9MMAR
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Malaysia Airlines Employees Urge A380 Cancellation

Thu Oct 05, 2006 12:18 am

Will the voice of the Employees' Union being heard? On the other side, Malaysia Airport has equipped KUL with facilities worth millions of Ringgit to serve A380. Will it be just a waste of money? Will there be foreign carriers that will bring their A380 to KUL?


MAS should axe Airbus A380 order says union

Malaysian Airline should cancel an order for six new Airbus A380 superjumbos to save costs, its major trade union said on Oct 4.

The 7,000-strong MH Employees' Union called for the order to be scrapped after Airbus announced another delay to production of the world's largest jetliner and said it would be unable to start delivering the planes on time.

The list price of the A380 is around US$300 million (MYR 1.11 billion).

"It defeats the purpose," said union executive secretary Mustafar Maarof, explaining the airline did not need more planes and should instead optimise use of the current fleet.

"Furthermore, the airline is running low on inflight crew and maintenance personnel due to recent lay-offs," he told Reuters.

An airline spokesman said he had no immediate comment.

MH ordered the A380s several years ago, (through its parent Penerbangan Nasional Berhad) before it began to address its financial problems with a turnaround plan to cut unprofitable routes.

Airbus parent EADS said on Oct 3 that it had pushed back the A380 by another year and issued a new profit warning, infuriating airlines such as top buyer Emirates. The A380 project is now running two years late, due mainly to wiring difficulties.

MH was originally due to take delivery of its first A380s in January 2007. Now, it may have to wait until July 2008, said Chris Eng, analyst at OSK Research.

Eng said the delay could be a blessing in disguise.

"As part of its turnaround plan, this delay may allow MAS more breathing room to sign code shares and consolidate its routes," he said in a research note.

OSK kept its "buy" recommendation on MH stock, which was down 1.2% at MYR 3.42 at 0410 GMT.

Airbus has sold 143 passenger versions of the aircraft to 14 airlines. Singapore Airline, which ordered 19 A380s, is a launch customer. - Reuters
 
9MMAR
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Thu Oct 05, 2006 12:35 am

A newly published related article.


Delivery of MAS' A380s further delayed; earliest in 2009
By Alfean Hardy

Malaysia Airlines (MAS) will not be taking delivery of the first of its six Airbus A380s as earlier scheduled in July 2007, and the earliest possible date now is 2009 after the European Aeronautic Defence and Space (EADS) announced further delays in deliveries.

An Airbus official in Singapore said it has no definitive date as to when MAS would receive its first A380 aircraft after Airbus president and chief executive officer Christian Streiff confirmed on Oct 3 that there would be an average delay of one year in the deliveries of the mega-size aircraft.

The root cause of the delay is the incompatibilities in the development of the concurrent engineering tools to be used for the design of the electrical harnesses installation.

MAS was previously slated to receive its first A380s in July next year. However, Streiff said Airbus will deliver the first aircraft to Singapore Airlines (SIA) in October 2007, with 13 to be delivered to SIA, Qantas Airway and Emirates in 2008, 25 in 2009 and 45 in 2010.

In a joint statement, MAS and its holding company Penerbangan Malaysia Bhd (PMB) said they would continue discussions with Airbus on the A380 aricraft delivery, and would also consider and assess all available alternatives and options.

"We are very disappointed with this further delay and are currently awaiting a clear delivery plan from Airbus," they said.

MAS executive director/chief financial officer Tengku Datuk Azmil Zahruddin said: "The further delay will not impact our Business Turnaround Plan as we will be able to adapt to the changes required."

In an e-mail reply to a query from FinancialDaily , the Airbus official said: “Precise dates are being agreed with our customers and are part of current ongoing discussions. For the time being, and until all discussions are being finalised, we can’t say more.”

He said a total of 58 aircraft have been ordered by customers in Asia. Aside from MAS' six, the other customers are SIA (19), Qantas (12), Thai Airways International (six), and five each for China Southern Airlines and Korean Airlines.

