7 reasons against the secret MAS – AirAsia share swap

Tan Sri Md Nor Md Yusof (in AirAsia's colour tie) : You and the two BinaFikir boys have "SAVED" MAS under WAU in 2003. In 2011 the ex-BinaFikir boys and you "SAVED" MAS again under the secret share swap! Great help.

7 REASONS WHY KHAZANAH MUST NOT UNDERTAKE THE SHARE SWAP BETWEEN MAS AND AIRASIA – PART 2 – The article by troubleshooter2011@gamil.com

Read Part 1 HERE.

1. MAS IS A NATIONAL ASSET JUST LIKE PETRONAS AND TNB

MAS’ primary purpose aside from performing its aviation role is to, as mentioned in my earlier piece, promote Malaysia as a tourism destination, to facilitate trade between countries under a G to G environment and also to facilitate outreach to new destination for strategic and commercial purposes. Because of this it should NEVER be in the hands of an entrepreneur with a vested interest in a similar industry let alone any other entrepreneur. The problem started even with the appointment of an entrepreneur many years ago because the government failed to differentiate the nature of the asset. What transpired was that entrepreneur had to think of ways and means to offset his individual debts in taking ownership of the airline and therefore may have compromised the asset because of this. A similar pattern is developing now with Air Asia where the entrepreneur will undertake actions to best serve his purpose. If looking at SIA, where it’s successful is because it recognises this fact. Therefore the running of the company is left to professionals who have no vested interest and can be hired or fired based on the KPI’s given to them. This also allows for the airline to be run by the ‘best man for the job’. What you need is a CEO with an entrepreneurial mind, professional conduct and culture. With proper assessment, there are many who could step up to the plate. MAS is a national asset and should be treated as one just like Petronas and TNB and other strategic assets that need to remain under government control and directions as it also performs its corporate social responsibility to the country and its citizens.

2. THE COLLABORATION FOR COMMON BENEFIT CAN STILL CONTINUE WHEN THE SHARE SWAP IS REVERSED

Recent collaboration announcements made is welcomed and should continue after the share swap is reversed. This will test the sincerity of Air Asia VENDORS WHO ARE MALAYSIAN. Under a normal business collaboration framework, whatever cost that can be cut, brings better economies of scale for competing entities, creates healthy competition at the supplier level to drive cost down and eventually pass on to the consumers of both MAS and Air Asia should be encouraged. For example, the utilisation of training assets could be shared and Long Term Service Agreements (LTSA) with Aircraft Engine Manufacturer and other critical components for common benefit should be explored. Hangar sharing and MRO activities at cost competitive pricing should also be looked at diligently. These can happen with or without a share swap but if Air Asia insist that these happen only with a share swap then MAS can still go it alone as they have already invested in the assets and have little capital expenditure more to be invested in these particular areas.

3. KHAZANAH CAN ENSURE THAT THE MAS BOARD COMPOSITION CONSIST OF INDIVIDUALS WHO ARE PREPARED TO CONTRIBUTE TO THE WELL BEING OF THE COMPANY AND SHOULD NOT BE ‘CORPORATE PERSONALITIES’ PER SE

The members of the Board should put the Company first in terms of discharging their fiduciary duties and need to be compensated for their efforts. A Board Member who is not dedicated in the best interest of the company must not be considered. If the notion of the Board being a compliant Board is taken, then there is no active energy or debate at the Board level to provide a check and balance to the management of the company. The Board should be innovative in thinking to challenge the management to come up with new initiatives that keep the company at the highest competitive level and not just rubber stamp approvals based on papers presented to the Board.

4. THE ULTIMATE STAKEHOLDERS IN MAS AND AIR ASIA IS THE PUBLIC AND THEREFORE SHOULD NOT BE SUBJECT TO ANTI COMPETITION BETWEEN TWO COLLABORATING ENTITIES AND FORCED TO SUPPORT A ‘PREMIER AIRLINE’ WHEN THERE IS NO NEED FOR ONE

The public were already happy with the competition and choices that were present between MAS and Air Asia that drove both companies to vary their product and services in order to capture their market share and serve different segments of the markets. It was already working and therefore there is no need to change the competitive nature of the industry for the paying public. What needed to be intensified was, the level of ‘good service provided’ and not the requirement for MAS to provide ‘premium services’ as generally the market in Malaysia or for MAS is not sufficiently large to capture this premier segment. Malaysia is not a financial or business hub where there exist a large number of premier passengers unlike Hong Kong and Singapore. Converting MAS to be a premier airline will entail capital spending and in turn will result in higher fares where PASSENGERS ARE NOT WILLING TO PAY. A quick check on company policies around the world whether MNC, Private, GLC or any other corporation is that there is a move to limit the number of persons flying Business and First Class on company expense. Most companies are adopting a policy of lower entitlement for the general staff while keeping premier services to select few. Therefore, entering a premier segment when the MARKET SIZE IS SHRINKING DOES NOT MAKE ANY SENSE AND IS IN FACT SUICIDAL FOR MAS.

