Corroboration collapse?

Separate ways?

The Utusan Malaysia ran a story suspecting the collapse of the corroboration between Malaysia Airlines Berhad and Air Asia Berhad.

There has been talks. Read Syed Akbar here.

The reason cited was that it did not benefit MAS but only skimmed MAS lower into the abyss. However, the source to Utusan Malaysia claimed the cancellation would have negative impact on MAS.

Can this news be trusted or it is just a decoy pulled by the current so-called turnaround 'management team'?

We at ABITW holds the believe that it is better that the corroboration did not fall through because Khazanah or Azman Mokhtar himself have 'decayed' in his words to keep each airline remain in their respective matrix or quadrant.

Typical con and insult or 'consultant' thinking. A much better word would have been market segment.

Let's read the Utusan Malaysia news first:

Perjanjian MAS, AirAsia batal?

KUALA LUMPUR 11 Mac – Pertukaran saham antara Malaysian Airline System Bhd. (MAS) dan AirAsia Bhd. (AirAsia) dipercayai akan dibatalkan kerana perjanjian yang dilaksanakan sejak tujuh bulan lalu tidak memberi sebarang faedah dan kelebihan kepada MAS.

Sumber berkata, spekulasi pembatalan pertukaran saham MAS-AirAsia itu kini semakin hangat diperkatakan dalam pasaran dan dipercayai turut menjadi perhatian kerajaan.

"Sama ada perjanjian tersebut benar-benar dibatalkan atau dirombak semula, perkara itu dijangka berlaku.

"Cuma persoalannya bagaimana ia akan dibuat kerana dikhuatiri pembatalan atau rombakan akan memberi implikasi kos kepada MAS.

"Kalau ia berlaku (implikasi kos), dikhuatiri akan memberikan kesan yang tidak baik kepada MAS yang kini dilanda krisis,’’ kata sumber itu kepada Utusan Malaysia.
...

Sila dapatkan naskhah Utusan Malaysia hari ini atau ikuti Utusan Online selepas 6 petang untuk artikel penuh.

If it is true, the real reason could be political. As we had wrote earlier, MAS and the airline industry can potentially effect 100,000 voters against Barisan Nasional.

The union have warned Dato Seri Najib that they will not vote BN if their jobs are affected. The staff are currently unhappy because they planned personnel cutback will be from 22,000 to 5,000 for long haul and 5,000 for short hauls.

Thus far the management promises no retrenchment benefit and unethically encourgaing good senior staff to find a new job or go for free transfer to the two operations.

The clueless and the heartless

The heartless and ruthless cum Tony F's proxy, Danny Yusoff will lead the short haul, while the clueless puppet Ahmad Jauhari will lead the long haul. That is one dream choice of employers Khazanah has lined up for MAS employees.

Apart from the stated benefit reasons, there is fundamental flaw with the MAS management so-called 'turnaround' plan and even with the view of Tun Dr Mahathir (although we notice he has begin to change his view) to cut more cost for MAS.

MAS is a full serviced premium airline, thus the low cost, low ticket price and thin margin mentality of Air Asia is not suitable.

Currently, MAS runs at a cost of 25 sen per cost available seat km. In comparison to Cathay Pacific at 30 sen, and SIA at 29 sen, it is already the lowest cost premium airline in the region.

The Danny Dungu Yusof's plan to cut cost by more outsourcing and repeating his Bina Tak Cukup Fikir's WAU plan of outsourcing is ridiculous.

MAS problem lies at the revenue side. Despite their high cost, Cathap Pacific achieved a revenue of 33 sen per available seat km and SIA 31 sen. While, MAS is going at 20 sen.

Clearly the problem is marketing, which under Tengku Azmil was a mess. The root of the problem is that during the time of Idris Jala, the Business Tranformation Plan entails improving product.

Other than having nuthead in the form of Dr Amir in the commercial team and there was no director but an accountant airline newbie as CEO, the main reason was inferior product.

In our investigation, we uncovered that the reason was Azmokh who refused to pumped money in that direction. He refused to spend via refurbishment or newer latest airplane with up-graded facilities.

With a product problem, MAS pricing was out of whack. How could you have good placement and promotion when an Assistant Commercial Director throwing chairs at each other in meeting and each sabotaging each other at the cost of the Company?

There you go.

But this does not mean Idris Jala was any better as being praised by fellow Evangelist, Lim Guan Eng. He was a pathetic butcher from Shell unable to see the wood from leaves and see retrenchment and asset sales as an automatic solution.

He made no money was losing RM100 million a month but covered it up by merely selling asset and passing it off as operating profit. Remember we said of past practise in MAS to use non cash profit item to cover for operation loss?

