New MAS structure ?
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BTW FYI OldAce when I was on TN 727s back in Oz we carried as much as we could into Perth ex-Eastern states especialy in case of early morning advection fog (forecast or unforecast). But a few times we did end up in Meekatharra (twice) and Learmonth (once). Perths fog was a real bloodey pain.
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BorneoPilot says: Is this kinda attitude a sign of a professional Pilot? I am very afraid to head back to Malaysia then! I find this kind of petty bickering very troubling. Hope it is not that way in the cockpit.
At last you are on the same frequency. Yes what Slasher said is right. With your adopted western ideas and attitude you are going to get f#cked in Malaysia. We are still having Lords and OverLord Feudal system under the guise of democracy. That is why MAS is now such a scr#wed-up place, under emergency life support.
During the Taliban rule and I think to a certain extend until today, when 2 set of cockpit crew operates for long haul, sometimes the 2 Captain not only do not want to communicate with each other they don’t even cross each other path in the aircraft. The B-Team co-pilot will take over the cockpit first while the A-Team Captain vacate his seat. The B-Team Captain will only take over when the A-Captain was out of sight.
I always try not to mix up responsibilities and personal affairs in the cockpit. But it is difficult. The B-Team Captain is supposed to brief the A-Team Captain before he takes over on the last one hour of the flight before landing even thought there was no written rule on it then. Unfortunately it does not always happen so. I had always made the briefing even though the other Captain is my worst enemy.
I remember a few years back on a KUL-LHR flight of 14.5 hours in winter the other Captain and co-pilot completely disappeared after we took over without briefing us. We found out we’re going to have only 4 ton of fuel on arrival in LHR. When we handed over the aircraft to them earlier we noted we’re going to have 9 ton arrival fuel. (What happened was this Captain had climbed to a higher altitude much earlier than scheduled and had incurred a fuel penalty). As the weather in LHR and Gatwick was marginal we make an unscheduled stop over Frankfurt.
When we got back to KUL later I was hauled up on the red carpet to explain things. I heard the B-Team Captain was never called up as he was a close associate of the Taliban management.
And the tit for tat goes on.
At last you are on the same frequency. Yes what Slasher said is right. With your adopted western ideas and attitude you are going to get f#cked in Malaysia. We are still having Lords and OverLord Feudal system under the guise of democracy. That is why MAS is now such a scr#wed-up place, under emergency life support.
During the Taliban rule and I think to a certain extend until today, when 2 set of cockpit crew operates for long haul, sometimes the 2 Captain not only do not want to communicate with each other they don’t even cross each other path in the aircraft. The B-Team co-pilot will take over the cockpit first while the A-Team Captain vacate his seat. The B-Team Captain will only take over when the A-Captain was out of sight.
I always try not to mix up responsibilities and personal affairs in the cockpit. But it is difficult. The B-Team Captain is supposed to brief the A-Team Captain before he takes over on the last one hour of the flight before landing even thought there was no written rule on it then. Unfortunately it does not always happen so. I had always made the briefing even though the other Captain is my worst enemy.
I remember a few years back on a KUL-LHR flight of 14.5 hours in winter the other Captain and co-pilot completely disappeared after we took over without briefing us. We found out we’re going to have only 4 ton of fuel on arrival in LHR. When we handed over the aircraft to them earlier we noted we’re going to have 9 ton arrival fuel. (What happened was this Captain had climbed to a higher altitude much earlier than scheduled and had incurred a fuel penalty). As the weather in LHR and Gatwick was marginal we make an unscheduled stop over Frankfurt.
When we got back to KUL later I was hauled up on the red carpet to explain things. I heard the B-Team Captain was never called up as he was a close associate of the Taliban management.
And the tit for tat goes on.
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Most people from third world country....but not Malaysian my friend. Anyway, anyone espcially people like OA are free to leave if he had not done that already.Trying to do some maths here....hmmmm 14.5 hours, team B took over after 4 hours ( 9 tons on arrival ..must be working on LGW for alternate and guess what ? Team A not worried and no B#**s to take additional fuel....) team B climb early and stayed for7 hours and loss 5 tons what aircraft is that OA ? are you sure they did not descend ...sudahlah... too much MS Flight Simulator 2000 , why not try getting a PPL first that will help provided airlines take Old retired Air farce guys . Stop exposing your pea brain ( of wannabe Airline pilot ). What was that airfield Slasher went to on the 727 again ? Sorry laaaa.... we dont fly little airplanes to Oz thats why we dont know those airports.
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Yes Slasher, Learmonth was the place we used as a diversion airport going to Perth in the 80’s on the DC10. Perth can be bloody windy with strong crosswinds where someone demonstrated a 45kts xwind landing on the Jumbo.
I got my PR in Oz land and that will be where I be when I finish up the contract up north.
