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Thursday, December 8, 2011

Did Danny Yusof nailed BN's coffin in Selangor?

MAS made a press conference yesterday to present their Business Plan. If you read the news report today, it is sounds rosy. MAS claimed it will make profit by 2013.

Who is the MAS Executive Director, Dato Rashdan “Danny” Yusof, claimed whizz kid instrumental in putting all this together trying to kid?

Danny's two different briefings to the top management and staff are filled with assumption errors, repeating past mistakes, and use of threat. He was specifically mentioned and requested by the staff in the first Town Hall style meeting to mark the return of Tan Sri Mohd Nor Yusof, not to be put as CEO.

His “revenge of the nerd” is to threat the staff with “you have no choice” financial situation but to accept what we have put together.

Murmurs amongst the staff are saying they are frustrated with the repeated situation of Government kept sending airline novices to turnaround MAS. Union sources claimed Prime Minister, Dato Seri Najib Tun Abdul Razak refused to meet them to hear their side of the story and feedback.

There is now a growing reluctance amongst MAS's management to vote Barisan Nasional (BN) in the next general election to teach the Government a lesson. It could filter down convincingly to the lower staff.

Looks like Danny had comfortably shoot BN’s feet. BN can kiss any chances of taking over Selangor goodbye.

Political Impact

MAS is one of the biggest Malaysian employer with 18,000 employees worldwide. MAS employees can be spread around the areas of Sepang, Kajang, Putrajaya, and Subang. Undoubtedly this collaboration with Air Asia will have serious political implication on BN, particularly in the Selangor area and specifically in Dato Zin Mohammad's Sepang area.

There is then the 8,000 Malaysia Airport staff and 1,000 Department of Civil Aviation staff to contend with.

Pakatan Rakyat is wisely keeping silent on the issue to let Tan Sri Mohamad Nor Yakcop’s cor-parat boys help shoot BN’s own feet. They are also comfortable with Tony F.

Mahfudz Omar was comfortably kidding of Tony F as the future KSN or Chief Secretary indicating his row with Malaysia Airport and Ministry of Transport are creating negative undercurrent amongst Government servants.

Najib refusal to meet the union heads, despite them having sent letters two months ago, will guarantee to exercebate this potentially explosive matter.

Our union source are claiming wunderboyadviser and member of Directors of Air Asia-X, Omar Ong “Rasputin”, as being labelled on the blogsphere, advised and blocked Najib from seeing them.

Some sources speculate Najib only hear brother Dato Nazir’s version, who was the big bad “IBanker” instrumental in putting the deal together and he is convinced that he should not see the union people.

If there is any truth, Najib, as the UMNO State Liaison Chief for Selangor, might as well as forget about regaining Selangor.

If there is serious widespread resentment against Government by the employees, there will be negative multiplier effect from their immediate family members, family, community and worsened further by public outcry that an individual had benefited from the corporate cannibalisation by Khazanah, a Government own entity.

It could reach beyond Selangor.

Danny's Erroneous Plan

This blog have spoken much of Danny’s briefing to top 100 management and his plan to hive off Engineering and Cargo operations yesterday here.

Danny’s briefing to the staff is reproduced below from an extract of Bigdog’s postinghere, below:

In a town hall meeting this morning Malaysia Airlines ED Danny Yusoff told the sernior managers on the part of what has been agreed on comprehensive collaboration framework (CCF), Malaysia Airlines does not fly to where AirAsia is serving and AirAsia would be a feeder to Malaysia Airlines’ selected international routes.

However, when asked Danny also told the senior managers’ town hall that they cannot stop AirAsia from going into Malaysia Airlines’ lucrative routes, such as Sydney, because it would be “Against anti trust laws”. Basically, eventually AirAsia could come and take away Malaysia Airline’s routes at their pleasure.

What made most of the senior managers leaving the town hall feeling very dissatisfied and displeased is that Danny as the ED failed to explain the rest of the details of the CCF. They are having the impression that Danny would only want to condition them for things that would eventually benefit AirAsia, at the expense of Malaysia Airlines.

This is very demoralising to a group of senior managers and professional airliners who have dedicated majority of the working life for the national carrier. It was also confirmed that what we rumored last night about where Malaysia Airlines is heading, “Working in progress towards hiving off the engineering services and cargo. We just want to keep our airline simple”.

Malaysia Airlines as the national carrier would eventually be an airline operating business, without assets and back up services. Probably the ground services would also be hived off at some point of time.

It is so baffling to the senior managers that these two very important support and complementary services are profitable and have huge potential, to propel Malaysia Airlines forward.

Malaysia Airlines would lose its competitiveness as a Tier-1 premium airline without its cargo and engineering services. More over, cargo business has been making hefty profits and it is growing steadily, which include new markets.

Danny also gave an excuse that “We have to build our service standards”. What is baffling is that Malaysia Airlines have been maintaining high and world renown service standards, so why is that they have to sacrifice a lot of what have worked for them as a tier-1 premium airline for the benefit of AirAsia?

The other “Thirteen Million Plus Ringgit” questions;
1. Who would benefit from Malaysia Airlines selling off the cargo and engineering services?
2. Is this about AirAsia’s preparation to have their own engineering services and cargo operations?
3. Is this the second phase of Danny Yusoff’s and Azman Mokhtar’s WAU?
Does Danny think he can convinced the employee when they have presumed and it turns out true that the proposed Comprehensive Collaboration Framework (CCF) and Business Plan (BP) is part of the systematic 10 year cannibalisation of MAS by Tan Sri Nor Mohamad Yakcop in favour of the bad boys of the Malaysian aviation industry, Tan Sri Tony Fernandez, Tune Air and Air Asia?

