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LAXintl
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MAS Begins To Outline Restructuring Plans

Fri Aug 29, 2014 8:37 pm

Khazanah Nasional, the investment arm of the Malaysian government said its planning a USD $1.9 billion bailout of the airline under "strict conditions".

The government said it would carry out the restructuring by creating a new company with a “right-sized work force and work practices and contracts.”

To this end the company would begin cutting its work force by 6,000 positions, about 1/3 of its work force. No details on expected capacity cuts, however its believed loss making routes to Europe and China would be dropped.

The plan also calls for the airline to move its headquarters to KLIA and sell its current city center facilities. Current CEO Ahmad Jauhari Yahya would also be replaced once his current contract expires in July 2015.

The airline would also seek a new "branding strategy" though Khazanah said it is recommending the carrier keep the Malaysia Airlines name.

Company would be delisted from the Kuala Lumpur exchange by the end of 2014, with Khazanah looking at a relisting in 2018 or 2019 after the company returns to solid profitability.


A few stories:

Malaysia Airlines to Cut Work Force and Get Almost $2 Billion Bailout
http://www.nytimes.com/2014/08/30/bu...lines-to-cut-30-of-work-force.html

Malaysia Airlines to Eliminate 6,000 Jobs in Turnaround Effort
http://goo.gl/9j5v5h

Malaysia Airlines slashes jobs, routes in overhaul
http://koin.com/2014/08/29/malaysian...s-cuts-nearly-13-of-its-workforce/

=

Personally having had business dealings with MAS, I hope they indeed are serious and use this opportunity for a massive top to bottom overhaul.
There exist lots of opportunity with MAS, but the company is so seriously hobbled with so many issues they truly need a major house cleaning and corporate reset with appropriate replacement management and systems put into place.
It takes a lot more to run a successful enterprise than simply buying modern shinny planes.
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mercure1
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RE: MAS Begins To Outline Restructuring Plans

Fri Aug 29, 2014 9:13 pm

Be interesting to see what routes / fleet get removed.

Does A380 stick around?
Do they continue double daily at place like LHR, or do they sell one valuable LHR slot?
How about other Europe markets - AMS, CDG, FRA, IST, etc.
Domestic network?

I think MAS are loosing money both from the bottom against folks like Air Asia and Malindo, and on top against SQ, CX, ME3 etc. Though spot to be in when your market is being eaten from all over.

Lets discuss.
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LAXintl
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RE: MAS Begins To Outline Restructuring Plans

Fri Aug 29, 2014 10:34 pm

Yes I think some pragmatic decisions need to be made.

A380 -- I have never been convinced they needed the model to begin with, and its likely its way too much capacity and a big financial burden these days. Bigger question might be, even if it wanted to exit the A380, how, and to whom?

For LHR, I'm sure one of the slot pairs could fetch some good money. Maybe can cut a deal with OW partner BA for it to return to KUL itself and help maintain the connectivity.

Other things - LAX its last US route has already been cut. The 777 fleet was planned for lease returns anyhow, so that can be sped up I suppose.

Ultimately looks like MAS could be left primarily with a 737NG and A333 fleet. Might not be a bad combo if company focuses primarily on Asia/Oceania marketplace.
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qfvhoqa
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RE: MAS Begins To Outline Restructuring Plans

Sat Aug 30, 2014 1:23 am

MH has restructured itself before with minimal cost savings. I recall reading that it is politically difficult within Malaysia for MH to cut labour costs, as the government ownership sees it being used as a means for jobs creation. This time with the circumstance MH now finds itself in I hope the necessary changes can be made.

I don't agree with the premise in some of the new articles that by cutting staff levels by 30% means that flights will be cut by the same amount. IMO MH is overstaffed for the routes flown so they may not need to cut as much as 30% of flights.