Meanwhile, a Reuters report said Malaysia Airlines System Employees Union (Maseu) has called for the national carrier to scrap the order. Quoting the union's executive secretary Mustafar Maarof, the report said the airline did not need more planes and should use the funds instead to optimise the current fleet.

Shares in EADS fell 9% in early trade on Oct 4 following the latest delay and the issuing of a new profit warning by the company.

Despite the delay in the aircraft delivery, OSK Research said it is maintaining its buy call for MAS shares because the delay could be beneficial to the airline as it consolidates its longer routes into hub-and-spoke systems.

It said Malaysia Airlines had originally planned to use the A380s for its Australia and Europe routes and the delay may allow the carrier to sign code shares and consolidate its routes as part of its turnaround plan before it takes delivery of the large capacity A380.

“We make no changes to our estimates for now as we believe that Malaysia Airlines may compensate for the delay by holding to some of its B747s,” the research house said.
 
XA744
Posts: 630
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Thu Oct 05, 2006 1:09 am

Now, this is some interesting news !

I don´t know, but I tend to agree with the union, granted there are no political interests in their statement.

Taking delivery of the big jet, would only jeopardize all rationalization and restructuring plans at this critical time.

To me, there is no real need to have this machine flying in MH´s fleet now.

Perhaps MH could put prestige aside for a moment !!! Is it possible ???

Best regards

[Edited 2006-10-04 18:14:09]
No matter how you fly...just never get your wings clipped !
 
9MMAR
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Thu Oct 05, 2006 2:28 am

Quoting XA744 (Reply 2):
Perhaps MH could put prestige aside for a moment !!! Is it possible ???

I hope the Malaysian government will be 'business minded' this time.

The 6 A380s' order is not directly under Malaysia Airlines. It was under MH's parent, Penerbangan Malaysia Berhad (PMB) where MH will lease the frame from PMB should the transaction realises.

I really doubt they will scrap the order. KUL has been equipped to serve A380. Who will use it if not MH?
 
VonRichtofen
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Thu Oct 05, 2006 3:55 am

Quoting 9MMAR (Reply 3):
Who will use it if not MH?

Air Asia


Just kidding Big grin
 
jfk777
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Thu Oct 05, 2006 4:59 am

Malaysia just ordered the A380 to "keep up with the jones". It would be better for MAS to have a large fleet of 777 then to have a small fleet of 777, 744 and A380's. Given Mas has a large domestic network of 737, their international airplane should be the 777, the ones they have and new 773ER also. MAS would be wise to have two basic types for their fleet.
 
AirbusA6
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Thu Oct 05, 2006 5:10 am

Internally "Oh S**t, we've got these trophy A380s coming, to keep up with SQ, and don't need them."

then.....

Externally "What's that Mr Airbus? Another delay? Naturally, we are devastated and expect massive compensation!"

Internally "Yes!!!!!!"
it's the bus to stansted (now renamed National Express a6 to ruin my username)
 
m404
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Thu Oct 05, 2006 5:11 am

I would not doubt that the MAS order is one that Airbus has actually expected to be cancelled for the last say, nine months. Using the delays as an excuse, the reality check of earnings potential and debt loads of the carriers themselves will offer a way out of the contracts.

As for Airbus, some production slot openings could very well be a blessing for other delivery dates.

[Edited 2006-10-04 22:13:14]
Less sarcasm and more thought equal better understanding
 
Lumberton
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Thu Oct 05, 2006 5:14 am

Quoting M404 (Reply 7):
As for Airbus, some production slot openings could very well be a blessing for other delivery dates.

Or inspires others to head for the door!
"When all is said and done, more will be said than done".
 
Thrust
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Thu Oct 05, 2006 5:28 am

Yet another possible death knell sounds for the A380.
Fly one thing; Fly it well
 
9MMAR
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Thu Oct 05, 2006 10:02 pm

Quoting AirbusA6 (Reply 6):
we've got these trophy A380s coming, to keep up with SQ, and don't need them

Not quite right, as I believe the frame can be used to serve LHR where MH flies 18 times consistently high load a week. But they may not need as many as 6 frames. MH and SQ are both Skytrax's 5 Star Carriers, meaning to say they are even. I never regard SQ as better than MH.

