Kappel From Suriname, joined Jul 2005, 3533 posts, RR: 16
Reply 1, posted (8 years 11 months 2 weeks ago) and read 4029 times:
Holy smoke, that's huge!! I didn't know they were going from 96 to 19 domestic routes... amazing. It almost make those cuts by US carriers pale in comaprison. Have they found taker for the aircraft they will be getting rid of (744 and 734)? How many employees does MAS currently have?
Lumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 3, posted (8 years 11 months 1 week 6 days 23 hours ago) and read 3934 times:
While I laud the carrier's attempts to return to profitability, this won't be easy at all. The layoffs are sure to bring job actions, maybe a strike. Will the government of Malaysia let the carrier have a "free hand" to restructure when the press goes decidedly negative? The local press is bound to spin this as "gutting" the national carrier. This is just the start of a long, ugly process for MH.
"When all is said and done, more will be said than done".
Kappel From Suriname, joined Jul 2005, 3533 posts, RR: 16
Reply 4, posted (8 years 11 months 1 week 6 days 22 hours ago) and read 3913 times:
Quoting LifelinerOne (Reply 2): Is Malaysia owned by the government? How are the government going to make sure remote places in Malaysia will still be accessible? Or is Air Asia becoming the new domestic airline?
All your questions are answered in the article, in short: yes by 69%, Air Asia, yes, even though MH will keep 19 domestic routes.
Lapper From United Kingdom, joined Mar 2002, 1580 posts, RR: 7
Reply 7, posted (8 years 11 months 1 week 6 days 18 hours ago) and read 3741 times:
I hope this worls for them. I remember years ago GF had to go through a massive route reduction as they were losing money too. They seem to have turned things around. I hope MH does too. I flew them 2 years ago, fantastic carrier.
My understanding of the decision on the Malaysian domestic air routes is as follows (contains additional info from news sources other than the above link):
- Govt decision on the rationalisation of the domestic air routes; the new plan may start to take effect by Aug 1
- Under the new plan, Malaysia Airlines (MH) will serve 19 domestic trunk routes; AirAsia (AK) will also compete on these routes
- In addition, AK gets to serve 96 secondary domestic routes
- Neither MH nor AK will receive govt subsidies for the abovementioned routes once the new plan is in full effect; currently, the profit/loss responsibility for MH's domestic operations is fully borne by the govt
- Separately, the rural air routes will be opd by AK under govt subsidy; these are most probably the DHC6 Twin Otter services and a small handful of F50 routes
- There will be some form of interlining between AK and MH to ensure connectivity, e.g. from AK-only stations to MH-operated international flights
- MH will not be allowed to charge fares below the full economy fare level on the 19 domestic trunk routes (hmmm... interesting, I wonder how they will determine the level); other than that, MH and AK will have full control over pricing, choice of equipment, frequencies etc.
- AK will sign a service contract with MH's maintenance/engineering dept
- AK may absorb some of MH's fleet and staff
- MH plans to offer some sort of voluntary separation scheme to 6500 employees; it is still unclear who will be footing that bill. I have read reports hinting that the govt will bear that cost along with some other costs associated with the transition of MH's domestic operations to the new plan
Lufthansa747 From Philippines, joined May 1999, 3201 posts, RR: 33
Reply 9, posted (8 years 11 months 1 week 6 days 16 hours ago) and read 3626 times:
Quoting Econojetter (Reply 8): MH will not be allowed to charge fares below the full economy fare level on the 19 domestic trunk routes (hmmm... interesting, I wonder how they will determine the level)
Hahaha, I guess no more MYR 80 MH flights KUL-JHB.
Not that I would have taken that ever again consirering the dickheads at Singapore immigration. (Cost was a fraction of a direct KUL-SIN)
Kulatict From United States of America, joined Mar 2005, 120 posts, RR: 0
Reply 10, posted (8 years 11 months 1 week 6 days 10 hours ago) and read 3470 times:
Thank GOD!!!!!.. it's about freaking time MH really do something about the unnecessary personnel & unprofitable routes... although one could be sorry for those got lay-off but i'm sure the government will compensate them in one way or another... the other day as i was reading the local Chinese newspaper, the head of the 'labour-union' threatened industrial action if there's any job reduction at MH.... i guess eliminating excess unproductive workers are the way to resotre profitability... i mean MH has way more staff than CX & SQ but at the fraction of the competitors' capacity...
When I was in Malaysia last year, my local rep was telling me of the employment laws there. The native Malays have a "protected" status. Maybe a local could help explain this better. How will 6500 layoffs occur under that kind of system?
Econojetter From Malaysia, joined May 2001, 430 posts, RR: 5
Reply 13, posted (8 years 11 months 1 week 5 days 17 hours ago) and read 3098 times:
Quoting Terryb99 (Reply 12): When I was in Malaysia last year, my local rep was telling me of the employment laws there. The native Malays have a "protected" status. Maybe a local could help explain this better. How will 6500 layoffs occur under that kind of system?
The government is predominantly Malay. The decision on the domestic routes was made by the government. The airline (MAS) is also government-owned; its CEO was selected by the government. The government has decided now that it cannot sustain MAS at this rate and will not allow it to fail. So if the CEO declares that the airline will run into the ground soon unless the workforce is reduced, it is likely that the government will back the decision. I guess redundant employees will be offered a separation payoff and suspect that most of this will be paid for by the government. I wonder if we will ever know how much it cost to get 6500 employees to leave.
As long as the government backs the CEO's decision, the employees/unions (Malay or not) have little say. I found it interesting that ATWonline had a brief report earlier this week about industrial action brewing at MAS. I think all we will see are some angry words and perhaps even a couple of aircraft with cut wires. In Malaysia, one simply does not face off with the government in the open.
More details here in reports from The Star (Malaysian daily):
DEVILFISH From Philippines, joined Jan 2006, 5037 posts, RR: 1
Reply 14, posted (8 years 11 months 1 week 5 days 16 hours ago) and read 3045 times:
Perhaps the Indian carriers actively recruiting staff could take in those people who would not be absorbed by Air Asia? This could be a win-win situation, except those who would be laid-off might not want to be based abroad.
MAS777 From United Kingdom, joined Jul 1999, 2937 posts, RR: 6
Reply 15, posted (8 years 11 months 1 week 5 days 11 hours ago) and read 2952 times:
Quoting Kulatict (Reply 10): it's about freaking time MH really do something about the unnecessary personnel
This is a major problem with MAS - will the culling of 6,500 employees actually help to solve any of its problems or will it mean its highly skilled staff be lost whilst leaving much 'deadwood' behind to continue running the airline to the ground?
Quoting Terryb99 (Reply 12): How will 6500 layoffs occur under that kind of system