LHR can reduce to once daily to enable the second slot pair to be sold (leased?), CDG/FRA/IST can all go with DXB replaced by DOH for onward QR connections.
KMG/XMN/PEK/CAN should probably also be dropped along with one of the PVG flights. Route the remaining Chinese traffic via CX at HKG.
Australia is suffering from overcapacity to SE Asia, so MH can reduce frequencies back to 2x daily SYD/MEL (maybe once daily even). Drop ADL/DRW, BNE to 5x weekly, PER to daily 738.
Domestic Malaysian flights can mostly be handed to Firefly with occasional MH rotations to feed long haul flights. Give Firefly some 738s for regional leisure routes like HKT/DPS.

Ideally MH would be able to offload their A380s given their difficulty in filling them, but I don't know if they are leased or owned. Should the A380s stay in the fleet (more than likely they will) then F needs to go. An all-Y lower deck would give them ~77 more seats if they mirror the EK layout. Though this would give MH a total Y seat count of 497 which would be very hard to fill outside of Hajj. MH could use the upper deck Y cabin for Y+. With 6 A380s and possibly only LHR remaining in Europe, MH could send one to DOH to feed QR and another to HKG to feed CX.
 
ben175
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RE: MAS Begins To Outline Restructuring Plans

Sat Aug 30, 2014 2:18 am

Quoting qfvhoqa (Reply 3):
PER to daily 738.

PER actually does quite well, and is currently an 11-12 x weekly 333 service. I could see a reduction to a daily 333, but not a single 738 flight. BKI might go however.
 
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RE: MAS Begins To Outline Restructuring Plans

Sat Aug 30, 2014 2:27 am

A slight degree of self promotion and apologies to the Aus Av readers for duplication, but I suggested in the Aust Av thread a couple of days ago that MH could be QF's IB. Refer to link below. I thought perhaps MH interested people might have an opinion.

Australian Aviation Thread Part 104 (by 777ER Aug 19 2014 in Civil Aviation)
 
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RE: MAS Begins To Outline Restructuring Plans

Sat Aug 30, 2014 2:34 am

Quoting qfvhoqa (Reply 3):
Ideally MH would be able to offload their A380s given their difficulty in filling them, but I don't know if they are leased or owned.

The A380's all appeared to be owned as well as most of the 777's which average about 14 years. I think trying to find buyers for the A380's would be extremely difficult. It will be interesting to see what they do.
 
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LAXintl
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RE: MAS Begins To Outline Restructuring Plans

Sat Aug 30, 2014 2:52 am

The entire 777 fleet is leased and per CEO the leases all roll of by 2015/2016.

They have already commenced returns, IIRC one late last year, and have parked up 2 additional frames pending return to avoid heavy maintenance checks.
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PHX787
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RE: MAS Begins To Outline Restructuring Plans

Sat Aug 30, 2014 3:20 am

Quoting LAXintl (Thread starter):
The airline would also seek a new "branding strategy" though Khazanah said it is recommending the carrier keep the Malaysia Airlines name.

Bad idea. Get rid of the name. Without a name change they'll never rebuild their East Asia market.

Quoting LAXintl (Reply 2):
A380 -- I have never been convinced they needed the model to begin with, and its likely its way too much capacity and a big financial burden these days. Bigger question might be, even if it wanted to exit the A380, how, and to whom?

Those A380s are only good for the NRT-LAX route which is continually dropping yields and pax.
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777Jet
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RE: MAS Begins To Outline Restructuring Plans

Sat Aug 30, 2014 3:28 am

I heard on the BBC news last night that 200 MH flight attendants have resigned in the past 6 months. That number is apparently *significantly* higher than normal. The comment was made in regards to passengers avoiding MH due to being 'spooked' - they basically said that some of the flights attendants resigned because they were also spooked after the past two tragedies...
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RE: MAS Begins To Outline Restructuring Plans

Sat Aug 30, 2014 3:48 am

This may be the best possible scenario for MAS. It gives them the ok to make major cuts to money losing routes, payroll, overstaffing, ending up with a less diverse fleet reducing costs so can focus on where they can make the most money (or the government lose the least).