Malaysia is just turning to dogs….where it was once a beautiful country. As you can see from the write up here the kind of mentality the country is producing. It is a pity.
In general some of the Malays there can hold the trophy for the world top class for corruption and some Chinese for top class in cheating. All these including the Islamic Fundamentalist/Extremist is going to drag the country further down the gutter.
It is just leading its way to the like of Iran or Pakistan or worse Afganistan.
I got my PR in Oz land and that will be where I be when I finish up the contract up north.
Malaysia is just turning to dogs….where it was once a beautiful country. As you can see from the write up here the kind of mentality the country is producing. It is a pity.
In general some of the Malays there can hold the trophy for the world top class for corruption and some Chinese for top class in cheating. All these including the Islamic Fundamentalist/Extremist is going to drag the country further down the gutter.
It is just leading its way to the like of Iran or Pakistan or worse Afganistan.
Guest
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Times are bad, revenue dropped sharply,
expenditure is rising unceasingly, competition is keener, oil prices stay high, MAS is losing more money year after year, .................these are the challenges faced by Md Noor the new CEO of MAS.
He says, "MAS must raise productivity. Present business strategy unsuitable and costs are too high." Are these the symptoms or the root of MAS problems?
The basic policies in MAS are wrong.
Managers of key departments must be qualified
and capable people. Key managers are the ones
that must ensure MAS is managed like a tight ship,slim and trim, ready to meet the challenges of the market.
They must be appointed on merits and not on quota system. Poor morale and bad work culture have eaten into the whole company like cancer because of the quota system.
Productivity is a lose terms. Raise productivity is easy to say but HOW to do it. This is the 1.33 billions ringget question.
Automation! Yes, Mechanisation! Yes. Computerisation! Yes. Method study by consultants, Yes. ......... All these
measures will raise productivity in other companies,but not in MAS.
In MAS, after spending millions of ringget on automation and computerisation, more people have to be employed to do the same jobs. Result, a reduction in productivity.
What has gone wrong?
The fundamentals are all wrong ! For example. MAS have more than 10 cabin crew
to operate a domestic flight. Why ? Because of the agreement with the Crew Union.
Because MAS has been using the same number
of crew all these years. It must be right.
Because of service to Passengers.
Result: MAS has a cabin crew population of a few thousand to operate the small fleet of aircraft. Crew salary and allowance is one of the major item in the expenditure of MAS.
Let's compare MAS with a domestic US carrier which I flew quite often with. They use 3 cabin crew for a all EY flights, or 4 cabin
crew for a flight with first class. They have more or less the same fleet size with MAS but have only 1/3 the size of cabin crew.
Their level of service standards, equal or slightly better than MAS.
If you look at the MAS international flights and the cabin crew roster, the abuse is even more alarming. Because of past agreement with the Union, crew cannot work beyond a limited number of hours. Travelling time to
and from work is counted as work hours.
After a long flight, cabin crew are entitled to a few day paid holiday abroad before operating a flight home. Yes, they receive not only wages during the "rest" overseas, they are paid allowances (more than basic salary). After every trip overseas, they are entitled to paid "standby" duties, ie another paid holiday.They stay in five stars hotels and are paid generous meal allowance while abroad.
Working life to the Cabin crew actually is a long, long rest and holiday, punctuated by short period of serving the passengers. All these abuses eat into the revenue as expenditure.
To be fair, this sorry state of affairs is not happening only in Cabin crew department alone. It is happening in every department, from baggage loaders to Engineering. Instead of allowances, ground staff are paid huge amount of "overtime", even when there is
little or no work to do.
So, to improve productivity in MAS, it is not just automation. There is a need for a paradigm change in the mind set of all employees in MAS regarding his attitude, his
performance, and his skill and ability.
Attitude: MAS owe the employees a living, providing services is not their paid duties, but is a big a favour to the passengers.
Performance: Whether the performance of a worker is up to expectation, is not important. He will be paid his salary,
plus an annual increment, and other costly perks.
Skill and ability: It is not important whether an employeehas the skills and ability for promotions. Qualification for
promotions ;union stewards, race and religion. After all, three or four persons are deployed to one job, only one needs to have the necessary skill and ability.
If the basic policies of MAS remain unchanged, and the basic fundamentals are not fixed, it is pointless to talk about productivity, service improvements and
business strategy.
If he really intend to turn MAS around, CEO Md Noor must do two things, ie review the basic policies, and force the change in fundamentals.
He needs an axe to chop away all the dead wood, before fresh dead shoots can grow.
Has he the political clout, the ability or the will to do the challenging job?
From: soc.culture.malaysia
expenditure is rising unceasingly, competition is keener, oil prices stay high, MAS is losing more money year after year, .................these are the challenges faced by Md Noor the new CEO of MAS.
