THE SAD STORY OF MAS

Were these the reasons to disembowel MAS in the first place? (1) MAS suffers leadership problem.(2) it can’t handle rising fuel costs. (2) MAS is caught in the traditionally weakest business period. Are we being led to believe that these 3 what? Parameters? variables? are only uniqueto MAS?

Then perhaps MAS should look for alternative fuels since it is suggestive that ONLY MAS operates on expensive fuels, other airlines are not. Two, find ways to make the business period nontraditional. Replace leadership at all levels.

Its leadership they say. You mean, under the layer upon layer of MAS in-house talent, you can’t find people who may have been sidelined or ignored but who understand MAS cannot be elevated to fix MAS? Instead you think you can trust some people who have RM 57 billion payables to help put MAS?  This order for Air Bus by AA was perhaps the kiss of life that saved Airbus from bankruptcy.

The whole deal between MAS-AA raises uneasiness all around for it suggest that at the very base, MAS’s miserable existence gave an opportunity and excuse for some people to make money. That when the dust clears, we will become aware that all this is a corporate game by rich and powerful people for the benefit of the same rich and powerful people.

Why should the fate of MAS (we are not bothered with the future of AA since it’s in capable hands) be decided by 3-4 corporate chieftains- banker, rival airline owner and chief of our sovereign fund? Who yielded the responsibility of caring a national asset to a few chosen individuals? Why was this assignment to decide the fate of a nationally owned asset not be publicly announced in the first place?

Since everyone accepts that MAS MUST be placed on an even keel, a cabinet level working committee should have been duly formed to fix MAS? Or the cabinet decides at that time, to empower the MOT to fix MAS problem. Unless of course the MOT is full of imbeciles who never inspire our government to allow it do anything. With an unenviable record like the PKFZ deal, MOT was never in the radar when the government was looking for ways to fix MAS.

MAS is a national strategic asset that requires leadership and a workable and profitable business plan. MAS is the responsibility of the government in the first and all place. We didn’t see the MOF or Ministry of Transport people or a cabinet endorsed team assigned to fix MAS. Instead, this government has acted irresponsibly by asking or agreeing to have the problem of MAS being sorted out by special interest groups. That’s what they are really- AA, Khazanah and CIMB as the match maker, are special interest groups.

We are being indoctrinated and de-sensitize into believing that the MAS-AA deal is a purely rational business deal, handled on its pure merits. We looked around, identified MAS’s problems, we come to the conclusion that its leadership problem.

Who were that we? We are the banker, the head of sovereign fund and the interested rival.

Surely, when the deal was inked, those people in Khazanah, AA and CIMB already knew of the coming 2^nd quarter financials of MAS. For the miserable losses, cumulative at .769 billion, the outfgoing MAS CEO was given 11 million shares? Further he’s saved from ignominy and inglorious anonymity by being exiled into the inner recesses of the establishment that is now single handedly running the business of Malaysia- khazanah.

So we are treated to another round of CYA rationalization- MAS recently announced a net loss of RM527 million for the second quarter of 2011.

Due to what we may ask? Due to higher fuel costs and (be) anyway, you can almost imagine the MAS people through its corporate communications people say, this 2^nd quarter is traditionally our weakest business period.

So it seems MAS is the only airlines in this world facing increasingly expensive fuel costs and it must have switched from using some other unknown cheaper fuels before.  Other airlines ALL faced the same fuel costs and if we want to use that excuse, can we explain why Air Asia the now flavor of the month poster boy, achieved exceedingly good results while operating on the same expensive fuel costs?  Is AA using cheaper kerosene?

This would suggest AA is better as managing fuel pricing, managing routes, extracting the best. In other words, profits are operationally driven rather than being dependent on known parameters such as knowable fuel costs and fuel cost trends?

And what does, this is MAS traditionally weakest period mean? If it’s already known as traditionally weakest period, why weren’t MAS’s efforts concentrated on unbundling that tradition?

Every time, people talk about MAS- they would always refer to Tajudin’s sale of MAS shares at RM 8 and so on. You mean after successive leadership changes after Tajudin, MAS is still plagued with Tajudin’s legacy. You get the feeling that the sad Tajudin stewardship of MAS will always be used as an excuse to explain MAS’s sorry state.

Then we would be better off explaining MAS’s dismal record as being due to its existence in the first place. That in the end, the absolute remedy is to dismantle MAS completely and let a new national airline come into existence on a clean slate. Let’s start all over again by de-existing MAS.

Instead, we took the easy way out. We know, MAS is facing leadership problem. But we are no looking at the problem with long term objectives for the country as a whole. We want to reduce everything to the bottom line and therefore justify our thinking by pointing out that the whole exercise is but a business decision. We are super quick furthermore to identify that only one person can save MAS.

In an attempt to bolster the fortunes of the flag carrier, state asset manager Khazanah Nasional Berhad swapped 20.5 per cent of MAS stock for a 10 per cent stake in Asia’s biggest budget carrier AirAsia on August 9. The swap enabled AirAsia bosses Tan Sri Tony Fernandes and his partner Datuk Seri Kamaruddin Meranun to sit on the MAS board and will ostensibly help turn it around.

It’s conveniently explained isn’t it?

The airline’s aggressive and consistent cost-control measures also yielded positive results, with a two per cent reduction in non-fuel-related expenses for 2Q 2011 compared to the same quarter for 2010,” the airline said in a statement.

Sorry we are not going to be bedazzled by this CYA phrase. Have you terminated the contract of the caterer then? What proportion is this business in the non-fuel expense category? What about the gargantuan salaries of the executives? You lose money but you still pay humongous salaries?

Source : Sakmongkol