What In The World Is Going On?

Petronas already has enough unused building space at the Twin Towers. KTM also does not need a high flying building. Maybe the REITs( Real Estate Investment Trusts) will be asked to do national service?

Many things in MAS are now being set aside pending the arrival of the new MD Mr Jala from Shell, Sarawak. A lot is expected of Mr Jala who sings and plays the guitar. Recalling his dayak heritage, Mr Jala has suggested a "long house" type management tecnique. This means MAS employees may soon share smoking a native peace pipe or worse eating lunch from a common bowl at the cafeteria!

All of MAS collective agreements have expired and are up for renegotiation with the Union. All salary increments for staff have been postponed pending the arrival pf Mr Jala. However, the pilots have been given a salary increment of 25% even before the arrival of the new MD. The Unions are complaining about this matter.

What will really happen when MAS runs out of cash by June 2006? MAS will most likely go to the Goverment for emergency funds to meet operational costs. This is bad, really bad. MAS has undergone almost everything that a turnaround situation would warrant including restructuring, outsourcing, streamlining, financial reengineering, bla bla bla. The only thing that has not been done yet at MAS is brain surgery on the people who run the airline. Perhaps this is an option the Goverment may want to consider!

Another problem that MAS has to contend with is that the company now reports to Tan Sri Nor Mohamed Yakcop---- the 2nd Finance Minister. If King Midas turned everything to gold with his golden touch, everything Nor Mohamed touched in the past, went bust!

He put Bank Negara into technical bankcrupcy with his Forex deals whish caused RM 17 Billion in losses that are still not understood even by himself, let alone the average Malaysian. After Bank Negara, he worked for Anwar Ibrahim who got him a job at Rashid Hussein Research. Both Rashid Hussein and Anwar Ibrahim went bottoms up, Anwar quite literally.

Then Nor Mohamed became chairman of Abrar which not only went bust but was wound up. During his tenure as Chairman, Abrar bought over Mun Loong Bhd which went bust and became a PN4 company and lost its identity completely. It is now known as Kamdar Singh Textiles. Then Nor Mohamed worked for Tan Sri Ali Abul Hassan who lost his job. After that he worked with Mahathir Mohamed who also stepped down. Now Nor Mohamed works for Pak Lah and has the country's economy in his hands. Just because he is Finance Minister 2 now, can we expect Nor Mohamed to have miraculously developed an ability to avoid disasters? I shudder to say this but shall we wait and see?

The appointment of Mr Jala also shows more short sighted thinking. Why appoint an oilman? The simple reason is because 40% of MAS' operating costs are fuel bills---aviation fuel. It is hoped that Mr Jala's experience as an oilman will help MAS do a better job in buying aviation fuel on a futures basis( future con-tracts). The same futures markets that caused Bank Negara's RM 17 Billion debacle. But the fuel problem is not specific to MAS alone. The whole industry suffers high fuel costs. MAS has other more serious problems which may not be in Mr Jala's domain or job description.

MAS suffers significant waste. For example, the Prime Minister's brother, Ibrahim Abdullah is a shareholder in Skychef-- a joint venture with Lufthansa-- which has taken over the job of MAS Catering. This is a very lucrative deal for Skychef indeed but a bleeder for MAS. Even if the flight to London is half full, Skychef still puts on a full load of food on every flight. At the end of the flight, the extra food is thrown away. MAS has to pay for that wastage! Each meal in a plastic tray costs more than RM25. How is Mr Jala going to deal with that?

Skychef has also negotiated the catering contract in such a way that a full load of mineral water is put on all flights that adds to the airplanes weight and burns more fuel. When the plane returns, any unopened bottles of mineral water are put back on the flight and charged to MAS again! A very neat way for Skychef to milk MAS.

MAS serves salads in its meals, which were made using lettuce grown in Cameron Highlands. Two months ago MAS stopped buying lettuce from Cameron Highlands and opted for very expensive imported lettuce from Australia. No one ( other than certain folks at the purchasing department ) seem to know the reason for this expensive switch.

In Engineering, MAS may have three test pads to check out avionics--- 2 in KL, 1 in Penang. Because all avionics are tested out in KLIA, the test pad in Penang is never used. Each costs over RM 200,000 a piece.

When MAS presented its quaterly results, they carefully avoided any mention of Professional Services. This means "consultants". MAS has employed more than 17 different consultants and are still employing more consultants. There are so many Australian and British consultants that the MAS office in Subang looks like an "orang putih" outfit. One consultant is paid RM5000 per day. Other consultants are paid in excess of RM2 Million per year. Considering that the company's total losses are increasing, no one seems to know just what is the positive impact of these consultants.

The latest edition of this list of consultants is a lady hired from Citibank Singapore who is paid RM 60,000 a month. The headhunters who hunted her down were paid RM 180,000. This lady is in charge of Services-- to handle the outsourcing of MAS support services like IT, Ticketing, Administration etc. Outsourcing has been quite disastrous for MAS too because it has cost the company even more money.

After outsourcing IT, response time to fix computer glitches at the non front line departments have been slowed down ( 2 to 4 days ). Some of these outsourcing contracts are also being eyed by companies related to Directors that sit on the Board of MAS. One of them is the Symphony Group that is controlled by Dato Azman Yahya ( formerly of Danaharta ) who is a board member.

To bring the company around, Munir Majid has asked senior executives at MAS to take voluntary pay cuts up to 30%. This is childish and not even foolish thinking. As a good example, Munir says that he has not taken his acting MD allowance for the past months. MAS folks say Munir's comments are justified because he is not fit to be MD. But Munir's financial loss is consoled by the fact that despite the company making so much losses, he has recently bought an oil painting for over RM1 Million using company funds that hangs in his office. What has financial losses got to do with appreciating art?

The people who know exactly what is wrong with MAS are the rank and file. At meetings with the management they have voiced their opinions but to no avail. The ringgits involved in MAS are huge. Too many hands are in the cookie jar!