He says, "MAS must raise productivity. Present business strategy unsuitable and costs are too high." Are these the symptoms or the root of MAS problems?
The basic policies in MAS are wrong.
Managers of key departments must be qualified
and capable people. Key managers are the ones
that must ensure MAS is managed like a tight ship,slim and trim, ready to meet the challenges of the market.
They must be appointed on merits and not on quota system. Poor morale and bad work culture have eaten into the whole company like cancer because of the quota system.
Productivity is a lose terms. Raise productivity is easy to say but HOW to do it. This is the 1.33 billions ringget question.
Automation! Yes, Mechanisation! Yes. Computerisation! Yes. Method study by consultants, Yes. ......... All these
measures will raise productivity in other companies,but not in MAS.
In MAS, after spending millions of ringget on automation and computerisation, more people have to be employed to do the same jobs. Result, a reduction in productivity.
What has gone wrong?
The fundamentals are all wrong ! For example. MAS have more than 10 cabin crew
to operate a domestic flight. Why ? Because of the agreement with the Crew Union.
Because MAS has been using the same number
of crew all these years. It must be right.
Because of service to Passengers.
Result: MAS has a cabin crew population of a few thousand to operate the small fleet of aircraft. Crew salary and allowance is one of the major item in the expenditure of MAS.
Let's compare MAS with a domestic US carrier which I flew quite often with. They use 3 cabin crew for a all EY flights, or 4 cabin
crew for a flight with first class. They have more or less the same fleet size with MAS but have only 1/3 the size of cabin crew.
Their level of service standards, equal or slightly better than MAS.
If you look at the MAS international flights and the cabin crew roster, the abuse is even more alarming. Because of past agreement with the Union, crew cannot work beyond a limited number of hours. Travelling time to
and from work is counted as work hours.
After a long flight, cabin crew are entitled to a few day paid holiday abroad before operating a flight home. Yes, they receive not only wages during the "rest" overseas, they are paid allowances (more than basic salary). After every trip overseas, they are entitled to paid "standby" duties, ie another paid holiday.They stay in five stars hotels and are paid generous meal allowance while abroad.
Working life to the Cabin crew actually is a long, long rest and holiday, punctuated by short period of serving the passengers. All these abuses eat into the revenue as expenditure.
To be fair, this sorry state of affairs is not happening only in Cabin crew department alone. It is happening in every department, from baggage loaders to Engineering. Instead of allowances, ground staff are paid huge amount of "overtime", even when there is
little or no work to do.
So, to improve productivity in MAS, it is not just automation. There is a need for a paradigm change in the mind set of all employees in MAS regarding his attitude, his
performance, and his skill and ability.
Attitude: MAS owe the employees a living, providing services is not their paid duties, but is a big a favour to the passengers.
Performance: Whether the performance of a worker is up to expectation, is not important. He will be paid his salary,
plus an annual increment, and other costly perks.
Skill and ability: It is not important whether an employeehas the skills and ability for promotions. Qualification for
promotions ;union stewards, race and religion. After all, three or four persons are deployed to one job, only one needs to have the necessary skill and ability.
If the basic policies of MAS remain unchanged, and the basic fundamentals are not fixed, it is pointless to talk about productivity, service improvements and
business strategy.
If he really intend to turn MAS around, CEO Md Noor must do two things, ie review the basic policies, and force the change in fundamentals.
He needs an axe to chop away all the dead wood, before fresh dead shoots can grow.
Has he the political clout, the ability or the will to do the challenging job?
From: soc.culture.malaysia
Guest
Posts: n/a
Old Ace, again you've proven that you were never with MAS nor are you verifying your info on MAS, only posting slanders on this convenient forum.I now truly believe that you are just a provocateur & conducting a 'covert ops' of tarnishing the good image of loyal MAS's employees.
MAS doesn't operate with 10 cabin crew on their domestic sectors.How do you verify this?Simple, MAS's B737-400/500 only have 6 cabin crew seats.Now where are you going to put the other 4?The F50 only has 2 cabin crew seats......where's the other 8?If there is Crew union, where is it?The crew are unionised not through their own umbrella, rather they are bunched up together with the rest of the graded staff under MASEU.If indeed MAS operates with 10 cabin crew in the domestic sectors, then I guess we must have 'phantom' cabin crew.
Comparing MAS's services with a US operator makes me laugh!We've time & time again proven that Asian Airlines cabin services are beyond excellence!
Cabin crew are not robots, they are like pilots too, human.FTL scheme for the crew are a matter between the union & the employer.At the end of the day they need rest to conduct their duties in a safe & efficient manner.As it is, MAS's cabin crew pay are among the lowest in the region, not to mention the pilots too!So don't get me started on it.Pay for standby duties?I've yet to see it!That would be good!
