Thursday, April 29, 2010

MAS, Why Are You Afraid Of Competition?

Hantu Laut

Competition pushes you to become better.It pushes others to become better.The world has become a better place because of competition.

Competition is good for everyone.It improves quality of products and services.It brings down costs. It gives cheaper alternatives. It increases volume of business. It spares those who are competitive and kill those who are not.Most of all it benefits consumers, people like you and me.

Without competition the world's economy would have stagnated.There wouldn't be any kind of sports, no new inventions, no new technology and absolutely no advancement of the human race.

The breakup of the Soviet Union is proof that communism and monopolistic policy can't survive the competitive world.China, opened its doors to capitalism and the free market economy because they knew without competitiveness they wouldn't survive the world's competitive markets.Anti-trust law introduced in the US and some Western countries was to ensure that competition stays for the benefit of consumers.

Why is it that when the rest of the economically vibrant world are in competitive mode Malaysia regress to outmoded economic practices? Isn't it against the very spirit of NEM (New Economic Model) purveyed by Prime Minister Najib Tun Razak to make this nation competitive.

Why must MAS be shielded from competition that is in collision course with Najib's new economic policy.Isn't the PM involved in the construction and decision making of the economic policy or was it left to the civil servants and political leaders who put a blind eye to fair trade practices simply to protect themselves.

At whose feet the ball stops? The PM,the Cabinet or some nitwitted minister?

Let me tell you why I agree with Air Asia here.

Before the advent of Air Asia we have no choice but to travel all domestic routes with MAS.The airline has the monopoly and screwed its costumers with high fares and bad ground services.Delays were commonplace those days and there was nothing one can do as there were no other choice.In spite of being given monopoly MAS kept saying they were losing money as they have to subsidise the fare.That is now proven untrue.How come, now in stiff competition with Air Asia they are making money on this sector?

Air Asia came on the scene with its no frills and cheap air fare that gave air travel a new meaning....affordable fare for the common people and hence its slogan 'Now Everyone Can Fly'.
The airline was transformed from a one plane airline to become the most successful rag to riches story and a household name in Asia, true to it name.The rest is history.

On the other hand, MAS, the spoon fed sick baby, in spite government protection, was sliding down the hill gathering mosses and losses that needed government bailout with massive injection of fresh capital and the appointment of an oil man to lead the company.

The first thing the new management did was to go on asset stripping exercise, selling its building and all aircraft to a new GLC company with a lease back agreement. The exercise cleaned up the balance sheet giving the impression that MAS has become a profitable concern in its first year under the new management.A closer look at the balance sheet in the first year revealed that the profits were not from its operations but extraordinary profits from sales of assets.

I started using Air Asia about 5 years ago but since MAS introduced its cheap fare I have switched back to MAS and have been using it for the past one year.

AIR-ASIA
Depart
Kota Kinabalu(BKI) to Kuala Lumpur LCCT(KUL)
Wed 12 May 2010
0725 0955

193.00 MYR1 Guest @ 193.00
6.00 MYR Airport Taxes and Fees
Return
Kuala Lumpur LCCT(KUL) to Kota Kinabalu(BKI)
Sun 16 May 2010
0650 0920

193.00 MYR1 Guest @ 193.00
6.00 MYR Airport Taxes and Fees

398.00 MYRTotal


MAS


  • Kuala Lumpur to Kota Kinabalu ECONOMY
  • From MYR399ReturnBook now
Book: 11 Feb 10 - 30 Jun 10 Depart: 18 Feb 10 - 31 Dec

Both airlines offered very competitive fares as shown above but MAS has the added attraction of full frills services.

What Azran Osman said about MAS being profitable in the domestic and Asean sector is true.MAS, introduced the low fare to hit Air Asia below the belt.I am sure there are many like me who switched back to MAS, paying low fare and found the benefits of full frills.... free baggage allowance and free meal.It was competition that gave MAS that increased volume of business and profitability, not the monopoly that it is used to in the past.

MAS like most other GLCs such as TMNet, Proton, Tenaga and so forth are spoiled by government protection and monopoly.It kills enthusiasm, loses the competitive edge and makes those managing the company lazy.

TMNet, the sole fixed line Internet provider has not improved its services much since the Internet first introduced to this country, selling broadband that ain't broadband, fleecing costumers and not giving what they paid for.Its broadband speed and coverage is a shame.

Countries like South Korea which used to be behind us in the seventies now has the highest broadband coverage per capita and the fastest connection, at an astounding 14.6 megabits per second, better than many areas in the US.

Compare to Malaysia which has a bigger land mass, tiny Singapore has four Internet Service Providers namely Starhub, Singnet,M1 and Pacnet and some can deliver up to 100 Mbit/s.

I need not go into more details the misfortunes of Malaysians because of our government fear of competition....as they say if you can't stand the heat get out of the kitchen.Government has no business to be in business if they can't run it properly and without protection.

Many of us are victims of false promises and misrepresentation. TmNet Streamyx fastest package is the Streamyx Corporate ADSL promising 2 Mb/sec.You have to pay a whopping RM1188 per month.Can it deliver the speed?