What happened to MAS is such an exceptional set of circumstances and coincidence one could never expect that it not cause severe damage to the airline. The missile attack on MH 17 could have happened to any of several a/c in the region, they just happened to be in the wrong place at the wrong time although on an established route at a recommended altitude level. That we still have no understanding how or where the wreckage from MH lost several months ago is a much bigger problem due to its continuing mystery, the limited information we do have publicly and lack of debris.
 
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RE: MAS Begins To Outline Restructuring Plans

Sat Aug 30, 2014 8:23 am

I don't think they will loose their double daily LHR service because from what I've seen and heard they are near enough always full. MAS had already slated for a replacement to be found in 2014 for the 777 fleet but I don't know if this is one of their top priorities now so maybe they will return the aircraft or extend the lease because they won't really be in a position to buy new aircraft. I think they will have to loose some European routes maybe only keeping most popular ones and then focusing more on Asia and Oceania.
 
seat38a
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RE: MAS Begins To Outline Restructuring Plans

Sat Aug 30, 2014 3:25 pm

So its a bankruptcy without really calling it that? A new company is setup and the old is skuttled.
 
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RE: MAS Begins To Outline Restructuring Plans

Sat Aug 30, 2014 7:57 pm

The MAS brand is seriously damaged. The flight attendants resigned primarily due to family concerns about their safety--they loved their jobs and were very proud to work for MAS but I cannot blame them for being spooked.

Perhaps combining them with another national carrier like SQ or Thai? But there is a lot of national pride at stake there, too.
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RE: MAS Begins To Outline Restructuring Plans

Sat Aug 30, 2014 8:06 pm

I think, that in order to compete with local airlines MH cannot afford to get rid of their A380s... Their 777s offer a very inferior product compared to the likes of SQ and TG...
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LAXintl
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RE: MAS Begins To Outline Restructuring Plans

Tue Sep 02, 2014 2:40 am

Hello All -

I am in receipt of the restructuring plan documents for MAS.

Makes for some interest reading.

Basically plan is broken down into 4 primary subject areas with 12 distinctive"features", or findings that will be applied.

The 4 areas are;
# Governance and Financial Framework
# Operating Business Model
# Leadership and Human Capital
# Regulatory and Enabling Legal Environment.


The 12 main "features" are below. I've added in some brief commentary on each one from the document.

1) Creation of a new legal entity (“NewCo”) to house New MAS, Delist and Relist
o Khazanah takes full control by late 2014 and delist company. NewCo created by July 2015 with restructured assets. Seek to achieve profitability by 2017, relist in 2019.

2) Funding of up to RM6 billion
o Staggered funding made available over 3-year period subject to fulfilment of restructuring targets. Will pursue debt-equity swaps for participants.

3) Reset the operating business model through a more regionally focused network, lower cost structure, and greater focus on revenue yield management
o Rapid reset on competitive cost position.
o Malaysia home market increasingly price sensitive leisure markets with traveler preference for efficiency, convenience and price versus product.
o Reset network to where MAS "can win" using commercial criteria. Build scale on routes where Malaysia is primary O&D market versus transit point. Secure global connectivity through oneworld and other commercial alliances
o Redesign scheduling of hub to increase operational efficiency, fleet utilization and remaining connectivity
o Adjust fleet to better fit MAS network and markets - move to smaller aircraft, retirements, and adding seats to reduce unit cost.
o Renewed focus on revenue management to recover significant disadvantage to full service peers. Raise unit revenue cost 15%.
o Revamped loyalty program, unbundling of fares, ancillary products and services

4) Move headquarters from Subang to KLIA
o Streamline ops currently siloes across differing locations under single roof near its core operations base

5) Strengthen assurance, integrity and safety functions
o Strengthen key control and operational systems

6) Review and, where appropriate, renegotiate supply contracts
o NewCo seek to reset and renegotiate supply and other contracts based on current market norms and benchmarks

7) Strengthen Leadership
o Transition period to NewCo will see changes to leadership executed in orderly fashion. Top-500 position holders will reviewed.