Being paid allowance during nightstops are an industry practice, so what's the big deal?Even non aviation related companies pay their staff allowances while on business travel.
As for the overtime, again we should blame the former management on their 'penny wise pound foolish' policy.To lower staff costs, they employed staff on contract terms which are really pathetic.After a few months, rightfully these contract staff will resign in disgust.In the end, who has to carry the can?The permanent staff has to do it.As they are bogged down with their own duties & have to double up for the shortage of manpower, obviously they will be due for 'overtime' allowances.
Old Arse, it's very convenient to 'copy & paste' the said article from soc.culture.malaysia.However you have again proven that you're an outsider posing as a former worker.You have no idea how MAS operates nor of their policies.It's very sad that in your eagerness to put MAS in a bad light you've painted MAS's loyal staff as ungrateful & unproductive.The sad fact & the undeniable truth is the workers are just a pawn in a high stakes, one upmanship game conducted by our former Chairman who, assisted by his cronies & yes man, to line up his ever bulging pocket.
The loyal employees now are picking up the shattered pieces of MAS.Hopefully we'll be strong enough to bounce back with a vengeance.Not for my sake, or of my colleagues, rather for the nation itself.
To quote our former Chairman "What do you have if MAS bankrupts?I've still got my Celcom".
May he rot & go down with his ailing TRI!
Safe Flying all!
PILOST
MAS doesn't operate with 10 cabin crew on their domestic sectors.How do you verify this?Simple, MAS's B737-400/500 only have 6 cabin crew seats.Now where are you going to put the other 4?The F50 only has 2 cabin crew seats......where's the other 8?If there is Crew union, where is it?The crew are unionised not through their own umbrella, rather they are bunched up together with the rest of the graded staff under MASEU.If indeed MAS operates with 10 cabin crew in the domestic sectors, then I guess we must have 'phantom' cabin crew.
Comparing MAS's services with a US operator makes me laugh!We've time & time again proven that Asian Airlines cabin services are beyond excellence!
Cabin crew are not robots, they are like pilots too, human.FTL scheme for the crew are a matter between the union & the employer.At the end of the day they need rest to conduct their duties in a safe & efficient manner.As it is, MAS's cabin crew pay are among the lowest in the region, not to mention the pilots too!So don't get me started on it.Pay for standby duties?I've yet to see it!That would be good!
Being paid allowance during nightstops are an industry practice, so what's the big deal?Even non aviation related companies pay their staff allowances while on business travel.
As for the overtime, again we should blame the former management on their 'penny wise pound foolish' policy.To lower staff costs, they employed staff on contract terms which are really pathetic.After a few months, rightfully these contract staff will resign in disgust.In the end, who has to carry the can?The permanent staff has to do it.As they are bogged down with their own duties & have to double up for the shortage of manpower, obviously they will be due for 'overtime' allowances.
Old Arse, it's very convenient to 'copy & paste' the said article from soc.culture.malaysia.However you have again proven that you're an outsider posing as a former worker.You have no idea how MAS operates nor of their policies.It's very sad that in your eagerness to put MAS in a bad light you've painted MAS's loyal staff as ungrateful & unproductive.The sad fact & the undeniable truth is the workers are just a pawn in a high stakes, one upmanship game conducted by our former Chairman who, assisted by his cronies & yes man, to line up his ever bulging pocket.
The loyal employees now are picking up the shattered pieces of MAS.Hopefully we'll be strong enough to bounce back with a vengeance.Not for my sake, or of my colleagues, rather for the nation itself.
To quote our former Chairman "What do you have if MAS bankrupts?I've still got my Celcom".
May he rot & go down with his ailing TRI!
Safe Flying all!
PILOST
Guest
Posts: n/a
Oldace yeh I agree with what you said about Malaysia being a nice place. Its certainley light-years ahead of Indonesia. Ive only had limited exposure to the country through mainley charters and overnights to KL, Kuching and KKinabalu. Each nightstop I had quite a good time and mix with the locals who surprisingley to me are everyday normal people with a bit of education and sophistication. And sometimes I bump into MAS tech crew over this way (TPE usualy) and have a good chat (and a few dirty jokes) over a beer or 20. And yeh I love your female cabin crew like everybody else does!
But I hope for your sake Malaysia doesnt become another boring backward islamic crap-hole like Afganistan or Iran. It doesnt "suit" you. The mentality you speak of ("kurmatola" being a prime example: ilogical, lacks any effective communication skills, self-contradictory, incapable of rational debate and clear thinking, not too well educated, cant think straight and too idealistic) is perhaps presentley a minority in terms of population numbers. The real danger lies when these fruitcakes gain political power in the FEDERAL arena. If the papers are correct, the Malaysian oposition party called PAS(?) normaly recruit deadbeats like "kurmatola" to further there political and extremist idealism. Yeh and the Commies do the same here. Itll be pure hell if these lunatics ever take over you country. You may as well pack up and grow rice back in the kampong.
