MAS: National Pride Or National Shame ?.....Reposted!

Hantu Laut

MAS announced another massive loss close to RM1.2 billion for financial year ending December 2013. Story here.

The airline should be destined for the graveyard before more taxpayers money are wasted in propping it up for some stupid national pride. Irresponsible leaders who couldn't care less how the people's money being spent.

Some two years ago, I wrote the article below on MAS. Not missing a heartbeat, the airline remained  beyond hope in spite of the many changes in top management.

Saturday, March 3, 2012

MAS:National Pride Or National Shame?

Hantu Laut

There have been many fatalities in the airline business.

The three most well-known demises of national airlines were Pan Am, Swissair and Sabena of the U.S, Switzerland and Belgium respectively. 

I have had the honour of having flown with all three airlines before they were destined to the graveyard.

One must not have false sense of pride or foolish sentiments when come to running a business. If the business continued to lose money, sell it or close it down. Pouring taxpayer's money into this bottomless pit is completely irresponsible of the government, which eventually would become even more costly to shut down.

The Malaysian taxpayers should not be made to pay money to this sick child just because the government think they are beholden to keep employing those 20,000 grossly overstaffed MAS bumiputra employees and maintain a false and costly national pride.

The government should not be beholden to those good-for-nothing MAS management and employees, but should protect taxpayers money as trustee of the people.

MAS losses were not due to external market forces.It's just incompetence and bad management. Its major losses were due to gross mismanagement arising out of over staffing, overpricing of supplies by sub-contractors, high fuel prices due to poor financial planning and in a nutshell a blundering amateurist management team headed by people who have no knowledge of the aviation industry. MAS has enough business in the air, but excessively high expenditure caused the massive losses.

Its airline core business revenue increased by 2% to RM13.9 billion in 2011 but suffered a massive loss of RM2.52 billion.Higher fuel costs were due to management lack of foresight. A competent management would know how to hedge fuel prices.Since passengers help subsidised fuel cost by paying fuel surcharges, MAS management cannot claim that most of it losses were due to higher fuel costs.

Using the 2011 loss as a yardstick, MAS would have lost 10 Boeing 737-800 in 2011, literally chopping them up for the scrapyard, which hypothetically also means it could have paid the purchase of 10 units of new Boeing 737-800 in cash.Current price of Boeing 737-800 is at US$83-100 million depending on the configuration.

The airline had gone through various management changes over the past decade, yet nothing good had come out of it.

As I have predicted correctly of past management failures, I am still not convinced the new management team put in recently would be able to save the airline.There will be lots of talk but little improvement.

Political interference and corrupt practices are rampant in the airline.Many MAS supply contracts were given to relatives and cronies with highly inflated prices. Remember the RM75 or RM150 per serving of nasi lemak episode not long ago?

Can MAS pay for air crafts due for delivery this year and next? 

They are 5 units A-380, 13 B737-800 and 5 A330-300 awaiting delivery. MAS needs almost RM10 billion for the next two years to pay for aircraft deliveries.

How are they going to pay when they only have RM1.1 cash reserve, which will be exhausted soon to pay for the continuing losses. 

With a severe red balance sheet will the banks lend them money or they may have to go to Santa Clause to get the money, the people's money.

Three things the government can do, forget about national pride, it's a national shame.............sell the damned thing to a private concern, close it down, or chop it up, bit by bit, and feed to the dogs.

MAS, national pride or national shame?

Blast from the past, read here, talk is cheap!