competition among asian airlines hardly make an airlines survives. Everybody knows that aviation industry is not like other services industries which is full of challanges and unforseen circumstance. Somebody might ask that why Air Asia can survive in this environment but not MAS. I would answer that Air Asia is targeting the right market, which is price-sensitive Asean population. In this regional, Air Asia can survive, but look at MAS. Due to the intervention and requirement of government, MAS has to fly to routes which are unprofitable, such as bueno aires and karachi. Destination likes karachi is just another example of Asean market and bueno aires is low market demand compare to PEN-SIN. At this stage, MAS is seriously need the supports from all stakeholders, especially the customers. I would like to say that give an opportunity to let MAS be profitable again, if not, just ignore this statement. Since that MAS has awarded a 5 stars airlines, it means that it has the wills and determination to be the best airline in this region. Besides just complaining the bad things of MAS, why dont we just give some times to our national carrier to prove itself it can be better than SIA, CX or Qantas?

These are just my opinions based on my understandings. Comments and critics are welcomed to correct me.
The can use every excuse that they can get from famous PR consultants but it doesnt change the fact that they have a very poor work ethic. High fuel prices and unprofitable routes are just the tip of the iceberg. The more fundamental problem lies in their apathetic attitude and staff who couldnt care less. Some routes which have very high load factors were even claimed to be unprofitable. For example, London and Amsterdam are famous for enjoying very high load factors but according to their plan none of the routes to Europe is profitable. When something of this nature happens, you have to look beyond the votalie nature of the airline industry. I do acknowledge that MAS offeres good inflight service but at the end of the day, they are running a business not a charity that is established to pamper travellers or government servants. Their inability to make their services economically viable will always the most important focus point. The M'sian is not as rich as the UAE or the Brunei gov , which can afford to run a luxury airline with total disregard to economic viablity. Royal Brunei is only established for national pride. I think it has never been profitable but it is something that Malaysia cannot afford
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Old March 1st, 2006, 05:47 AM   #375
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Originally Posted by globocentric
The can use every excuse that they can get from famous PR consultants but it doesnt change the fact that they have a very poor work ethic. High fuel prices and unprofitable routes are just the tip of the iceberg. The more fundamental problem lies in their apathetic attitude and staff who couldnt care less. Some routes which have very high load factors were even claimed to be unprofitable. For example, London and Amsterdam are famous for enjoying very high load factors but according to their plan none of the routes to Europe is profitable. When something of this nature happens, you have to look beyond the votalie nature of the airline industry. I do acknowledge that MAS offeres good inflight service but at the end of the day, they are running a business not a charity that is established to pamper travellers or government servants. Their inability to make their services economically viable will always the most important focus point. The M'sian is not as rich as the UAE or the Brunei gov , which can afford to run a luxury airline with total disregard to economic viablity. Royal Brunei is only established for national pride. I think it has never been profitable but it is something that Malaysia cannot afford
I agree with you that the fact that the working attitude and behaviour of employees of MAS contributes to the financial lossing. Another factors are internal missuse of power and corruption. However, we do see that MAS had turn from its financial crisis to profitable under WAU Program previously. It is to say that if they have the ability to turnaround, why not this time. I seriously unagree that Malaysia Government cannot afford such an airline company, but we till able to build the tallest twin towers, built the well-planed intelligent Putrajaya. It might be a joke that Malaysia can afford to build such gigantic structures but cannot afford an airline. MAS has the good reputation. For services industry, it is not a charity work to please the government. It is an important factor to lure more customers to choose MAS. For example, do you prefer to go a friendly or unfriendly McDonald's? You might say that some of the employees of MAS do not show the right attitude to customer, but I think it is just a tip of an iceberg. We cant denied that there are some bastards in serving the customer, but it doesnt mean that all of the employees show the same result. Most of the employees are well trained and we havent heard some major accidents from MAS, for example.

I appreciate your comments. I like to hear the voice from other forumers too. Critics and suggestions are welcomed.
Cheers
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Old March 1st, 2006, 08:49 AM   #376
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Quote:
Originally Posted by johnsonooi
I agree with you that the fact that the working attitude and behaviour of employees of MAS contributes to the financial lossing. Another factors are internal missuse of power and corruption. However, we do see that MAS had turn from its financial crisis to profitable under WAU Program previously. It is to say that if they have the ability to turnaround, why not this time. I seriously unagree that Malaysia Government cannot afford such an airline company, but we till able to build the tallest twin towers, built the well-planed intelligent Putrajaya. It might be a joke that Malaysia can afford to build such gigantic structures but cannot afford an airline. MAS has the good reputation. For services industry, it is not a charity work to please the government. It is an important factor to lure more customers to choose MAS. For example, do you prefer to go a friendly or unfriendly McDonald's? You might say that some of the employees of MAS do not show the right attitude to customer, but I think it is just a tip of an iceberg. We cant denied that there are some bastards in serving the customer, but it doesnt mean that all of the employees show the same result. Most of the employees are well trained and we havent heard some major accidents from MAS, for example.

I appreciate your comments. I like to hear the voice from other forumers too. Critics and suggestions are welcomed.
Cheers
Did you read their report carefully?What happened last time is different. There was no threat of the airline being financially crippled. This time there is a very viable threat. The report stated that MAS will get into a financial position that they cannot recover in April from if they cannot reverse this trend. A bail out from the gahmen will not help as the the suppliers have already lost faith in them. There is a real sense of urgency in this instance. Do you think this corrupt company is capable of a dramatic shift in culure in just two months. Two months?that's how long they have to wait before the clock starts ticking unless they perform something radical. Petronas twin towers are capable of generating profit after it's construction. The losses stop after the building is completed whereas the losses incurred by MAS will occur year after year with no ending in sight. The construction cost of the towers i assume will be almost equivilent to the losses that MAS made in two years. Do you think the malaysian government can continue subsidizing an airline that is losing 1 billion a year. That's more than 12 or 13 billion in three years.
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Old March 1st, 2006, 12:24 PM   #377
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Be patient people...just wait and see...
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Old March 1st, 2006, 04:44 PM   #378
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Quote:
Jala said MAS would also cut some international routes.
to which i really hope more foreign players will be flying into KLIA then...
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Old March 2nd, 2006, 02:49 AM   #379
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Quote:
Originally Posted by fairul
LON-LGK-KUL, LON-PEN-KUL, SYD-KCH-KUL, KUL-KCH-PER and FRA-KUL-KCH will be cut immediately .. no more MH 007 and no more B777 for Kuching...
So no more direct flights from London to Langkawi and Penang? It's a shame but I'm not surprised. I always suspected they were money losers.
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Old March 2nd, 2006, 06:17 AM   #380
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Quote:
Originally Posted by musang
to which i really hope more foreign players will be flying into KLIA then...
I think many foreign carriers are reluctant to fly into KLIA. If MAS suffered low load factors on those routes, they will be even disinclined to fly into KLIA. I will be very surprised if carriers like SAS or Aitalia start new services to KLIA after MAS cease operationg flights to Stockholm and Rome. Stockholm and Buenos Aires are a complete joke anyway. No other airlines in Asia have flights to these cities.
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