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Jose Mourinho
24-02-2006, 08:21 AM
In The Star this morning, dated 24/2/2006:

MAS loses RM1bil

By B.K. SIDHU

KUALA LUMPUR: Malaysia Airlines is expected to report a net loss of more than RM1bil for the nine months ending December 2005 when it announces its financial results on Monday.

The huge loss is due to high jet fuel prices and low yields on its flights even though most of its fares are comparable with that of rivals Singapore Airlines (SIA) and Cathay Pacific.

This will be the second time in half a decade the carrier will report a net loss exceeding RM1bil. In 2000, it reported a net loss of RM1.3bil.

An analyst expects the nine-month loss to be RM1.2bil; another said it would be RM1.3bil. The nine months’ results reflect MAS’ full reporting period for 2005 as it is changing its March year-end to a calendar year-end. MAS reported a RM648mil net loss for the first half of last year.

But market analysts are unfazed with the expected losses as they expect a year or two more of losses before the airline returns to profitability.

MAS managing director Idris Jala is expected to unveil on Monday his much awaited business turnaround plan.

Sources said he has kept details of his plan close to his chest, even after he presented it to Prime Minister Datuk Seri Abdullah Ahmad Badawi last week.

It is believed to involve a profit plan, cash plan and a people plan. For the profit plan to work, some unprofitable routes will be cut and aircraft fleet rationalised.

Distribution channels have to be reviewed and Internet booking encouraged for easier tracking of unsold seats and better inventory management.

The product offering will be reviewed in all sectors so that customers are given a “truly new experience”.

“The network rationalisation plan is a highly complicated issue as it involves G-to-G (government-to-government) and bilateral arrangements with countries, so the cutting of routes would need the Government’s blessing,” said a source, adding that MAS would consolidate most of its long-haul flights at the KL International Airport.

Yield is a “big problem” at MAS. MAS passenger yields are at 19.9 sen a passenger per km, 4 sen to 5 sen lower than that at SIA or Cathay. A 5 sen rise in passenger yield can bring in RM2bil in revenue, and analysts say the best way to raise yields is to fill the front end of the cabin.

Under the cash plan, MAS needs RM3bil to take it through 2007. Jala is likely to favour a mix of external and internal funding as the airline has RM1bil in cash and needs to borrow RM2bil.

As for the people plan, retrenchment is not on the cards, sources said.

.........................

Some are luckier than others. I remember that when my company made a loss of RM15k in one month (not accumulated loss, just for one particular month only), I was hauled up by the Chairman and was read the riot act. I could not sleep for a week and was counting spiders on my ceiling every night.

orchipalar
24-02-2006, 08:59 AM
Err...suffice to say...there has NOT been any profit made by the previous n current management of the national airline under the previous n current administrations...NOT even one cent...

Ahem...anybody knows what has been the accumulated debts or losses be since the early 80s...?

Err...perhaps some of the answers lies...in HERE...? (http://www.mlj.com.my/free/articles/syed-idid2.htm)

Dr. J George
24-02-2006, 09:01 AM
Aiyah u cannot question their right to loss billions in whatever manner they seem fit! Its ok wan in Malaysia! :rolleyes:

It is all part of 'national service' :p

bugbear
24-02-2006, 09:45 AM
Tell you what. Just appoint Najem as one of the director and ask him to pump in billion of RM into MAS. :D

Seriously, I think MAS in raising fuel surcharge will cause them to lose out on customers to SIA or Thai Air. The recent 5,000,000 discounted seats up for sale are a joke IMHO. I hope Idris can stop the heamorraging of billions of RM fast or else the rakyat will have to bail them out again. :o

dragonfly
24-02-2006, 11:09 AM
Losing 1 billion is 'sap sap sui' as long as Malay agenda and national pride is alive and well!! :D :o

penangkia
24-02-2006, 11:40 AM
Relax lahhhh. Petronas had bumper harvest and EPF is flooded with cash. What is there to worry man ?? National flag carrier must be saved at all costs with national public wealth mah.
Actually, anyone can be the CEO/BOD of MAS...who can do worse? and no one need to publicly acount for the huge losses..just blame it on the fuel increases..just retire and live happily ever after. 2nd loss over a billion in 5 years Wow ...Bolehland book of Records ?? :rolleyes:

SIA and Cathay must be secretly pumping low cost oil somewhere in Siberia...shiit they are not affected by the fuel increases...unfair competition tsk tsk. :D

bugbear
24-02-2006, 11:42 AM
Losing 1 billion is 'sap sap sui' as long as Malay agenda and national pride is alive and well!! :D :o

Better still if the 1 billion happen to fall into the right pocket too. :D That make the whole Malay agenda worthwhile no? ;)

orchipalar
24-02-2006, 11:45 AM
Actually, anyone can be the CEO/BOD of MAS...who can do worse?

SIA must be secretly pumping low cost oil somewhere in Siberia...shiit they are not affected by the fuel increases...unfair competition tsk tsk. :DErr...Orchi offered to work in MAS for 3 years without salary...FREE...no news so far...

perhaps they got their cheap fuel...thru underground pipes from malaysian waters...?...preposterous!

