MAS TROUBLESHOOTERSMAS TROUBLESHOOTERS

WEDNESDAY, 23 MAY 2012

MAS: TURNING AROUND OR SPINNING?

On Wednesday May 23, 2012, the STAR wrote:

RM9bil fund raising to enable MAS to continue uninterrupted

PETALING JAYA: Malaysia Airlines

(MAS) yesterday surprised the market place with

a massive RM9bil fund raising proposal that

involves the issuance of bonds and taking a loan.

This is the fifth consecutive quarter of loss for the

airline and though the amount has narrowed

compared to the previous corresponding quarter

in 2011 where it reported RM242mil net loss, but

when stripped of the non-cash items, the net loss

for the first quarter in 2012 was RM347mil.

It is essentially the RM199mil forex gain that

narrowed the losses for the first quarter.”

On the contrary, we have gathered that:

MALAYSIA Airlines (MAS) is perhaps the only Malaysian company that has

undertaken the most number of restructuring exercises over the past decade to try to

get back on its feet. A decade ago its books were severely tainted with red ink and

had to be cleaned up via the Widespread Asset Unbundling (WAU) exercise where

it became an asset light airline. But 10 years later it is still in dire straits and

appears not too far from where it was a decade ago.

The state-owned airline has already had two rights issues since Idris Jala took

over, raking in RM1.6 billion in 2007 and RM2.67 billion in 2010 to fund its

operations and fleet purchases.

Industry experts said that a further injection of cash will not save MAS as

“operational fixes” are required. Most of the past solutions for MAS, either the

WAU or Idris Jala’s business transformation plan, were financial in nature to keep

the airline in the black. But what is needed are operational fixes.

Its cash and cash equivalent have depleted to RM968.5mil as at Dec 2011

compared with RM5.2bil in Dec 2007, a rapid rate of cash depletion of almost

RM4.3bil in four years.

THE 2001 and 2003 ORGANISATIONAL DIAGNOSIS

Since 2001, the WAU Team has not been able to fix "operational issues" in MAS

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as highlighted by the late Tan Sri Azizan in the Berita MAS dated September 2001

and September 2003 and summarised below:

SEPT 2001

1. TO RE ENGINEER THIS ENDANGERED COMPANY.

2. THE ORGANISATION STRUCTURE OF THE COMPANY IS FOUND TO BE

NOT

CONDUCIVE TO AN INTEGRATED APPROACH.

3. REVIEWING AND IMPROVING THE PROCESSES AND PROCEDURES

TO PLUG THE RAMPANT LEAKAGES AND STOP THE

HAEMORRHAGE.

4. BEHOLDEN ON US TO PROTECT IT FROM PREDATORS.

5. PRESENT FRAGMENTED MAS IS NOT IN THE RIGHT STATE.

6. MAS CULTURE IS DOMINATED BY A “SILO MENTALITY” RESULTING IN

UNINTEGRATED AND UNCOORDINATED ACTIVITIES.

7. FOSTERED ABUSE, PLUNDER OF THE COMPANY FOR PERSONAL

GAINS, HIGH

COST, INEFFICIENCY AND HAS DRIVEN THE COMPANY TO NEAR

BANKCRUPTCY.

8. DEDICATE OURSELVES TO CREATING A NEW CULTURE GROUNDED IN

A FEELING OF COMMON RESPONSIBILITY, BASED ON

ACCOUNTABILITY.

SEPT 2003

1. TO ENSURE THAT FACTIONALISM FOSTERED BY THE CLAN CULTURE

WOULD NOT BE AN OBSTACLE.

2. ALWAYS STRIVE TO SUPPRESS ANY TENDENCY TOWARDS

FACTIONALISM.

3. THIS REQUIRES A CHANGE IN MINDSET AND A NEW CULTURE.

4. WE HAVE TO PREVENT LEAKAGES AND WASTAGES.

5. GOOD FINANCIAL MANAGEMENT IS ESSENTIAL FOR OUR

SURVIVAL.

THE SHORT TERM GAIN, LONG TERM PAIN

This is the fourth in a decade after WAU, Business Turnaround 1 and Business

Transformation 2. The same people who crafted WAU are back hammering

out a share swap without proper due diligence and based merely on

“judgment call” instead.

Had they put in place a long-term plan then, would MAS be in this state? The new

team “has taken a short-term view of MAS when they should have engaged with

the experts from within to get to the root of the problem as the 2012

Business Plan does not address that.

MAS' poor showing can be attributed to three factors; lack of good leadership

management, people management and cost management in the last 15

years.

An example of poor leadership can be demonstrated in the email below:

Received from EN.XXX 87772344 06-12-05 13.01

-> IDRIS.JALA MD, IDRIS JALA MD/OFF

-> MAS.$$MESA MAS EXEC STAFF ASSOCIATION

-> MAS.CHAIRMAN DATO' DR MOHAMED MUNIR CHAIRMAN

W'SALAM,

Puan XXX/Bro XXX cpy Saudara Idris/Chairman/$$MESA,

BERANI KERANA BENAR, TAKUT KERANA BERSALAH.

InsyaAllah, together we can help our new MD to turn around this ailing and beloved

airline even better than before. We have the ingredients, I can sense the honesty,

sincerity and determination in our new MD.

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Posted by THE TROUBLESHOOTERS at 08:19

First hurdle is to raise staff morale, another word we need morale booster.

Second hurdle is to remove CANCEROUS ELEMENT. We can't afford to

have enemy

within. We have enough enemy outside.

If we can go past these two hurdles, the turnaround will be very smooth.

We have done it before; there is no reason why we cannot do it again and even

better.

The "Flying Buffet" if it is true, hopefully not, already created a lot of damage

to staff morale. Leadership by example and accountability is very important in our

organisation which fly national pride.

Together we can do it.

Rgds/XXXX.

MESA President.

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3 comments:

Anonymous 23 May 2012 09:20

Tan Sri Abd Aziz baru keluar interviu TV3.

Betul dia cakap, Gomen takleh bailout MAS banyak kali. Take it private and let the

new owner fix the problems, baru ada akauntabiliti.

Reply

Anonymous 23 May 2012 09:22

Habislah duit EPF aku, bini aku ,anak aku, saudara mara aku, kawanku ...kejam

kejam!

Reply

Anonymous 28 May 2012 06:20

This is not acceptable. MAS management past and present must be penalized and

taken to court for abusing their power and tax payer money. Otherwise, criminals will

have a field day.

Reply

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