Pre-MH370 crisis, Mas already struggling with losses

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It would be useful to understand where Malaysia Airlines is coming from. For the nine months to September 2013, Mas posted a higher net loss of RM838m – up from RM482m the previous year.

Even before the MH370 crisis, Mas was trying to focus on volume, by filling up seats through reduced fares – “the load active strategy” – to win over customers.

Stung by poor results, Mas was also trying to cut costs and reduce the down time of its airlines to remain viable. Then there was the price war with Air Asia and Malindo.

In the Edge, 25 November 2013, Mas CEO Ahmad Jauhari Yahya said that the target was to reduce costs by another 10 per cent in absolute terms to return to profitability by 2014.

From The Edge:

This is on top of the over RM1.5bn in cost savings Mas announced as part of its turnaround plan in December 2011. The plan inluded a review of Mas’ network – which resulted in more than RM200m in savings for the airline – a tightening of procurement and an increase in productivity.

In FY2012 ended 31 Dec, the airlines’s operating expenses stood at RM13.52bn vs its revenue of RM13.29bn. A 10 per cent cut in expenses would work out to at least RM1bn, which could prove a daunting task for Ahmad Jauhari, given that a lot has already been cut.

The fact that the airlines saw a reduction of more than RM430m in annual aircraft maintenance expenses in FY2011/12 raises the question of whether MAS has cut costs responsibly.

“We will cut areas that do not affect revenue,” assures Ahmad Jauhari.

That might explain the ‘naked’ nasi lemak and the packets of peanuts.

And cutting back on maintenance costs – I hope they know what can and cannot be cut.

(Update: Read what blog visitor Miami has to say in the comments section below about a recent experience on board Mas.)

And another excerpt:

He says Mas, whose fleet is less than seven years old, is also sweating its assets more – increasing the utilisation of its aircraft and decreasing the down time. The utilisation rate of its narrow body planes is 12 hours while that of its wide-body planes is 14 hours.

Just as our judiciary has never fully recovered from the assault on its independence in 1988, Mas, it would seem, has never recovered from the Tajudin Ramli era. Now, its future looks even grimmer.

What do you think? Should Mas persist in trying to become viable? Or should it just close shop to put it out of its misery?

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kee

loose74, you think our so intelligent pm and the most competent govt will allow it to happen, sell it to sg???

By the way, when i was little, my neighbour makcik said to me, “kita banyak gembira bila cakap orang, tapi kalau dicakap balik naik berang pula.”

And makcik added, “Ini sikap manusia lah!!! ”

Why are we making Anil’s life difficult esp when Anil is doing a great job and provide a free forum for us all ???

tunglang

Thanks Anil for your articles on MH370.
In one way or another, we will see who are our true friends in our neighbours.
Some revealing assessment (more to come, closer to the truth) of the MH370 will show the true colours of such neighbours in times of national crisis.
Malaysia needs a strong leader to deal ‘effective’ with some kia su leaders esp from down south.

looes74

Hahahaha! Why not? Let me refresh your memory with this video clip

Huh? How did we make Anil’s life difficult? Kindly explain. Else, don’t talk c…!

Ok, one of the few things Najib has done right……He settled some issues with singapore including the KTM railway land. If Singapore wanna act tough, KTM may be paid just SGD1. Apa macam?

kee

Loose74, i was referring to rich daddy, not you la… really loose…

looes74

Henson.
MAS is still a reputable airlines. It’s just that it should be under Temasik Holdings. Never mind if it belongs to singapore

Ananars

A man learns to skate by staggering about and making a fool of himself. Indeed he progresses in all things by resolutely making a fool of himself.

Yang

Rich Daddy :

Why get paranoid over an idiot. To every rule there is an exception—and an idiot ready to demonstrate it. Don’t be the one!. The fool who thinks himself wise is the greatest fool of all.

Rich Daddy

I read the blog guideline section that clearly disallow generalization and why allow such generalization by kee ??? All 47% people voted BN = bodoh bodoh ???

Then will you censor my comment if I say those 60++% people voted Pakatan in Selangor = bodoh bodoh because of water rationing. Is that generalization ok for you and your blog policy ???

p/s: I always ask myself why keep engaging with hardcore pakatan fanboys when they are blinded by A.B.U.