JoeJaffar
24-02-2006, 12:13 PM
correction: UMNO agenda

cskok8
24-02-2006, 04:12 PM
Now nothing left to sell, so cannot hide the losses anymore. I hope this Idris fellow has some good cards up his sleeve.

jasonbhlee
24-02-2006, 04:22 PM
Of coz he (Idris jala) can work wonders. He already started his move by declaring a huge loss. Cannot be worse. Whatever turnaround plan he has next week, will surely improve the situation. When you have hit rock bottom, there is no way but up!!

orchipalar
24-02-2006, 04:30 PM
Of coz he (Idris jala) can work wonders. He already started his move by declaring a huge loss. Cannot be worse. Whatever turnaround plan he has next week, will surely improve the situation. When you have hit rock bottom, there is no way but up!!Err...Idris Jala was riding high n comfortably in the corporate ladder...Orchi says...joining MAS would be a bad idea for him personally...

Ahem...correct to say...he has no other way but to look upwards for inspirations...n pray that Munir won't have any bad ideas on him... :rolleyes:

sirgalahad2010
25-02-2006, 01:29 PM
Hmm, let's see now....

MAS could run up losses exceeding RM1 billion in 2005 (only 9 months, due to a change in its financial year from March 31 to December 31). That's 3 straight quarters of losses.

Meanwhile, AirAsia had a net profit of RM53.4 million for its 2nd quarter ended Dec 31.

So, airlines can make money, in spite of high fuel costs and cut-throat competition. AirAsia, SIA, Qantas, British Airways, Lufthansa, Cathay Pacific, Air France - all profitable.

MAS has no where to hide - period. Wonder what Dr Mahathir's take on this is. Will he blame unbridled competition for MAS's losses, a la Proton? Or will he blame mismanagement in MAS (a political no-no)?

A Spore Straits Times report said that MAS is reviewing all its international routes and will axe the unprofitable ones. Services to Rome and Adelaide are among those marked for cancellation, according to the report. MAS may even set up a low-cost carrier to compete with AirAsia on domestic and regional routes.

But Idris Jala's turnaround plan for MAS does not envisage staffing cuts at MAS, despite industry knowledge that MAS is significantly overstaffed. Is this because the govt is scared of a political upheaval if MAS cuts its staff drastically, as other commercially-managed (and profitable) airlines do regularly?

So, unless the govt lets go, MAS is not going to be profitable, no matter how many turnaround plans are implemented. Its whole operating model is fundamentally flawed, and the govt doesn't have the guts to admit it! :(

tempuadua
25-02-2006, 09:49 PM
correction: UMNO agenda
Yes, UMNO Agenda! If it is Malay Agenda, why nobody told me about it.

expat1609
25-02-2006, 11:10 PM
In The Star this morning, dated 24/2/2006:

MAS loses RM1bil

By B.K. SIDHU

......The huge loss is due to high jet fuel prices and low yields on its flights even though most of its fares are comparable with that of rivals Singapore Airlines (SIA) and Cathay Pacific.......


hmmm....the others don't fly with water, do they :confused:

comparable with the expensive ones maybe?? on my route k.l.-vienna they allways were 60% more expensive than austrian airlines (lufthansa was 20% higher than austrian) and their service was less than 50 % of austrian (btw. lufthansa service equals 0, horrible)
:rolleyes:

wira wan
25-02-2006, 11:50 PM
Like most Malaysia press headlines.......It has a great opening.......but no ending.......the Rakyat will soon forget about it. :cool:

starrnorth88
26-02-2006, 12:48 AM
as far as is known MAS is always making losses. The only years it make money was when it sold off all its aircraft (and lease it back).

Also I think all the staff should be given VSS - sorry for them but they are trained with the wrong culture.

Do you think that the performance of MAS give some kind of indication of the competitiveness of Malaysian companies ? If the company compete locally, they can make money (sometimes). But if compete internationally they lose money. Maybe the local scene is better for them because got a lot of concession, a lot of government support (or should I say protectionism). But outside internationally there is no government protectionism - so you must be good to succeed, otherwise it will be loses.

orchipalar
26-02-2006, 01:00 AM
Also I think all the staff should be given VSS - sorry for them but they are trained with the wrong culture. Err...uh! oh!...somebody ain't gonna like that... :o

TheEdge
26-02-2006, 01:36 AM
Services to Rome and Adelaide are among those marked for cancellation, according to the report.Went to Adelaide last month. Flight was full. I wonder why their cancelling it?

sirgalahad2010
26-02-2006, 04:40 PM
Of course, it can't have escaped the Transport Minister and the PM that if MAS cuts its international services, then KLIA's ambitions to become a regional hub to compete with Changi and Bangkok Airport will face a major setback.

But if MAS maintains these unprofitable routes, it will continue to lose money.

But how can SIA and Cathay make money flying to the same destinations as MAS, from Spore and HK respectively? There's some funny business going on, seeing as how MAS operates in a lower-cost environment compared to Spore and HK.

I think, imho, that both MAS and Msia Airports have royally screwed up. Which leaves Changi and Bangkok Airport laughing all the way to the bank.