Apart from corruption and cronyism your other main problem seems to be that of religion. As an aitheist I dont believe nor respect any ancient superstition (islam included), but in Nam we have our fair share of christians, islamics, buddists, taoists etc). On an oficial state level the commies declare the country as an atheist state (which suits me) but in reality everyones alowed to practice whatever belief theyve been suckered into. Its all at low-level so theres no bloodey church bells to wake you at 7am on quiet Sunday mornings, and no mosque cat-screeches at 4am. There ARE mosques and churches of course but discretley disguised as shop lots or residential houses. The point being is that religion (and its asociated extremist element) is not permitted to interfere in any way with any Company, any business, and any politics. It also keeps the lid on any potential religious violence. If islam was put away from the political and social arena, Malaysians might gain considerably from it. Maybe.
PS You sure its 10 cabin crew for domestic (B737) sectors? Or 10 crew for domestic flights operated by your WBs?
But I hope for your sake Malaysia doesnt become another boring backward islamic crap-hole like Afganistan or Iran. It doesnt "suit" you. The mentality you speak of ("kurmatola" being a prime example: ilogical, lacks any effective communication skills, self-contradictory, incapable of rational debate and clear thinking, not too well educated, cant think straight and too idealistic) is perhaps presentley a minority in terms of population numbers. The real danger lies when these fruitcakes gain political power in the FEDERAL arena. If the papers are correct, the Malaysian oposition party called PAS(?) normaly recruit deadbeats like "kurmatola" to further there political and extremist idealism. Yeh and the Commies do the same here. Itll be pure hell if these lunatics ever take over you country. You may as well pack up and grow rice back in the kampong.
Apart from corruption and cronyism your other main problem seems to be that of religion. As an aitheist I dont believe nor respect any ancient superstition (islam included), but in Nam we have our fair share of christians, islamics, buddists, taoists etc). On an oficial state level the commies declare the country as an atheist state (which suits me) but in reality everyones alowed to practice whatever belief theyve been suckered into. Its all at low-level so theres no bloodey church bells to wake you at 7am on quiet Sunday mornings, and no mosque cat-screeches at 4am. There ARE mosques and churches of course but discretley disguised as shop lots or residential houses. The point being is that religion (and its asociated extremist element) is not permitted to interfere in any way with any Company, any business, and any politics. It also keeps the lid on any potential religious violence. If islam was put away from the political and social arena, Malaysians might gain considerably from it. Maybe.
PS You sure its 10 cabin crew for domestic (B737) sectors? Or 10 crew for domestic flights operated by your WBs?
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OA, cabin crew gets 72hrs as per their agreement with the Company. You working for MAS 
Anyway back to the thread..New MAS Structure...this is what I heard. The 4 EVP positions has been abolished. It'll be the MD and a few SVPs. "Bash" the airline man's name not even mentioned, looks like he's out. Finance will be runned by a CFO (an outsider). IT to be absorbed under services. "Doll MZ" is retiring, so the 4 EVP position dissappears. Dr Con moving to SVP serives I was told
Pyg moves to SVP FO...
and he'll be restructuring his flt ops (squadron)I bet. Joe, you could have been the Boss, but you blew it. Do you guys think he'll promote his sidekick Snake to a VP position (although Snake himself thinks he's inline for the SVP position)?.
Heard at senior management level about 4 outsiders'll be brought in to assist the MD. But my concern is..what's to become of flt ops. Help...
Anyway back to the thread..New MAS Structure...this is what I heard. The 4 EVP positions has been abolished. It'll be the MD and a few SVPs. "Bash" the airline man's name not even mentioned, looks like he's out. Finance will be runned by a CFO (an outsider). IT to be absorbed under services. "Doll MZ" is retiring, so the 4 EVP position dissappears. Dr Con moving to SVP serives I was told
Pyg moves to SVP FO...
and he'll be restructuring his flt ops (squadron)I bet. Joe, you could have been the Boss, but you blew it. Do you guys think he'll promote his sidekick Snake to a VP position (although Snake himself thinks he's inline for the SVP position)?. Heard at senior management level about 4 outsiders'll be brought in to assist the MD. But my concern is..what's to become of flt ops. Help...
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Shintaro9 says: Cabin Crew gets 72hrs as per their agreement with the Company.
And Pilots only get 36 hrs half of that.
It will be catastropic to aircraft operation if cabin crew gets the same rate as pilots. They might accidently spill coffee all over the passenger if they do not get enough rest time.
And Pilots only get 36 hrs half of that.