Yang

53 years under BN no rationing, 6 years under Pakatan DAP, PKR, PAS you`ve got rationing. 53 years under BN no Allah issue. 6 years under Pakatan DAP, PKR, PAS you`ve got Allah issue. 53 years no hudud issue as BN always declared Malaysia a secular state. Now under Pakatan you`ve got hudud issue. And Kharpal said over my dead body and DAP said they will leave PR. I wonder whether they will sandiwara and who is bodoh.

Now Mh370 DAP & PR tried to create another political issue when the victims families are griefing.

Rich Daddy

Anil, why you so bias and allow kee’s usual generalization like 47% Malaysians are bodoh because they voted BN ??? Is that your view too ???

Islandjoe

Agreed. A pointless statement. As if you’re less biased NOT agreeing to Kee’s statement. Keep doing what you’re doing. This is a great forum.

Yang

Island Joe, Rich Daddy: Yes this is a great forum and don`t get fearful over an idiotic remarks. Remember how he generalised all East Malaysian as stupid. Well he did is right to himself. East Malaysian also comprised DAP, PR and the 53% PR supporters like himself

tunglang

Rich Daddy, some people among the 53% clever are entitled to worship Kapitan Deity (based) in Cosmopolitan Penang for as long as they are breathing in 3 morning joss sticks smokes to their delirium of highs + lows. Drink more Kopi-O kau kau to clear your mind of these personalised negativities soaked in self delusion expressed in anilnetto.com. 13 Sunday is lucky day! MH370 is a bad national crisis but we need to separate it from political potshots tied to psychological highs + lows sensitivities which will never bring us closer to the truth. I still ‘see’ Diego Garcia, a… Read more »

looes74

Southern portion of Peninsular Malaya starting from KL to Singapore. It’s not AWAC, tunglang. It’s E2 Hawkeye. You think Malaysia will not have strong protest hah if the Radar system cover all the way to Thai border.

The question is on Malaysia incompetency in handling the entire MH370 issues. BN/UMNO screwed up. In Japan, ministers would have to conduct sepupu

tunglang

looes74:The question is on Malaysia incompetency in handling the entire MH370 issues. BN/UMNO screwed up.

Have you been drinking too much NEWater lately?
Can’t be more simplistic in your NEWatered down assessment. The reality of geo-politics is much more than screwing up for all to see, apparently. There maybe hidden arm-twisting by foreign party to hide a crime.
The apparent SingLand’s kowtow dancing with US big brother policies. “You scratch my back, I scratch yours” is the mantra of SingKahPoh – US tango for the sake of 1st world development at all costs.

Yuk Lo

Too bad it was a Malaysian chinese lady who invented NEWater for Singapore where meritocracy is practiced. Next time when Bolehland runs out of water du to prolonged drought, only then realisation of a talent lost!

http://sgforums.com/forums/10/topics/34684

kee

After the incident of MH370, the CEO of MAS vows that he will see to it that MAS will soar again???

Did Mas ever soar in the past decades? Now, with the calamity of Mh370, can MAS soar??? Didnt he know MAS is now having a very bedsore…

Too many clowns in play, this country sure koyak !!! Thanks to the 47% bodoh bodoh…

Islandjoe

Yeah and as usual without a real media on hand to ask “how?”, so it’s a hollow boast. In the next breath they actually have the nerve to say they need to upgrade the fleet!! Easy when you use our tax dollars for financing. I can say that as well in that case! Then the next one after that is that there will be zero job cuts. Really?? To soar or to continue being SORE?? It just goes on and on. Close it. We’ll be better off. And believe me it’s painful because I used to be so proud of… Read more »

Yang

Yes and thanks to the 47% bodoh bodoh you can still fooling wise here

kee

The country under the leadership of BN/umno for the past 5 decades and more is now sinking fast…

The nightmare is we still have 47% under the spell of umno/BN. We even have readers here trying to resurrect gerakan…

Malaysians manyak bodoh beyond cure !!!

johanKhunPana

Like it or not, MAS is a national burden. In order to revamp MAS , the entire top management must go and all contracts to be review. MAS is not making money due to foreseeable circumstances but political connected suppliers sure do. Even then, MAS cannot be held 100 % as the company need the approval from Minister of Transport and the entire cabinet in making big decisions. The sad and unexpected MH370 incident added more fuel to the fire. And is Abdullah bin Ahmad Badawi still serving as MAS’s advisor? How much are we Malaysians paying for his “services”?… Read more »

Rich Daddy

MAS the best air lines in Malaysia (first and business classes). Save it if it is possible. Please do not comment AA is better if you never fly MAS before.