5. KHAZANAH AND THE GOVERNMENT SHOULD NOT UNDERESTIMATE THE MALAYSIAN PUBLIC WHO KNOWS WHEN THERE IS A GOOD DEAL OR A BAD ONE

The Malaysian public is now a very informed society and not blinkered as before. Because of ready available public information, the public can weigh in their opinions on what is good and what is bad. By trying to shove a deal like this down the public’s throat it actually exposes the incompetence of the executives and parties making this decision. This does not bode well for the country as it exposes shortcomings in our decision making process and will affect investor’s perception of doing business in the country. You will know when the public is okay with Government corporate deals when there is no real outcry on the subject. For example, when Khazanah took over Parkway, the only gripe was whether Khazanah paid the right price but in terms of Khazanah’s rationale in creating a regional healthcare champion, there was not too much outcry as the public can appreciate the rationale in having a major investment in the healthcare industry although the private healthcare market may not be assessable to all segment of the public.

6. KHAZANAH SHOULD HAVE DONE A GAP ANAYLSIS ON THE STATE OF MAS INSTEAD OF THE SHARE SWAP AND ASK THE RIGHT QUESTIONS

Khazanah should have done a GAP ANALYSIS when MAS reported losses in the recent quarters. The key towards turning around Operations, is to understand whether management was narrowing the gap on all their cost elements. For example, in my earlier piece, I mentioned that the previous MANAGEMENT WAS ALREADY ON THE RIGHT TRACK. They were addressing the issues of cost associated to fuel, manpower and maintenance and the question to them should have been, “How much improvement have they achieved q-o-q and y-o-y? If there is a positive trend on all these elements, then even though the results are negative, it would be a matter of time for the right results to be achieved. It is especially important to have the right people asking the right questions in order for any turnaround to be effective. This is where Board composition is important and having wisdom in knowing whether people are on the right track or not.

7. KHAZANAH SHOULD UNDERSTAND THAT EVERY COUNTRY IN THE WORLD SUPPORTS OR SUBSIDES THEIR STRATEGIC ASSETS WHEN NECESSARY AND DOES NOT PUT PURELY COMMERCIAL TERMS ON PERFORMANCE

The aviation business model has changed dramatically over the decades and will continue to change significantly over the coming years. What is certain is air travel has become commoditized. Loyalty to any airline is only as long as the passenger is sitting in the aircraft. Beyond that, the passenger will choose best connectivity and best pricing for his travel requirement. What is required is for Khazanah to not only measure MAS from a financial performance standpoint but also from a public/national agenda point of view. As mentioned in my earlier piece, the aviation space is a critical playing field for every nation, especially a country like Malaysia that is trying to pull in tourism income. Every country assists its aviation companies in one form or another, so we should not be fooled to think that it’s a level playing field out there. Get a proper and dynamic BUSINESS Model for MAS to prosper further. Shares swap especially WHEN NO MONEY IS INJECTED is not the answer.

THANK YOU

MAS LIBERATORS @ troubleshooters2011@gmail.com

09 October 2011

For further reading, refer below:

https://weechookeong.wordpress.com/2011/09/25/tan-sri-nor-yacob-azman-mokhtar-wake-up-learn-from-tan-sri-abdul-aziz/#comments

How and why it started below:

http://rockybru2.blogspot.com/2009/06/six-things-mas-must-do.html http://rockybru2.blogspot.com/2009/06/mas-responds-to-hbloggers-posting.html http://masliberators2009.blogspot.com/

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23 thoughts on “7 reasons against the secret MAS – AirAsia share swap

  1. arjuna waspada

    Wee Choo Keong, syabas atas ketekunan anda atas AA ambil alih MAS 25 %.
    Amat konsisten dan tenacious dan persistently doggedly.
    terima kasih dan saya yakin anda akan terus juangkan hak Malaysia daripada mereka yang buat self enrichment with OPM dan duit pembayar cukai.
    Terima kasih YB WCK.