I have Streamyx Basic at 1 Mb/sec and it can hardly deliver half the speed.If any of you have bought so-called Celcom 3G wireless broadband you might consider throwing it in the rubbish bin.I have done exactly that and will be informing Celcom to cancel the service.It's a pain in the ass and money for nothing.

Why are the government giving protection to all these companies run by incompetent and non-competitive minded people who can't spell the word competition let alone pronounce it.

So, who flies to Pyongyang, Peshawar in Pakistan, Dili in East Timor, Almaty in Kazakhstan, Mahe in the Seychelles and Darwin, Australia?

Here, is a typical run of the mill crappy response from a politician.

I think it's about time Najib tells his boys what he promised the people.

As Mahathir says he doesn't need protection from the government on the controversial book written about him.

MAS, should select the men between the boys, tell the government it doesn't need protection.

6 comments:

donplaypuks® said...

There appears to be a culture of fearing to compete in case they fail.

This is made worse when right wing elements in Govt and NGO's the like of Perkasa "take ownership" of MAS and deem it too important to fail.

They need to cut the apron strings after securing MAS with adequate capital and finances and putting in place the best managers they can find in the country. Idris Jala was not half bad. If only they are given him a free hand and more time!

In theory, if Air Asia can succeed with a local boy as CEO, there's no reason why MAS should not.

dpp
we are all of 1 race, the Human Race

Piurple Haze said...

I agree with DPP.

Malaysians can run the show as long as they are not handcuffed. It is a fact that MAS international routes are profitable as a whole and this has been subsidising the domestic routes.

The whole Malaysian domestic transportation sector needs to be revamped from top to bottom to identify and implement need-based solutions.

Anonymous said...

Dear Hantulaut,

I think you better get your facts right first. Yes, MAS was losing money.....it had to fly to non-profitable routes like Bounes Aires. I was once on board that flight and there was only 4 pax on board. So you are telling me, they made money?

Consider that they had to fly RAS (Regional Air Services) in Sabah & Sarawak. Yes, it was subsidies by MAS. The loss is overall.

Air Asia at the time of Pak Lah....demanded that they be given the RAS, remember Asian xpress, then what, they took the Govt. money, force MAS to take back the routes and some F50 that was given to them could not be used anymore. So MAS through MAS Wings had to buy ATRs to replace them. So who is doing the daylight robbery? Is it MAS?

Then Air Asia "force" the govt through Pak Lah to liberalise the most lucrative route KL-SIN. Who lost out? Not MAS but Malaysia. Singapore carriers (including low fares)could fly direct and more frequent to KUL, PEN, KCH, KK all because of ONE (1) man's greed.

Mind you even the blind could run an airline given the fact that all the infrastructures are given and they bought Air Asia from HICOM for only RM1. Why didn't they buy Pelangi Air, which was also up for sale at that time.

Remember that the setting up of MAS was NOT to run as an airline per se. the 1st objective was National Intergration. That was why at the time of split of MSA, SIA took the routes and the planes. MAS had the F27, some b737 only.

Then all the years we had DCA to run the airports. MAS was made to bear the cost of having push trucks, buses to ferry passengers to the terminals, etc. Even the anti-slipping mat at all exit doors for Terminal 3 Subang was borne by MAS.

So now you tell me how to make profit when all those things which in other parts of the world is borne by the airport operators.

Then the issue of parking charges. Air Asia still owe MAHB. MAS had to pay in full. Air Asia got some millions back for paying "overdue" payments after MAHB had to beg them to pay.

So just ask Air Asia to fly to Zimbabwe, Nairobi, Timbaktu and see what they say. Next time, please don't give me the crap like what you have wrote.....

If everyone could fly, God would have given us wings, not Air Asia.

Hantu Laut said...

Anonymous,

I don't know what you are reading and don't know what you are talking about and I don't usually argue with people who are off the subject.

eddy said...

1. Indeed Air Asia have changed the airline landscape, MAS definitely could do with the competition. The manner in which Air Asia seeks to compete cannot be questioned as long as it is legal, it is after all a private entity which must make money for its share holders.

2. Ya Bro and TM needs the competition, its broad band which is not actually broadband service is horrible. Maybe they need a real competitor like Tony Fernandes to push them out of their comfort zone and shortchanging us the rakyat all the time.

Real 24/7 Broadband Service For All..

Anonymous said...

Yeah, I do agree with Anonymous. Hantulaut, Anonymous is not off the subject because he understand how the airline works or shall I say the business ethics!. It's not all about competition but to provide people with choices too. What AirAsia is doing now is totally robbing of other people's effort and investment. Like what MAS MD said, "if AirAsia is really serious about providing customers with choices, they should fly to a new destinations. They are given (by the Govt) 34 new destinations." Unquote. So, what are you waiting for AirAsia? Start investing and expand the market in those new destinations so that after you have start making profit, MAS will come in to compete with you. Would you like that? Only robbers will do that!! AirAsia are only interested in MAS destinations because it is a cheap way for them to make profit. They have tried once on Abu Dhabi but they pulled away because they REALISED it take a lot of effort and money to develop a new destination. You want competition? Can, no problem but AirAsia will have to start developing new destinations too and compete with MAS. A simple business ethics.