8) Right-size the workforce
o NewCo will require workforce of approx 14,000 down from present 20,000. MAS currently significantly lags industry peers in employee productivity (41% worse then CX, 69% worse than SQ). Industry benchmarking indicated to approx 30% over staffing.

9) Strengthen industrial relations and internal alignment
o Inform MAS staff of new business model and plan allowing parties to take ownership of right sizing process and productivity improvement initiatives.

10) Reskilling, job creation, and redeployment
o Khazanah will undertake active program of sourcing positions for existing MAS employees and will develop reskilling center to assist those transitioning to other fields and industries

11) Appropriate Government support on key initiatives
o Enactment of parliamentary "MAS Act" to facilitate comprehensive and timely restructuring process
o Establishment of national Aviation Commission with regulatory capabilities to the industry and bring Malaysia inline with international best practices

12) Continuous communication and stakeholder engagement
o Enable support and engagement of public, press and other stakeholders given national scale and scope of restructuring

=
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PHX787
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RE: MAS Begins To Outline Restructuring Plans

Tue Sep 02, 2014 3:39 am

Quoting LAXintl (Reply 15):
I am in receipt of the restructuring plan documents for MAS.

Please PM me the line of work you are in because you're always the first to know a LOT of things and I would like to get into that line of work myself   

Quoting LAXintl (Reply 15):
o Staggered funding made available over 3-year period subject to fulfilment of restructuring targets. Will pursue debt-equity swaps for participants.

That 6bil in Malaysian currency...what's that in US$?

Quoting LAXintl (Reply 15):
4) Move headquarters from Subang to KLIA

Good idea.

Quoting LAXintl (Reply 15):
o Reset network to where MAS "can win" using commercial criteria. Build scale on routes where Malaysia is primary O&D market versus transit point. Secure global connectivity through oneworld and other commercial alliances
o Redesign scheduling of hub to increase operational efficiency, fleet utilization and remaining connectivity
o Adjust fleet to better fit MAS network and markets - move to smaller aircraft, retirements, and adding seats to reduce unit cost.

These are things airlines do every fiscal year. I don't see this as a major change. But it does make me think the A380's days are numbered.

Quoting LAXintl (Reply 15):
8) Right-size the workforce

Already announced, if I'm not mistaken.
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spud757
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RE: MAS Begins To Outline Restructuring Plans

Tue Sep 02, 2014 7:15 am

Could we see BA work with MH on LHR-KUL? A code share on MH metal or even some flights also operated on BA metal, with code shares on points in Australia, Malaysia and Indonesia? Would BA switch it's service to SYD via SIN to via KUL to take advantage of MH regional connections? BA already operates a SIN terminating service, which I envisage would stay to serve that important financial market, but the onward service could switch to via KUL now that the BA-QF JV has ended.

MH could code share on BA's UK / Eire / Western Europe network; if CDG is dropped by MH then BA could offer connections to the French market over LHR.

If QF were to announce a formal relationship with MH, to use KUL to strengthen its South / SE Asia coverage, that could see a nice OW hub operating. QF wouldn't be able to co-operate on west bound MH services due to the relationship it has with EK, but nothing to stop regional Asia cooperation.

Throw QR into the mix, MH could really benefit from the strengths of the alliance whilst at the same time offering value back to the likes of BA, QR and QF.

Not sure a relationship with CX would work. Is there scope for MH / JL to work together. Now that MH has dropped LAX, could JL offer MH connections east, across the pacific, to west coast USA?

I wish MH all the very best. Great airline to fly with.
 
joeytaffy93
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RE: MAS Begins To Outline Restructuring Plans

Tue Sep 02, 2014 7:22 am

Quoting PHX787 (Reply 16):
That 6bil in Malaysian currency...what's that in US$?

Approximately $1.9 million I think. Could be wrong though..

Do we know if MH will be dropping AMS and LHR?
 
airpearl
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RE: MAS Begins To Outline Restructuring Plans

Tue Sep 02, 2014 9:51 am

Quoting JoeyTaffy93 (Reply 18):
Approximately $1.9 million I think. Could be wrong though..