It will be catastropic to aircraft operation if cabin crew gets the same rate as pilots. They might accidently spill coffee all over the passenger if they do not get enough rest time.
Guest
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Haleluyah! The Air Force rules the airline.
High time too. You can all pack your bags.
Now to join the airline you MUST SERVE the Air Force and Country for 7 years. HaHahaHa serve you all civilian right for screwing up the airline. Move over the MILITARY is taking over.
High time too. You can all pack your bags.
Now to join the airline you MUST SERVE the Air Force and Country for 7 years. HaHahaHa serve you all civilian right for screwing up the airline. Move over the MILITARY is taking over.
Guest
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MAS, the national airline of Malaysia, is technically bankrupt. The situation is beyond repair, because the damage is too great. Even with massive injections of new capital it cannot be rescued. In spite of government assurances that new management will restore the operation to profitability, there is no possible means to achieve this. The present debt level, combined with continuing losses, are beyond any reasonable expectation of a return to a solvent condition. Even should the airline achieve a breakeven condition by an heroic cost reduction program, the massive debt, combined with the burden of new aircraft purchases, represents a burden that is tantamount to a bankruptcy.
The government, in an effort to put a pretty face on the situation, refuses to admit defeat, and thus a policy of supporting the airline with public funds has been accepted, though the full amount of this burden is still unknown. A recent attempt to invigorate the flagging economy with a RM3 billion injection, must be weighed against the annual loss of well over RM1 billion from MAS alone. Such is the cost of pride, that only total collapse of the economy will force Malaysia to allow the national airline to join Philippine Airways on the list of failed and discontinued Southeast Asian airlines. Malaysia is politically committed to the do-all-or-die position of an inveterate gambler, who having had a run of bad luck, is forced to wager his life to continue his destructive habit. This is no way to run a national economy.
The airline turned a profit in the years prior to privitasation, and had a respectable net tangible asset value. The story of how this happy enterprise fell on hard times in just five short years is an instructive one, and is matched by a number of other corporate histories in Malaysia. It is important because it reflects what is wrong with the corporate world of Malaysia today, going far toward explaining why the KLCI has nowhere to go but down and out. One may well ask, "Where did all the money go?"
Any enterprise intended to operate for profit must generate sufficient current income to meet routine expenses. For an airline, the major variable costs are the salaries of pilots and crew for each flight, along with the necessary fuel and landing fees. Enough passenger tickets must be sold to make the flight a profitable one.
For a non-scheduled airline, ticket sales are not such a problem, because the plane can be held on the ground until enough seats are sold to make a profit on each flight. If the airline has low debt and minimal ground costs, competitively low fares can be offered to attract passengers. Virgin Air is a good example of a successful airline which started in this modest but efficient manner.
Passengers prefer a scheduled airline because it eliminates the uncertainty of takeoff date and time. Airlines often give incentives to passengers who book early, because it aids effective planning. But for scheduled airlines there is the obligation of making the flight even though many seats are empty. Thus the percentage of seats filled, on average, is an important consideration in the evaluation of an airline.
Overall, the airline industry has had many failures and relatively few successes. With a few notable exceptions, such as Singapore Air, flying large airplanes has tended to be more a source of national pride than a profit center. For the smaller countries the losses are subsidised by the taxpayers with tourism and development as justification. This is the case in Malaysia.
Malaysia's airline has had an unfortunate stint as a semi-privitised entity, during which the private operator used it more as a concubine than a wife. A small company with a short experience in chartering helicopters to the national oil company was given the national airline as a toy, and told to tinker with the till at will. But a scheduled airline is not a charter helicopter outfit, and the books soon reflected the lack of executive skill.
The helicopter outfit has as its primary asset a chairman with a close connection to the finance minister. The finance minister controlled the contracts for the national oil company, and the relationship between the oil company and the helicopter outfit was a cozy one.
The finance minister also controlled the national airline, and the temptation to transfer this as a bonus to the chairman of the helicopter company proved overwhelming. Financing was fully fortuitous, as the finance minister also controls the public purse, including not only Petronas, the oil company, but other state-owned enterprises as well, and more importantly, the public pension and trust funds.
The helicopter chairman was duly installed as chairman of the national airline, and as such, promptly proceeded to enter into contracts with the helicopter outfit. In his capacity as airline chairman he negotiated and signed long term contracts for major services and projects. As chairman of the helicopter outfit he signed the other side of the contracts. It is the perfect case of a willing buyer and a willing seller. He saw no conflict of interest, nor did the well-paid and accommodating directors who sat quietly complicant as members of the boards of directors of both companies, nor did the minister of finance, charged with a primary duty to oversee public interest.