I mean, both Malaysia Airlines and Malaysia Airport (KUL operator) are both government linked (or owned) companies. I truly believe that when Malaysia Airport spent million of Ringgit to equipped KUL with A380 facilities, it is an indicator that the government (through Malaysia Airlines) will proceed with the purchase, at least for one frame.
 
chrisrad
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Thu Oct 05, 2006 11:29 pm

Quoting XA744 (Reply 2):
To me, there is no real need to have this machine flying in MH´s fleet now.

Perhaps MH could put prestige aside for a moment !!! Is it possible ???

Yes. but will they need them on the KUL-LHR/SYD/MEL routes by 2009, thats quite a while away. So MH expect no increase in traffic in 2 years?
It still amuses that most of MH's failings are to do with major corruption within the airline, yet most people seem to forget this. Fuel prices etc. were all a smoke screen
Welcome aboard Malaysia Airlines! Winner of Best Cabin Staff 2001,2002,2003,2004,2007,2009,2012
 
kappel
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Thu Oct 05, 2006 11:30 pm

Quoting Thrust (Reply 9):
Yet another possible death knell sounds for the A380.

Not really. If EK cancelled it's entire order, that would be a different matter. But these nine frames, while not really good news, will be far from a death knell.

MH would be better off getting the a350 instead anyway, they can probably use the a380 downpayments for the a350. The a359 and a3510 would fit much better in their future IMHO. The a3510 could replace the 744's so they can downsize and decrease CASM at the same time.
L1011,733,734,73G,738,743,744,752,763,772,77W,DC855,DC863,DC930,DC950,MD11,MD88,306,319,320,321,343,346,ARJ85,CR7,E195
 
9MMAR
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Thu Oct 05, 2006 11:58 pm

But isn't the A350 also has a problem of its own? (I am thinking of changing my signature). I am kind of agreed with Jfk777's suggestion.

Quoting Jfk777 (Reply 5):
It would be better for MAS to have a large fleet of 777 then to have a small fleet of 777, 744 and A380's. Given Mas has a large domestic network of 737, their international airplane should be the 777, the ones they have and new 773ER also. MAS would be wise to have two basic types for their fleet.
 
XA744
Posts: 630
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Fri Oct 06, 2006 12:06 am

Quoting Chrisrad (Reply 12):
It still amuses that most of MH's failings are to do with major corruption within the airline, yet most people seem to forget this. Fuel prices etc. were all a smoke screen

Chrisrad, very good point. Have to admit there have been lots of mishandling around MH. Nevertheless, the airline´s quality and standards are truly remarkable.

Best regards
No matter how you fly...just never get your wings clipped !
 
9MMAR
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Fri Oct 06, 2006 12:36 am

Quoting XA744 (Reply 15):
Have to admit there have been lots of mishandling around MH.

Being constantly benchmarking, comparing and pairing itself with SQ, this is one major area where MH is "pale" in comparison. Sad!
 
behramjee
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Fri Oct 06, 2006 1:15 am

MH plan to use the A 380 mainly on its LHR-KUL-SYD and LHR-KUL-MEL routes.

Is there really a need to have a fleet of just 6 A 380s? no...as they mainly ordered it to compete effectively against EK, SQ and EK on the UK-Australia-UK route.

They first need to get their finances in order therefore it would be better if they leased out these A 380s to an interested carrier for 2 years before taking delivery or ask for a full refund which can be used to buy more B 777s or B 787s or B 748s as well as help improve the airline's cash flow.
 
jacobin777
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Fri Oct 06, 2006 1:23 am

Quoting Behramjee (Reply 17):
MH plan to use the A 380 mainly on its LHR-KUL-SYD and LHR-KUL-MEL routes.

Yet another carrier attempting to use the A380 on the Kangaroo route....
"Up the Irons!"
 
willyj
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Fri Oct 06, 2006 8:43 am

Quoting 9MMAR (Reply 10):
Not quite right, as I believe the frame can be used to serve LHR where MH flies 18 times consistently high load a week. But they may not need as many as 6 frames. MH and SQ are both Skytrax's 5 Star Carriers, meaning to say they are even. I never regard SQ as better than MH.