When he couldn't get profit, he hedged fuel at the top and MAS profit and loss goes out of whack to reflect the oil market then the company's true profit and loss.

He was caught when he announced profit but did not disclosed the more than RM350 million operating loss. That cost him his job at MAS.

Oh well, why should we believe Guan Eng's praises. He is but a compulsive liar who does it publicly on a weekly basis.

Despite commercial being the problem, the new turnaround idiots were cutting profitable and strategic routes which are part of the important network of airlines, closing up or let's use a canggihword, repositioning the profit making Firefly into Sapphire and outsourcing operations like cargo.

There is then the cutting up of capacity by 12%. You cut capacity like what the stupid Idris Jala did, you cut your potential income source. It is like you close a line in a factory and your profitability potential is slashed down immediately.

Pan El of the millenium in the making

All these benefited Air Asia.

Air Asia X was heard to try and pick the pieces of destinations like Sydney, London, Buenos Aires, etc.

Insiders' sources claimed that Tony F and not surprisingly possible proxies of Khazanah people and even the management team have interest in companies getting the outsourcing of engineering, training, ground handling and cargo business.

Over time, we shall name names.

What makes it worse for MAS is that the CEO is cluelessly dumb. He could tell the staff that Air Asia has no flight for long and medium haul. Air Asia-X itu apa bang?

The real concern we have with Air Asia is that not only it is based on low cost, low price and low margin, it is also based on high growth model. Air Asia's cost is 10 sen per ask and it's revenue is 13 sen per ask.

That is the reason they are being mischievous and unethical.

Recently Air Asia have been cutting their own routes too. As it is Syed Akbar said that Singapore has refused to maintain Air Asia planes and Qatar and Brisbane airports are not allowing Air Asia airplanes.

Read Syed Akbar here and here.

How will their grow and grow plan to work?

Without high growth model, who wants to invest in company with low profit margin company in a highly capitalised industry?

Come down to earth or they will go under.

Air Asia has got a fleet of 110 airplanes and ordered up to 300 from Airbus. Rumours are saying Tony F had boosted that he verbally told the French President Sarcozy to be prepared for 500 air planes.

Thus far it will cost USD6 billion, so where will Air Asia get the money to pay for that and their right issue of RM1 billion for MAS rights issue?

We strongly believe these MILFers entered MAS to secure and draw out information for the final rape.

Don't be simplistic and demand fast answer as to just take Air Asia as partner for MAS to turnaround it. Air Asia have not gone around the block and yet to see a crisis.

Most companies with similar models get wiped out in one crisis. We've not known the financial situation of Air Asia-X. Not many knows that it is a losing concern.

What about the financial situations of all those Air Asia's subsidiaries in all the countries they fly to in Asia. The partners of each one of them are politicians or dictators which for all likelihood are milking the companies.

No one really knows.

That is what we meant of Air Asia as potential Pan El of the new millenium. If anyone of you have no idea what is Pan El, that should tell you that you are still wet on the corporate game. Air Asia can possibly bring down the regional stock market.


If not Air Asia, the public wants a solution fast. Many are fed-up with the repeated loss of MAS. How much more recapitalisation and public money to pump in? Hantu Laut here have even talked of closing up.

How about East Malaysia? Who is to service them?

Air Asia? Not on your life! By the time they say so, they are probably six feet under and saying it for the sake of a lifeline. Bankrupted!

MAS needs RM6 billion for 2012 and RM4 billion for 2013-2015. We can't simply closed it. MAS has commitment like the A380s. It's got to carry on.

If the company had been profitable, MAS would have still need recapitalisation to prepare itself forward and prepare for bigger sales.

The solution is to save it and stop the leakages to Air Asia. Get true airliners who understand airline business. There are many honest and dedicated professionals if the Government care to listen to the right people.

Heavens! Not a loud rude obnoxious opportunist ... conman like Tony F who is getting on the public nerve. You expect public will support MAS with Tony F around? Read Jailani here.

Government has to kick out the incompetent Azman Mohtar. He has not even been tested to manage a company and yet he is allowed to manage Khazanah.

Start him from the basic like a bugger stand. If can make money, we'll give him a second chance. Send Danny to some Chinese shopkeeper to learn the real accounting.

Get someone tested, experianced and young like Dato Abdul Wahid Omar. Enough of these PTD like exclusive elite mentality of MCOBA boys messing up one GLCS after another GLCs

The staff has to change their attitude. With the company in such a mess, why should MAS wants to have new uniform and launch it Hamburg, and kept moving and renovate offices.

Best of all, spend 18 million sterling pound to advertise for the home game while Air Asia take teh away game for a relegation bound team while Genting pays for less on Aston Villa and say it is justifiable.

That's Dungu Danny everyone flying MAS to the ground... !


- Another Brick in the Wall