New (and expensive) cargo facilities were built in the Middle East and in Germany. The helicopter outfit owned the facilities and provided support services. The national airline was contracted to pay for them. The terms were apparently favorable to both. The finance minister is a quiet man, with a pleasant and disarming charm. It is difficult to imagine him as the primary behind-the-scenes conspirator in the Anwar Ibrahim affair. Yet the testimony in the two trials named this small man as the big malefactor, along with Aziz Shamsuddin and Rahim Thamby Chik. Many feared to identify him, fearful of his wealth and vendictiveness.
The sweetheart arrangement between the two companies, Naluri and MAS, soon turned sour for both. The helicopter outfit ran afoul of high expectations and low executive talent. The national airline met increasing fuel costs, an enormous debt burden caused by none other than the finance minister himself, who, by pegging the national currency at an unfavorable exchange rate for the outstanding capital loans of the airline, made it impossible for the loans to be repaid.
The airline suffered from the same lack of executive talent as the helicopter outfit, which is easy to understand, as they were the same. Each year the losses have mounted, with no sign when the bleeding will stop. In the meantime, the finance minister was forced to intervene in order to forestall a total collapse. He decided to recover the shares given to the helicopter company, but now another problem, caused by the pegging of the exchange rate, popped up. The foreign loans became impossible to repay, and the operating losses had lowered the market value of the shares of both the airline company and the helicopter outfit. The shares were no longer able to act as collateral for the loans against them. There was an enormous loss, and neither the finance minister nor the dual chairman were prepared to accept this loss personally.
Many late night coffee sessions were required before a solution was found. The public would suffer the loss. The shares would be bought back at the original price to avoid acceptance of the loss. So the decision was made to use public funds to transfer the airline shares back to the finance ministry, allowing the original loans to be repaid. This was to benefit of the lenders (one may well ask who they are), otherwise faced with accepting a large non-performing loan or foreclosing on both Naluri and MAS. This would inevitably put both into bankruptcy.
In order to avoid this disaster, public funds were used (without approval), and the public was told that the loss was "only on paper," and recovery was "just a matter of time". It was known the airline had enormous losses not yet reported, and this fact was concealed until after the share re-purchase was announced. The public was not told the true condition of the airline, nor that recovery of the MAS share price is totally unrealistic under present circumstances. On the contrary, the NTA value, after newly proposed re-financing, will be around RM1.50, as opposed to the re-purchase at RM8.0.
The political repercussions for the finance minister, as well as his party, have been grave. He has resigned under a cloud, and the books of the ministry are now under careful audit to determine the full story of the transactions carried out during his tenure. That he, like the helicopter company chairman, was unable to perceive a basic conflict of interests, when signing contracts as both buyer and seller, is seen as a serious shortcoming by those whose funds he has handled. That he has become personally perhaps the wealthiest man in the country during his government tenure has aggravated the resentment.
Harun Rashid
The government, in an effort to put a pretty face on the situation, refuses to admit defeat, and thus a policy of supporting the airline with public funds has been accepted, though the full amount of this burden is still unknown. A recent attempt to invigorate the flagging economy with a RM3 billion injection, must be weighed against the annual loss of well over RM1 billion from MAS alone. Such is the cost of pride, that only total collapse of the economy will force Malaysia to allow the national airline to join Philippine Airways on the list of failed and discontinued Southeast Asian airlines. Malaysia is politically committed to the do-all-or-die position of an inveterate gambler, who having had a run of bad luck, is forced to wager his life to continue his destructive habit. This is no way to run a national economy.
The airline turned a profit in the years prior to privitasation, and had a respectable net tangible asset value. The story of how this happy enterprise fell on hard times in just five short years is an instructive one, and is matched by a number of other corporate histories in Malaysia. It is important because it reflects what is wrong with the corporate world of Malaysia today, going far toward explaining why the KLCI has nowhere to go but down and out. One may well ask, "Where did all the money go?"
Any enterprise intended to operate for profit must generate sufficient current income to meet routine expenses. For an airline, the major variable costs are the salaries of pilots and crew for each flight, along with the necessary fuel and landing fees. Enough passenger tickets must be sold to make the flight a profitable one.
For a non-scheduled airline, ticket sales are not such a problem, because the plane can be held on the ground until enough seats are sold to make a profit on each flight. If the airline has low debt and minimal ground costs, competitively low fares can be offered to attract passengers. Virgin Air is a good example of a successful airline which started in this modest but efficient manner.
Passengers prefer a scheduled airline because it eliminates the uncertainty of takeoff date and time. Airlines often give incentives to passengers who book early, because it aids effective planning. But for scheduled airlines there is the obligation of making the flight even though many seats are empty. Thus the percentage of seats filled, on average, is an important consideration in the evaluation of an airline.
Overall, the airline industry has had many failures and relatively few successes. With a few notable exceptions, such as Singapore Air, flying large airplanes has tended to be more a source of national pride than a profit center. For the smaller countries the losses are subsidised by the taxpayers with tourism and development as justification. This is the case in Malaysia.
