Saving MAS- Khazanah doing an Al Chainsaw Dunlap move.

We must have a clear objective in our mind. To save MAS. All other considerations are secondary.

How do we find ourselves losing RM7 million a day? Board members meet each month, why were the problems not addressed? When Tan Sri Aziz was the MD, the board meets every week and any red flags would be discovered quickly.  I assume the board currently meets as frequent as they did in the past, why was the situation allowed to deteriorate?

In my opinion, saving MAS must involve the following steps.

·        Expand MAS- not downsize to compete under open skies policy. We need to have more pilots, more crew, and more support staff.  How can a leaner company compete under the open sky regime? You don’t have enough planes, pilots and support staff to support expansion.

·        Streamline top management- eliminate those high income managers and executives who are not productive but drive around in their panameras. Renegotiate all employment contracts. Why pay executives up to RM200, 000 a month but MAS is bleeding?

·        Don’t hive off businesses- turn them into profit centres. Do you know that MAS negotiated more than 4 years to get license from US –FAA? Which means MAS engineering can service American planes. We want to hive off this business? It can be a revenue earner. MAA Cargo is also  profitable.

·        All the parts that make up MAS, are all core businesses.  These contribute to making the whole profitable. These have made loses due to lack of managerial supervision. The problem starts when these smart alecs define the essential businesses as non core businesses and hive them off to cronies. MAS IT business was hived off to Azman Symphony.

·        Strengthen Firefly- make it wholly owned by MAS and turn it into a low cost fighting machine. Compete and duplicate Air Asia’s routes. Air Asia has done it to MAS- it should not complain when others do it on them.

·        Form task force committees to look into embezzlement, leakages, false invoicing, corruption. These issues are never addressed by Khazanah.  

·        Procurement procedures must be streamlined- why buy 6 unit of A380s? When smaller planes are suitable? Somebody made money here or what?  Buy smaller planes.

·        Renegotiate one- sided contracts such as MAS catering. MAS started its own catering from scratch, bringing a chef from Switzerland. It’s ridiculous to have a 25 year contract earning billions for contractor.

·        Unless structural changes take place, then spending any amount of money will be wasteful.

·        The main hurdle is to find executives and managers with integrity. Complete knowledge of the airline industry is not absolutely necessary because the manager with integrity can seek advice. The people at Khazanah are fund managers anyway.

·        Appoint Tan Sri Abdul Aziz Rahman as advisor. Even though he’s in the 80’s he may work part time as national service. Why wasn’t he approached all these years? Because the thieves knew what he would do if he were brought in.

The title of my previous article was ‘Saving MAS’. The intent was clear. The focus is on taking measures to save MAS. The title was not as FMT puts it- Air Asia Killed MAS. Those are the words of the FMT staff- not mine. I am not responsible for this kind of not so clever re-title. This is the kind of garbage in-garbage out narration of the original article. If you don’t understand, please don’t re-tittle. Air Asia does not need defending. It’s doing well already.

The comments that came of course were tailored to meet the changed title. I did not put it that way. The lesson here is- if readers want to read what I wrote please come directly to my blog. I am not responsible for the tenor of comments generated by not so clever change of title of my article.

Be that as it may, many of the readers don’t seem to understand the purpose of a low cost airline. It wasn’t meant to fly the same routes as MAS did. It was supposed to fly to areas where MAS- the premier airlines did not fly then.

That’s why it flew regional at first where MAS did not fly. It did what Dr Mahathir wanted Air Asia do in the first place- fly passengers to routes not flown by MAS.

Expectedly, AA made losses.

When did it begin making profit? When it undercut MAS routes. Mr Tony came crying before Dr Mahathir telling all the sob sob story about having to sell off the house, others too (like the chairman) were doing the same thing. And then he asked Dr Mahathir to allow Air Asia to fly low cost on the same routes like MAS.

MAS cannot charge the same fare as Air Asia because it is premier. The air fares were determined by the government then. But when it asked to reduce price, the government did not give permission. I clearly said that was our first mistake.