Saving MAS-Part 3

In answer to our dear PM- I don't want to either speak up or talk down. i want too speak at eye level. so I repeat what Joan Rivers usually does at her opening- can we talk? 
I am asking, why did the government make the stupid mistake of allowing Air Asia to duplicate the same routes as MAS back then-? And allowing it to charge low cost fare which was the same as undercutting MAS.

Wasn’t that the same as allowing the other person to knife you? I am saying it as it is- and Air Asia was responsible for it. The good Doctor allowed that to happen without arming MAS.

In view of the Open Skies policy next year, I question the wisdom of downsizing MAS. Does anyone know the ramifications of Open Skies? It means any other airlines- Thai Airways, Air Asia, SIA, or whatever can fly into KLIA or any airports in Malaysia, pick up passengers and fly them to any destination within Malaysia and outside Malaysia. These people will be swarming at KLIA and KLIA2 and other airports offering their airlines. How can a downsized MAS cope and compete?

Now, tell me- if MAS by that time has reduced staff- the pilots presently are already fatigued, the crew are working like beasts of burden- with reduced capacity can it compete with these other airlines? Where are the planes, the pilots, and the engineering staff to cope with competition? You reduce staff means you’re shooting yourself in the foot.

Of course if we were to spend large amounts of money – RM6 billion or even more without changing the structure of MAS- if we give more money but retain the hemorrhaging culture in MAS- we will go bankrupt. Spending more money on MAS must be supported with a re-structuring of the business culture in MAS. That is a precondition. You spend more money but you retain the leakages and pilferage, you cut off your own wings, we will be dead. I am saying spend money- pubic money on MAS because we want to save MAS-but make sure we change the structure. Reduce the salaries of top management first.

Create its own low cost outfit- bring back and nurture Firefly so that it can compete with Air Asia. Now, why should people be alarmed when we want to compete with Air Asia? What is so sacrosanct about having Air Asia monopolise the low cost aspect of the airline industry.  My answer is simple- because Nazir Razak, Azman Mokhtar and Tony Fernandez like each other; they support each other. Nazir Razak who supports Azman Mokhtar as chief of Khazanah once expressed his admiration of the hustle and bustle at LCCT at that time and took it as indicative that AA is the most profitable airlines. It’s a low cost airline- people are attracted to it naturally.

But has anyone scrutinised the books of Air Asia? I am not an accountant- but can advance bookings be counted as current revenue and booked in in the current year? You have not received the money but you have counted them as current year earnings. Isn’t that a ploy to prop up the share prices?

Khazanah is a shareholder of Air Asia- perhaps they should be looking at how planes are bought. Are they bought directly or bought through an intermediary. I hear people are saying that an intermediary buys the planes at discounted price and then sold to Air Asia at the full prices. Air Asia does not belong solely to Tony Fernadez- there is public money by way of Khazanah.   If it were entirely his, we don’t give a damn.

If I were the government, I will ask people to look into this matter and also find out if Khazanah knows about this. If they know, then some people are in cahoots skimming off the plane purchases.

If Air Asia is damn good as many of its supporters insist it is, then it should not worry about a revitalised Firefly. Let firefly service the same routes as does  Air Asia.

Some people were actually planning to kill off Firefly. That would give a monopoly to Air Asia to dominate the low cost sector of the business. Remember when the Comprehensive Framework or something that sounded fanciful was thought of- the first thing they did was to kill off firefly. That is MAS’s own low cost outfit which could give competition to Air Asia. Why was it snuffed out? If Air Asia was that great, why ask the government to snuff out a potential competitor?

Now that every wants to fly and Air Asia thinks it can beat everyone, why don’t the government now allow MAS to nurture back Firefly and give it the same routes as that obtained by Air Asia? Air Asia has already got a head start- so it need not worry about competition from firefly. Come next year, when the Open Skies policy is implemented- it will be free for all. MAS should now arm Firefly to the teeth so that it can compete with Air Asia.

Now to those who glorify tony Fernandez who started with only 2 planes (and made money only when Dr Mahathir allowed it to fly low cost domestically), they should not protest if MAS which wants to make money by 2017, cultivate Firefly to the fullest. Tony Fernandez has proven one thing and he is an icon for doing this- any seller of pirated CDs can be successful.  Maybe not in running an airlines.

The Khazanah Plan is structured to cut down services and retrenching staff will make MAS a smaller airline. It will be difficult for a smaller airline to compete against so many larger airlines with extensive networks.  Air Asia for example –with its Air Asia Thailand, Air Asia Indonesia, Air Asia what not- is a bigger networked airlines. It will thrive better than MAS which the brainy people at Khazanah think is better suited being downsized. Have their brains shrunk or what?

In my mind, what MAS should do, in anticipation of the open sky policy is to do the reverse- expand more. It must counter the trend to downsize. Hence more pilots, more ground staff- MAS must operate on a larger scale. This requires more funds and some manpower. Clearly, the Plan to reduce and retrench workers- is wrong.

You are going to spend another RM1.6 billion to retrench workers. These people have worked with MAS for a long time- they have families and obligations. How much do you pay them individually? Why don’t you start by retrenching the top heavy section of the MAS employment structure? SIA must be laughing at us- responding by acting on the advice of outside consultants. These people asked MAS to do a chainsaw Al Dunlap on the company- by chain sawing the employment structure and services.

Apparently the problem at MAS wasn’t fixed when Idris Jala spent time in MAS- what he did was basically asset stripping and forward buying. That made the books looked good during his tenure, but the real problems which were not tackled by him and his band of merry men, came back to haunt his successors.

Next: The MAS union.