Last night's news on TV featured PAC Chairman, Dato Nurjazlan Tan Sri Mohamed commenting that MAS will have to be de-listed should there be no new capital injection.
It is public knowledge that MAS is bleeding by few million daily with not much could be done to cut cost and boost revenue.
Subsequent to the shooting of MH17, there was news report that there was a plan hatched, which was rumoured to involve going private, will be announced immediately after Hari Raya.
Have written this before and will keep writing it again.
How could MAS undertake a successful turnaround when the same bunch of turnaround con artists and plunderers linked with Khazanah Nasional, which were responsible for the decline of MAS from a world reknown airline to its present position, be the ones putting together the plan?
It is the same bunch, who propped up Air Asia at expense of MAS and almost got away with a collaboration with Air Asia, which was to favour Air Asia again.
The first turnaround by Bina Fikir involved buying over Tan Sri Tajuddin Ramli's equity and it eventually led to the takeover by Khazanah. Bina Fikir's Managing Director, Tan Sri Azman Mokhtar was made Khazanah's Managing Director.
The hands behind was Tan Sri Nor Mohamed Yakcop. He was responsible to manouvre and unsuccessfully attempted to fix Tajuddin with criminal charges and civil lawsuits.
Till today, there are those still trying to blame Tajuddin but when he was stuck with the debt problem arising from the ringgit devaluation, MAS was operating profitably.
Thanks to Dato Seri Anwar's cahooting with Jewish financier and rouge speculators, it was only the balance sheet that became a sudden and unbearable burden.
Together collaborating in the attempt to do that number was the failed Managing Director, Dato Idris Jala, who lied and hide the true operating loss. He was personally picked by Tun Abdullah Badawi's son, Dato Kamaluddin.
Abdullah's man, Dato Anuar Zaini was the mastermind together with Dato Kalimullah and Nor Mohamed Yakcop.
Despite his repeated failure to guide and turnaround MAS, UEM and Proton, not to mention losing RM16 billion of nation's reserve in currency trading, Nor Yakcop is still kept as Deputy Chairman of Khazanah and Management Committee Chairman of Khazanah.
Abdullah's family benefited immensely by a long term catering contract. He became adviser upon resigning as Prime Minister but failed to show his face throughout the ordeals the company had to face in the disappearing MH370 incident and recent shot down of MH17.
When management send off the nervous crew to work the Hari Raya morning, he is celebrating Raya in Melbourne totally oblivious to the company he is supposed to advise but bore the cost of his multimillion ringgit office in Putrajaya and earn fat monthly salary from for doing nothing.
CIMB, which is a major financier of Air Asia, had its former CEO, Tan Sri Mohd Nor Yusof as Managing Director during the execution of the Bina Fikir financial restructuring plan. He returned back as Chairman of MAS upon the collaboration with Air Asia and still remain.
Dato Nazir Tun Abdul Razak, who is now Chairman of CIMB Group and Director of Khazanah, was much involved in the Air Asia collaboration and behind the scene was involved as Investment Banker in the Bina Fikir plan.
The original partner to Azman in Bina Fikir, Dato Rashdan "Danny" Yusof had returned briefly in the collaborated MAS as Executive Director before got nannied out of MAS.
An important person and still involved is former Danaharta Chairman Dato Azman Yahya.
He had been part of Nor Yakcop's self serving machinery in Dana Harta to force out shares and asset from entrepreneurs for cheap and was suspected to have sold it back to cronies.
For his role, he was given the IT privatisation of MAS and important component which in the information age, should strategically have remained within MAS.
Throughout the decline of MAS and the changing CEOs from Mohd Nor Yusof to Dato Fuad Dahlan, Dato Idris Jala, Tengku Dato Azmil and now Ahmad Jauhari, the same bunch of people are still the ones carving out MAS and formulating one failed financial turnaround plan after another.
It only shows they had merely theoretical textbook knowledge of airline operations and was testing out one textbook turnaround case studies after another at the expense of MAS. It could be possible they are just destroying it for Air Asia.
The problem in MAS is really moral hazard at the highest level.
Some may have issues with Tajuddin but unlike them, he had put his money where his mouth is. Analyst/fund manager Azman Mokhtar, Khazanah boys, and the bankers are all salary men, who takes risk but the cost is borne by government.
So happen there is a Free Malaysia Today article that appropriately talks about the moral hazard problem in MAS:
MAS and its perennial issue of moral hazard
August 4, 2014
To turn around MAS, we have to address the issue of moral hazard first.
COMMENT
by Chua Tong Ka
News of resuscitating Malaysia Airlines (MAS) is back in circulation especially after the second tragedy in five months.
Various proposals, from corporate restructuring (whatever it means), privatisation, rebranding, nullifying existing contracts and getting rid of MAS’ employees union are being proposed and considered by those in the know.
But MAS was already in limbo way before MH370 and MH17.
I remember massive injections of working capital were made many times earlier, way before the two tragedies occurred. Of course, now with its reputation dented, the problems have become more acute.
We must all look at the problems in MAS objectively.
To me it is more than another ‘restructuring’ exercise, since we have done so many times over with no significant effect.
It is also more than privatisation or state-ownership. We have privatised the airline before but with disastrous consequences. We have since de-privatised it but with no significant improvement either.