Yuk Lo

Idris Jala used to balance the book of MAS by selling its assets (eg. buildings and paintings).
When an airline is in financial trouble, the morale of staff will be affected and safety could be compromised?
Today MAS is worth 20 sen/share, it BN is weaving its bailout magic again, not surprise if the buy-out price could be RM2?

najib manaukau

It is a true reflection of what the Malaysian government is, especially when it comes to organisations run by lackeys appointed by the Umno schmucks. Just compare MAS with SIA when all the schmucks from Umno would not even permit Singapore to name its airlines with the name anything similar to MSA not to mention the routes they were allowed to operate. That was to make sure, they thought, would ensure the airlines started by Singapore would be bankrupted. MAS even brought in Brunei as partner in the earlier stage and how many people in Malaysia know why Brunei pulled… Read more »

Phua Kai Lit

Sell Malaysia Airlines to Singapore Airlines in order to save it ??

henson

Phua Kai Lit
SIA’s famous tagline Singapore Girl – quite a big number of the Girl are actually Malaysians.

SIA wants the girls not the planes.

looes74

Henson,
There was one CEO who was a Malaysian. Singapore PR la. Hehehe!

bigjoe99

MAS prices are now cheaper than Air Asia and I was still taking Air Asia because their schedule and frequency allows me to get more done..But I flew a few times on MAS lately when I was not in a hurry only to find they are late EVERYTIME AND Chef Wan was not exaggerating about the Naked Nasi Lemak

islandjoe

Didn’t MAS say that they would be cutting costs WITHOUT any job cuts? This is of course ludicrous. So 1 of either 2 things: 1) They are not sincere in reducing their costs and is only lip service while they suck our tax money year after year; OR 2) The fat contracts with suppliers are so OVERPRICED in favour of suppliers that they can cut significant costs without needing to cut staff or services I wonder how many airlines with turnaround plans were successful without ANY job cuts. I say get rid of this type of MAS. We don’t need… Read more »

henson

MAS is a liability to rakyat’s hard earned money.

Somehow there is a sizeble Malaysians who must defend with pride anything there is a word of Malaysia in it. For example, there are now many fans who support Cardiff just because they wear “Visit Malaysia” logo on the jerseys and also those who support QPR because their jerseys bear AirAsia.

Now MAS worth 20 sen. With bail out may be to become part of Syed Mokhtar’s empire the stock can then become RM2 or RM20 ?

Miami

On the 31 of March I flew with the MH 16 to Amsterdam…..lucky me the pilot could find Schiphol airport even on the 1st of April!!! It was indeed a cheap flight thats why I choose this destination instead of Frankfurt. The crew, one exception only, was so stressed…they were absolutely rude to the passengers, could read the fear on their faces! They need trauma trainings or….another job! If MAS doesnt do anything about it, the end is near….for MAS I never heard so many complains on a flight… Beside the rudeness of most of the crew…..there wasnt enough food… Read more »

looes74

Sell to MAS. Problem solved

Islandjoe

MH = Malaysian Hospitality is a joke. At one stage they were touting that MH rubbish while when you checked in at Heathrow, but it was through Alitalia staff who treat you like dirt. When you asked for a MAS staff supervisor, none available. Then you see on the attitude of cabin staff/service and it adds to the the hypocrisy of it all. European airlines with horrible service would never have the thick skin to go on about a myth. KLM with blunt grumpy cabin staff are at least efficient. It says it all about MAS and Malaysia with its… Read more »

looes74

Island,
One got to be fair. I don’t think the MAS staffs are that bad. Frankly, UA or even BA can be horrible too. The problem is with the government & those at the top. Though I kinda pity Jauhari though. Like I say, to solve the problem, sell to SIA