Malaysia's airline has had an unfortunate stint as a semi-privitised entity, during which the private operator used it more as a concubine than a wife. A small company with a short experience in chartering helicopters to the national oil company was given the national airline as a toy, and told to tinker with the till at will. But a scheduled airline is not a charter helicopter outfit, and the books soon reflected the lack of executive skill.
The helicopter outfit has as its primary asset a chairman with a close connection to the finance minister. The finance minister controlled the contracts for the national oil company, and the relationship between the oil company and the helicopter outfit was a cozy one.
The finance minister also controlled the national airline, and the temptation to transfer this as a bonus to the chairman of the helicopter company proved overwhelming. Financing was fully fortuitous, as the finance minister also controls the public purse, including not only Petronas, the oil company, but other state-owned enterprises as well, and more importantly, the public pension and trust funds.
The helicopter chairman was duly installed as chairman of the national airline, and as such, promptly proceeded to enter into contracts with the helicopter outfit. In his capacity as airline chairman he negotiated and signed long term contracts for major services and projects. As chairman of the helicopter outfit he signed the other side of the contracts. It is the perfect case of a willing buyer and a willing seller. He saw no conflict of interest, nor did the well-paid and accommodating directors who sat quietly complicant as members of the boards of directors of both companies, nor did the minister of finance, charged with a primary duty to oversee public interest.
New (and expensive) cargo facilities were built in the Middle East and in Germany. The helicopter outfit owned the facilities and provided support services. The national airline was contracted to pay for them. The terms were apparently favorable to both. The finance minister is a quiet man, with a pleasant and disarming charm. It is difficult to imagine him as the primary behind-the-scenes conspirator in the Anwar Ibrahim affair. Yet the testimony in the two trials named this small man as the big malefactor, along with Aziz Shamsuddin and Rahim Thamby Chik. Many feared to identify him, fearful of his wealth and vendictiveness.
The sweetheart arrangement between the two companies, Naluri and MAS, soon turned sour for both. The helicopter outfit ran afoul of high expectations and low executive talent. The national airline met increasing fuel costs, an enormous debt burden caused by none other than the finance minister himself, who, by pegging the national currency at an unfavorable exchange rate for the outstanding capital loans of the airline, made it impossible for the loans to be repaid.
The airline suffered from the same lack of executive talent as the helicopter outfit, which is easy to understand, as they were the same. Each year the losses have mounted, with no sign when the bleeding will stop. In the meantime, the finance minister was forced to intervene in order to forestall a total collapse. He decided to recover the shares given to the helicopter company, but now another problem, caused by the pegging of the exchange rate, popped up. The foreign loans became impossible to repay, and the operating losses had lowered the market value of the shares of both the airline company and the helicopter outfit. The shares were no longer able to act as collateral for the loans against them. There was an enormous loss, and neither the finance minister nor the dual chairman were prepared to accept this loss personally.
Many late night coffee sessions were required before a solution was found. The public would suffer the loss. The shares would be bought back at the original price to avoid acceptance of the loss. So the decision was made to use public funds to transfer the airline shares back to the finance ministry, allowing the original loans to be repaid. This was to benefit of the lenders (one may well ask who they are), otherwise faced with accepting a large non-performing loan or foreclosing on both Naluri and MAS. This would inevitably put both into bankruptcy.
In order to avoid this disaster, public funds were used (without approval), and the public was told that the loss was "only on paper," and recovery was "just a matter of time". It was known the airline had enormous losses not yet reported, and this fact was concealed until after the share re-purchase was announced. The public was not told the true condition of the airline, nor that recovery of the MAS share price is totally unrealistic under present circumstances. On the contrary, the NTA value, after newly proposed re-financing, will be around RM1.50, as opposed to the re-purchase at RM8.0.
The political repercussions for the finance minister, as well as his party, have been grave. He has resigned under a cloud, and the books of the ministry are now under careful audit to determine the full story of the transactions carried out during his tenure. That he, like the helicopter company chairman, was unable to perceive a basic conflict of interests, when signing contracts as both buyer and seller, is seen as a serious shortcoming by those whose funds he has handled. That he has become personally perhaps the wealthiest man in the country during his government tenure has aggravated the resentment.
Harun Rashid
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This - all of this is so VERY sad!!!
I believe all should work towards improving
our national airline and maybe complain less.....or am I just another
bright eyed, idealistic ciku that has been
away from Malaysia too long to realize MAS is beyond hope?
Enlighten me please...anyone?
I believe all should work towards improving
our national airline and maybe complain less.....or am I just another
bright eyed, idealistic ciku that has been
away from Malaysia too long to realize MAS is beyond hope?
Enlighten me please...anyone?