    Reply
  2. MAS Jokers

    Terima kasih Yang Amat Berhormat.
    Satu contoh yang terbaik “rakyat didahulukan pencapaian diutamakan”

    Yang lain, tidorkah atau gaji buta atau just plain IXXXT?

    Saya ingin sarankan kepada PM supaya memilih Menteri Pengangkutan dari kalangan Ahli Parlimen yang berwibawa dan berkerja keras “without fear or favour” dengan izin walaupun dari Ahli yang bebas.

    Long live YB Wee CK

    Reply
  3. MAS Bugger

    Well done,YB and all.

    More questions for Khazanah

    1. Khazanah has replaced 4 MDs since 2002 with horrendous results, what make they think this is the qualified one. We know for a fact that he got zilch experience in running an airline and cannot answer the Unions saitsfactorily.

    2. For FY 2010, Air Asia declared 1 billion profit at the back of 4 billions revenue, a profit margin of 40%. In contrast, the best airline in the world SIA on average make a max profit of 10%. Hello, has anybody in Khazanah studied Air Asia Financial statement and determine the real OPERATING profit and not due to hedging, forex, future sales and other mumbo jumbos.

    More Q later.

    Reply
  4. anonymous

    YB there is no point in trying to educate people like Tan Sri Azman Mokhtar. He will carry on to pretend to be stupid. This share swap is plain ridiculous and no one in the right mind would agree to share swap based on share price. Only people with such “high Education” like Azam and his former business partner (Danny) would agree. Brainless idiots.

    The country must get rid of such “highly educated idiots” otherwise our country will be koyak by them.

    Reply
  5. Mohd of Khazanah

    YB balun Azman Mokhtar, Rashdan, Azman Yahya dan Nor Yacop. Mereka perlu diajar dengan perkataan yang “sesuai” di Parlimen. They are bas…ds of the worst kind.

    Reply
  6. Lee

    “Share swap based on share price”! Where do both the Bina Tak Fikir boys (Azman and Rashdan) learnt from? Must be their Cambridge education. They must have learnt from a new university called Tony Fernandes or Kalimullah University. Bloody stupid. Parliament should question Awang Adek about this bloody deal that is going to kill MAS in the long run.

    Reply
  7. Anak Malaysia

    YB, Thank you for doing a great job. This bloody idiots all must be taught a lessons that they will never forget. I heard from my friend that the top maangement of MAS is going to convert their car park at the Malaysia Airlines Academy into a match veiwing this coming Saturday, a game between QPR and Blackbrun Rovers.
    They have asked the staffs to come and join in the fun.

    YB, can you also ask these people why are they terminating routes like Koashiung, Bandung and I also heard they will be terminating service to Surabaya too. I am not surprised if all MAS profitable route been terminated and then we see that bloody RED Indian taking over it.

    YB, please continue to fight for the right of the 19,000 MAS staffs. We the rakyat will support you. HIDUP YB WEE CK!!!!!! MAMPUS TO THE 6 JAHANAM

    Reply
  8. ThirdDevil

    When Khazanah was set up more than 10 years, the organization was trusted with handling shares of GLC. Khazanah was practically given those shares at cost. The main objective then was to be the catalyst to start the high tech industry in this country. Obviously over the years the objective was changed. Otherwise how could Khazanah invested in higher learning college in China for example. In addition if you look at Khazanah today, their team is consisted of accountants and those graduated from Cambridge. (khazanah offers scholarship on to study at Cambridge) Basically what Azman Mokhtar wanted to do is to ” clone” those employees to be like himself. However since the team is lack of operational experience, the only solutions they can propose is financial restructuring. Sometimes problem in business is due to more than financial : market, technology, products , productivity etc. This is what Khazanah is lacking. In addition, the decision made by Khazanah is done at the ivory tower – KLCC. These decision makers should make themselves available to visit places like Ulu Tembeling etc and meet the ordinary Malaysians. Then they will be a better persons – otherwise all of them will things that the rest of Malaysians were born with silver spoon!