SIA (Singapore Airlines) has been state-owned and state-controlled from day one but the airline has remained profitable.
Disentangling MAS’ unfair and lopsided contracts is another major consideration. But a more pertinent question is why MAS entered into these contracts in the first place?
If this fundamental question is not answered, there is no assurance that contracts entered into in the future will not fall into the same trap even though we have gotten rid of present ones.
The same goes with the employee’s union. The fundamental issue is whether employees’ demands are reasonable and within the industry’s norm – fair wages in exchange of services rendered. We must bear in mind that MAS is not the only airline having to contend with employees’ unions.
I don’t claim to know the answers to the problems in MAS, far from it in fact. But I do believe the proposals being tossed around cannot really solve the problems either.
In many ways, the problems in MAS are those associated with moral hazard and incompetency.
When the airline was state-owned, those entrusted to run it were never held accountable for their performance. It was like running a business using other people’s money, the essence of moral hazard.
When the airline was privatised under the Malaysian privatisation model, the risks and the responsibilities of running the airline were never transferred to the privatised entity.
The real mockery was when the airline was making money, the profits went to the privatised owners. However when the airline was in trouble, the government bailed it out, fully and completely.
This is the essence of moral hazard again. Who in their mind would care whether MAS was run to the ground when their capital was never at risk?
AirAsia is successful because there is ‘real’ cost of capital and those entrusted to manage it are responsible for it.
If AirAsia gets into trouble, the investors must bear the consequences and those running the airline will be punished for it.
If MAS gets into trouble, no one is responsible except the taxpayers in general and the national coffers (the minority shareholders of MAS have no say at all, except to lose their money).
We must find a way to manage moral hazard first and foremost. Otherwise, the problems in MAS will remain irrespective of the business models or corporate restructuring exercises we pursue.
The problem of moral hazard is so prevailing that the existing management and staff hardly care about the company's failing condition but only themselves.
MASEU is only interested in asking for AJ's resignation. Maybe in two months time but can MASEU managed the company to profitability?
The President, Alias used to be in cohort with a member of management in securing inflight cleaning contract for himself. One MASEU officio, Jabar call for the return of Idris Jala as if no one knows that he was an Idris Jala hatchet man inside union.
NUFAM is more interesting to seditously pit the MH370 and MH17 victim family against management. Same like MASEU of having credibility issue at its leadership, NUFAM is headed by a sleazy womanising dismissed flight attendant.
In MAS, there are many characters, who are critical and vocal against the company, but it was to cover up their incompetence and disciplinary problems.
Talking of discipline, the discipline and commitment of flight attendants have been on the decline and it cost the company. MAS could operate with lesser crew per fight to reduce cost and give more rest time for others but the FAs resist.
The FAs have a problem of thinking they are the only one that matters in MAS and need to be treated like a celebrity.
Another celebrity and big ego group are the pilots.
The A380 has a special private apartment for them but they insist that the two seats allocated to them under collective agreement remain. That is something like RM20,000 value of seats that company could have sold off for London flights.
These flying express bus drivers come with such big ego as though they know all that is to know about management. Discussion with pilots are frequently not civil as they are many incidents of table banging.
But then, be it unions or FA or pilots, they must be frustrated that one management team after another and CEO after CEO, local or
orang putih, yet the company could not turn to profitability but the packed trips are losing.
Sure, selling seats is a cut throat affair and seat prices could go up or down according to demand and supply but that is part and parcel of revenue management. It is puzzling that one management after another are not aware and bother to hear ideas of revenue management.
It is indeed tiring to hear another call to support Khazanah's another turnaround plan and Director of Human Resource can only think of a chicken dance to inspire staff when she has absolutely no idea to put together a human resource strategy for the company.
The ex-Air Asia top executives inside MAS are screwing up the company and knowledge attain from experience within the company will be forever lost.
AJ and Zaharah Zaid may not know of this. The young inexperienced middle management then brought in by Idris Jala still hardly appreciate the essentials in managing airlines but are insidiously short circuited up the ladder.
And some shallow minded racist thought bringing more Chinese will make the operation more serious and focus and the airline profitable. It is supposed to retain capable people and take in potential ones irrespective of race.
Zaharah was heard to be abusing her duty travels and outsourcing training contracts to her friends
cum failed human resource consultants. Is she behaving like those commission taking buyers at the procurement department of a biscuit factory?
Operationally, communication between the various levels are almost nil. The boss are bossy, busily flexing their muscle and politicking like in a government organisation. Working staff are frustrated with their poor listening bosses and their generally self serving attitude..
Only certain top management or few middle managers are concern. The rest are just apathetic and do not seem to bother.
Our conclusion is simple. The common denominator that exist and the ones setting the policy and direction for MAS from the days of Bina Fikir till today is the real bunch that has to go.
Take MAS out of Khazanah and sack all the Directors first. Get airliners, the real pros to manage. Azman Mokhtar have been only taking in
kawan-kawan.
An immediate problem will be to address the wide spread human resource problem pervading in MAS that cannot be thought over by a manager from a biscuit factory.
Otherwise, it will fail again and cost the government more money!
Edited 9:50 AM
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