Does he think by threatening the staff with claims that MAS must hive off money making subsidiaries and operation to raise money for operation and aircraft delivery is convincing enough to the seasoned airliners?

Who is Danny trying to kid the bloggers in our meetng on a late Ramadhan nght with his Latin “pareto optimal” spirit to the Comprehensive Collaboration Framework (“CF”) which claims Tan Sri Azman Mokhtar means “no side will lose but any side can make more” but Danny acknowledged openly that the CCF no encroachment is optimally and heavily favours Air Asia?

Wonder, who suggested him that Latin term bullshit? Is it given by Omar Ong?

The Business Plan presented by CEO Dato Ahmad Jauhari have been heard many times before. [Download the Idris Jala-compatibale software presentation from MAS official website here.]

Frankly, it is the same generic shit newspaper reported when Tan Sri Mohamad Nor took over from Tan Sri Tajuddin Ramli, Dato Fuad Dahlan from Mohd Nor, then Dato Idris Jala and finally Tengku Azmi took the helm.

Due respect to Dato Ahmad Jauhari, but he is no airliner. He was merely reading a script prepared Danny. And, there are several major weakness to Danny’s proposals.

Cost-wise, MAS has one of the lowest cost for a premium airline in the region. The problem is with revenue generation. Tengku Azmil failed in this respect. He hired no Commercial Director and instead had two of his Commercial team quarrelling and sabotaging each other.

Everyone knows. Khazanah should know. But Khazanah failed to intervene and address the situation. It is not just Tengku Kamil's fault but also of Khazanah's.

If commercial being the problem, there is no need to do butchering of the airline. The internal initiatives are already in place including the highly profitable Firefly. Instead of pumping money to strengthen MAS and make the initiatives moving, Danny decided to shelve the profitable Firefly’s turbojet to saveguard Tony F’s interest. Pareto optimal my foot?

If as Danny claimed they need money to keep going on and Air Asia can’t pump money, why the need to share swap, do cross holding of share and warrant with them, and Khazanah pump money into Air Asia X?

Danny so-claimed Banks are reluctant to finance and Khazanah is not pumping any more money. By the look of it, Air Asia wants to pump MAS’s money out to Tony F’s Queens Park Ranger football team.

But why did Danny admit Government and likely Khazanah can provide guarantee to raise for the new airlines? Usually, there will be sales of the older fleet to part finance the new planes. There is some money to partly pay for it.

What does Danny understand by the term “simple airlines” if he intends to sell of Engineering and Ground Handling Operations and Cargo business?

Even, if there exit such an airline called simple airline, it is still a full service airline and those operations are part and parcel of an airline operations. It is the core competency of a full fledge premium airline. Furthermore, those are all money generators and growth for MAS.

Who is weak in these areas and need these services? It doesn’t take a second guess to name Air Asia.

Past Outsourcing Mistakes

Danny should learn from the many lessons from the past. Outsourcing failed and trying to outsource engineering, cargo and ground handling will translate to higher cost.

The first outsourcing was proposed by Binafikir and that was catering. Danny readily admitted in his briefing that outsourcing catering to Dato Ibrahim Badawi led LSG Skychef failed and is bleeding the company.

Ibrahim is MAS Adviser and former Prime Minister, Tun Abdullah Badawi's younger brother.

Then Idris Jala bled it further by outsourcing IT and it became a very costly affair to MAS till today. MAS lost an important strategic advantage.

Words from a Pak Lah Sahabat in the IT industry revealed that Symphony’s Dato Azman Yahya is the ultimate beneficiary behind the deal. Isn't it ironic that Azman is heading the committee formulating the CCF?

The underlying problem of MAS from the days of Tajuddin till today is about cost. But the problem is the Government never had the political will to address it!

Government's Mistakes

The major problem with the Government is that everytime MAS lost money, they kept bringing in Merchant Bankers and Accountants to do corporate and financial reorganisation.

It should have been to simply identify the key problems and get airliners to address it.

After the WAU financial reorganisation, MAS needed to improve on the process initiated by Tajuddin but they hired flamboyant salesman Fuad Dahalan who knows nuts about revenue and profit per seat. As long as plane is filled, he thinks it is profitable.

Come Idris Jala, he is no turnaround airliner but just a Butcher. When he realised he is not getting the operating profit and it kept losing, he did creative accounting to show asset sales as operating profit. Then he did long term oil hedging to confuse the accounts and cover his regular RM100 million a month operating loss.

Azmil could be stuck with Idris holes. But why is he an identified accountant practising in PW London, brought back and trained by Penerbangan Malaysia Berhad, became second to Idris Jala and brought to prominence hen the time is right be not allowed to help the transition?

Could he be removed immediately so that he does not become a hindrance for Danny to cannibalise the profitable route and MAS subsidiary on instruction from Omar Ong Rasputin to give it to Tony F before the CCF is consummated?

If the Government has no answer to Shahrizat’s National Feedlot Corporation mess, they will not answer to why all the benefit of sending MAS to it’s demise is Tony F. They couldn't answer to YB Wee Choo Keong's questions and documental proofs in Parliament. No backbenchers and oppositions could stop or interrupt Wee's single man attack.

The public who had been keeping silent on public issues like this may not make noise. But they will surprise the Government of the day to translate it en-bloc to the ballot box.

Najib beware!

- Another Brick in the Wall

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