Well KUL-LHR 18 times a week would take up most of those frames, forgetting they also want them for KUL-SYD/MEL.

Service wise MH and SQ are very similar, but something has to be said for frequency and an airline's destinations. In that respect, SQ is superior. MH's service can be the best in the world, but if they don't fly where you want to go, that takes away from their appeal.
 
MAS777
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Sun Oct 08, 2006 7:58 am

Do not forget that MAS' A380 order does also have some political interests both locally and foreign.

MAS needs to maintain its working relationship with Airbus/EADS (or risk becoming more dependent on Boeing) and do not forget that local Malaysian companies are also involved in the manufacture of components to the aircraft.

Personally - this may be a god-send for MAS as this means the airline could well be back in the black by the time the A380s arrive if its turnaround plan continues full-steam.
 
jfk777
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Sun Oct 08, 2006 8:12 am

MAS flying 18 times a week to LHR sounds good, but what are the yields like ? I think MAS fills the plane with lots of low priced traffic. The UK-Australia route is big for MAS but with the financial loss they have, part has to be attributed to the Kangaroo route. I don't buy into the theory MAS looses money and charges premuim prices for the Aussie traffic.
 
9MMAR
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Sun Oct 08, 2006 4:54 pm

Quoting MAS777 (Reply 19):
MAS needs to maintain its working relationship with Airbus/EADS (or risk becoming more dependent on Boeing) and do not forget that local Malaysian companies are also involved in the manufacture of components to the aircraft.

Yet another strong indicator that MH will proceed with the purchase (regardless of how many frames it will end up to).
 
AirbusA6
Posts: 1502
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Mon Oct 09, 2006 2:31 am

Quoting Jfk777 (Reply 20):
MAS flying 18 times a week to LHR sounds good, but what are the yields like ? I think MAS fills the plane with lots of low priced traffic. The UK-Australia route is big for MAS but with the financial loss they have, part has to be attributed to the Kangaroo route. I don't buy into the theory MAS looses money and charges premuim prices for the Aussie traffic.

By routing passengers down under via KUL, Malaysia benefits from the transit tourism. This benefit goes to the city, the country etc. Thus cheap fares on the route benefit the country, but maybe not the airline. Maybe part of the airline's problems...
it's the bus to stansted (now renamed National Express a6 to ruin my username)
 
Econojetter
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Mon Oct 09, 2006 3:00 am

Quoting Jfk777 (Reply 20):
MAS flying 18 times a week to LHR sounds good, but what are the yields like ? I think MAS fills the plane with lots of low priced traffic. The UK-Australia route is big for MAS but with the financial loss

Perhaps not all that good. According to some fairly recent reports / postings elsewhere, LHR is to be reduced to 16x from 18x weekly starting mid-January 2007.
http://www.aeromalaysia.com/forums/viewtopic.php?t=2524
 
9MMAR
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Mon Oct 09, 2006 3:50 am

Quoting Econojetter (Reply 23):
According to some fairly recent reports / postings elsewhere, LHR is to be reduced to 16x from 18x weekly starting mid-January 2007.

That's really bad. I remember one of the reason they withdrawn from MAN is because they want to allocate those UK slots to LHR, making it 3x daily but the plan never realised.
 
mainMAN
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RE: Malaysia Airlines Employees Urge A380 Cancellation

Mon Oct 09, 2006 7:38 am

Quoting 9MMAR (Reply 24):
That's really bad. I remember one of the reason they withdrawn from MAN is because they want to allocate those UK slots to LHR, making it 3x daily but the plan never realised.

Ultimately, the thing about UK - Malaysia services is that KL isn't really a big business and financial hub (like Singapore, London, Hong Kong), and thus yields are always going to be borderline.

There's a lot of VFR and tourist traffic from the UK to Malaysia, and beyond, but that's about it. This is largely the reason why BA stopped flying there, and why MH couldn't quite make MAN-KUL work for them.

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