    Reply
  9. Zul

    I fully agree with Third Devil and the others. The problem with Khazanah is Azman Mokhtar, Rashdan and Azman Yahya. They are only good on paper and operational wise ZERO. That why the name BinaFikir is very fitting. Build without using their brains. thats why Khazanah or rather GLCs are having problems after problems. Look at MAS. Three of these so-called intelligent men were involved one way or another but now they are playing with share swap based on share price. Under WAU they talked about Asset un-bundling. All big word but end up with more problems because they are out of touch with the real world or may be they knew what they were doing. Screwing MAS!

    YB should give them a good whacking during the Budget debate so that the Government will know what to do with them. Get the PAC to grill them properly and expose of their nonsense. Share swap based on share price. How stupid can one be! Thre is such a thing call Net Tangible Assets – idiots.

    Reply
  10. Anonymous

    YB

    You guys in the opposition are shown up as ‘devils’ by the party in power from time to time. After reading you take on the issue it may not be a bad idea to give the ‘devil’ a chance at governing and, who knows, we may find out that the ‘devil’ is not that bad afterall.

    Reply
  11. CUNI

    “..the top management of MAS is going to convert their car park at the Malaysia Airlines Academy into a match veiwing this coming Saturday, a game between QPR and Blackbrun Rovers….”

    Now they are turning MAA into an open air sports pub complete with the golden girls as waitresses. Well done Khazanah, another great 1MH achievement.

    Reply
  12. Orang Kebanyakan Yang Benci Ketidaktelusan Dan Penganayaan

    Air Asia is running promo for almost every week…Firefly???MAS???no changed at all…kerjasama???Air Asia sedang KERJAkan MAS…Air Asia ask MAS to terminate MAS profitable routes and do something to gain profit but nothing is happening…Air Asia is still running RED indian business as before…its gaining profit day by day..but not MAS and Firefly…Firefly were killed…i’m surprised when i searched Firefly tickets…its almost RM200++ for every sector…wow…scary…people will definitely (boleh dikatakan terpaksa sebab tak ada pilihan) choose Air Asia now…no choice at all…thanks but no thanks to TF…no competition…YB, please do something…get rid of all the BALACIs…Rakyat sentiasa memerhati…

    Reply
  13. Rosli of Khazanah

    The share swap with no transparency at all. Only people with so-called high education like Azman Mokhtar, Rashdan and Azman Yahya could agree with such dirty deal. No due diligence being carried out.

    The PM must get rid of Azman, Rashdan, Md Nor Md Yusof and Azman Yahya from Khazanah and MAS if we want to see MAS survive well. Replace them with real aviation professionals. this share swap will finish off MAS eventually.

    We in Khazanah know that these people are destroying MAS surely but surely.

    Reply
  14. Rahmat Daud

    YB, boleh kita organize peaceful demo, kat mana-mana. Ahli politik, selain dari BEBAS, tak dibenarkan ambil bahagian.

    Reply
  15. Joan

    In fact, there are 1,001 reasons against the share swap. There is no point in telling numb skulls about it. For a start they have no interest in wanting to save MAS. They are only interested to see MAS going down the drain.

    Tan Sri Azman Mokhtar and Rashdan have no clue about running Khazanah let alone an airline. They should be shot.

    Reply
  16. jamaludin

    These idiots haven’t got a clue what they were doing that’s why they were unable to provide detail of their so-called Collaborative Framework between MAS and AirAsia. This is the trouble with these diots who are heading our GLCs. They should be sacked.

    Reply
  17. kcaj

    YB Wee, a well-thought out, clearly defined national civil aviation policy based on Reason No.7 should have shielded public opinion from the “wayang kulit” played out in the press & supported by “paid” & clueless analysts. Alas, it was conveniently swept under the carpet or worse still, we don’t have any!

    Reply
  18. Anonymous

    YB. Wee Cho Keong

    Saya tak tahu nak komen pasal share swab.Tapi sebagai rakyat biasa saya tak suka “penggabungan” AA dan MAS atas nama apa sekalipun kerana tidak mahu wujudnya monopoli dalam perniagaan perkhidmatan di Malaysia. Contoh paling nyata “ASTRO”, bila dia monopoli, dia boleh buat apa sahaja. Bahan tayangan diulang berpuluh2 kali tapi harga pakej tetap naik. Terima kasih.

    Reply
  19. Anonymous

    These are little games that corporate movers and shakers play.
    Quantum leap to multiply their wealths or to shed liablities.
    We need a big brother to lean on when in trouble.

    Reply

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