Thursday, November 30, 2006

All-round Doubts About MAS' Success.

MAS' reputation has reached such a low level that even our Honourable Members of Parliament have openly expressed doubts about the 'profits' recorded by the national carrier. Some have even urged the government to be more transparent about the airline's profit. What a turn of fortunes for a one-time trailblazing superstar of an airline for whom even the sky was not the limit.

There was a glorious past in MAS' chequered history when profits were taken for granted and its Golden Service was world renowned. What happened to all that? Now even a simple declaration of profit is questioned and MPs want to know whether the profit posted by the national carrier was attributed to the sharp increase in ticket prices or other surcharges! They are of the opinion that the airline made a quick recovery because it raised ticket prices, retrenched workers and sold assets including the MAS headquarters building.

"Everyone can make a profit in business if they raise ticket prices ... so we want the government to be more transparent about MAS' profit," said Datuk Raja Ahmad Zainudin Raja Omar (BN-Larut) in the Dewan Rakyat. The government however maintained that the profit gained by MAS was "the fruit of the airline's turnaround plan" implemented about a year ago," and it has been restored and is now able to cut costs and the profit will increase.

Through all this, 'close-one-eye' MP for Jasin Mohd Said Yusof managed to squeeze in a demand for MAS to revise downward its fares following the significant fall in the world's crude oil prices!

After five consecutive quarters of losses, MAS recorded a net profit of RM240.7 million in the third quarter ending Sept 30. It posted a net loss of RM366.4 million in the same quarter last year.

Group revenue during the quarter under review rose to RM3.63 billion against RM3.07 billion a year earlier.

The profit is partly attributed to a one-off gain of RM194 million from the sale of MAS' headquarters here and compensation received from the government. The company also saved cost after it cut unprofitable routes and reduced workforce.

The airline said passenger and cargo yields also improved tremendously since the implementation of its turnaround plan.

Its net loss in the first nine months of this year was RM257.9 million from RM532.6 million in the same period last year.

MAS is targeting to cut losses to RM620 million this year and to post a profit of RM50 million next year. It also expects to turn in a net profit of RM500 million in 2008. (-- BERNAMA)

***** Posting a RM500 million profit in 2008? Isn't that a little too optimistic? I'm sure that among the readers of this blog there will be some who are in the know about the aviation industry and especially on issues pertaining to MAS. It would be really great if you could enlighten us on what the real situation is and where MAS is heading.

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6 Comments:

Anonymous Penangboy said...

Cutting costs mean cutting maintenance on aircraft, cutting workings on the ground and on the planes, and reducing backup fuel on board the planes. How will MAS achieve their RM500m profit when its planes start falling out of the sky?

6:22 AM GMT+8  
Anonymous Anonymous said...

I have been following the MAS saga for some time now.. All I can say is "Wake up Malaysia!"

My blood boils when I read about all these incompetent politicians making a mockery of very effort we make in this coutry to be competitive! And profitable! What is so wrong about implementing cost cutting measures, yes including reducing work-force size, increasing fares to bloster revenue etc? Isnt that what every business strive to do?

Is Idris a "madman" to run MAS like a business? My only wish is that more GLCs are run like proper businesses!

Look at the alternative, would you prefer if the government continues to use your tax monies to aid MAS so that it can go on treating these bunch of thugs called politicians like little royalties when they travel? Which is why they abhor travelling Air Asia where they are treated like everyone else! Well done Air Asia..

I wouldnt waste my breadth trying to convince these "sorry excuse for politicians" that we have in our midst, (its a waste of time, they'll struggle to even make sense of simple financial statements, let alone understand the complexities of airlines industry), but for the rest of us, give the guy (Idris) a break!

For those of you who still bitch about the fare hike, consider simple micro economics principles.. If the fares are too high and no longer competitive, would Idris be able to announce a PBT of 240M for Q3(if this is true of course)? The planes will be flying half empty and soon will be forced to reduce price anyway no?

What we should be bitching about and demand for are greater transparency and accountability! Only then we will know what is exactly going on in our beloved Malaysia.. Till then lets support the effort to make MAS a viable business just like how Tony Fernandez has made AAsia one!

12:17 PM GMT+8  
Anonymous Anonymous said...

"Through all this, 'close-one-eye' MP for Jasin Mohd Said Yusof managed to squeeze in a demand for MAS to revise downward its fares following the significant fall in the world's crude oil prices!"

Mr. close-one-eye should also request the same from the government to reduce petrol prices on his admission that there is a significant fall in the world's crude oil prices! If you want to represent Joe public, go for the jugular and don't try to be heroic in matters that don't represent the general public's interest.

1:03 PM GMT+8  
Anonymous Anonymous said...

I have been following aviation for 30 years. Turnaround plans are pretty standard. Cut costs; boost revenue.

Idris is doing his best. What he learnt from his Shell days.

1:53 PM GMT+8  
Anonymous Anonymous said...

Idris does his best. Among the business class that have been full are those on MAS and Thai.

A freind travelled to the UK and said even in business class seats were fullish. Mainly Aussies going to UK. Something are going right for MAS.

1:56 PM GMT+8  
Anonymous Anonymous said...

MAS service sucks! I used to use them years ago and they were fine for a national airline, but in the last 2 years their service has dropped to levels you would only expect from Kazakhstan Airlines. The key driver is staff satisfaction. If the staff are not happy, no amount of smiles will hide it. And the ones who bear the brunt will be the passengers, who will then take their dollars or RM elsewhere.

6:57 AM GMT+8  

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