It's US$1.9 bn.
 
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allrite
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RE: MAS Begins To Outline Restructuring Plans

Tue Sep 02, 2014 10:38 am

Quoting LAXintl (Reply 15):
4) Move headquarters from Subang to KLIA
o Streamline ops currently siloes across differing locations under single roof near its core operations base

Is one of the reasons for the split that KLIA is way out of KL and there is staff (and likely management) resistance to moving/commuting there? The expressway is likely to be expensive (in Malaysian terms), judging from reports I've heard of its usage, as is the fast passenger train, along with the hassle of getting to Sentral in the first place.

Quoting LAXintl (Reply 15):
o Malaysia home market increasingly price sensitive leisure markets with traveler preference for efficiency, convenience and price versus product.
o Reset network to where MAS "can win" using commercial criteria. Build scale on routes where Malaysia is primary O&D market versus transit point. Secure global connectivity through oneworld and other commercial alliances

Perhaps AirAsia is the real national airline of Malaysia now. Once you remove some of the small turboprop community operations in Sabah and Sarawak (MASWings), what is MH's role now? You can get around most of Malaysia and the SE Asian region with AirAsia without too much hassle. What kind of premium market exists domestically and short haul?

I could see potential for the following:

Invert the current low cost subsidiary model of the region (Qantas/Jetstar, Singapore Airlines/Scoot/Tiger) and have a premium subsidiary of a LCC. MH, either as a subsidiary or as a partner of AirAsia provides limited premium short and long haul services, but only on a few select routes. AirAsia can act as a feeder for those routes with its extensive short haul network. This premium traffic may be partly sustained by feed from OneWorld and other partner airlines.

One thing to keep in mind about Malaysia (and Indonesia) is that is a Muslim majority country, so that may shape future tourism and traffic in a way not true of other countries in the Eastern Asian region.
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spud757
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RE: MAS Begins To Outline Restructuring Plans

Tue Sep 02, 2014 10:39 am

MH could serve AMS, CDG etc via LHR, with feed from OW partner, BA. Involves very short sector back tracking. Surely that'd help with loads on the double daily LHR A380.

On AMS they code stare with KL, but KL has its own KUL service. Is there space for both KL and MH metal on this route?

Flew MAN-LHR-KUL (MH3) and KUL-AMS-MAN (MH16) in the last couple of weeks. In Y both flights full. In J out of LHR (A380), virtually full and returning via AMS it was full (777). F was light with 2 pax.

Don't see the LHR flight being dropped; MH has no direct competition from LHR, unless BA makes a KUL comeback, but then I'd hope for cooperation with MH. Depending on the continued relationship with KL, as Skyteam member, then could MH continue to serve both AMS and LHR?

Expecting to see CDG and FRA axed.
 
bastew
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RE: MAS Begins To Outline Restructuring Plans

Tue Sep 02, 2014 10:54 am

I doubt we will see BA re-route LHR-SIN-SYD via KUL. The route has been one of BA's best performers since the end of the JSA with Qantas.
 
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mercure1
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RE: MAS Begins To Outline Restructuring Plans

Tue Sep 02, 2014 2:54 pm

Quoting LAXintl (Reply 15):
I am in receipt of the restructuring plan documents for MAS.
Makes for some interest reading.

Thanks LAX for the details.

Quoting LAXintl (Reply 15):
1) Creation of a new legal entity (“NewCo”) to house New MAS, Delist and Relist

Alitalia style. Dump the debts and problems in old shell and start with new clean enterprise.

Quoting LAXintl (Reply 15):
3) Reset the operating business model through a more regionally focused network, lower cost structure, and greater focus on revenue yield management

So longhaul is going to look smaller with new focus on regional network.

Quoting LAXintl (Reply 15):
o Malaysia home market increasingly price sensitive leisure markets with traveler preference for efficiency, convenience and price versus product.

I think many have seen this. LCC rise in region is pretty spectacular, and as other mentioned in prior post, Air Asia has almost become defacto Malaysian national airline.

Quoting LAXintl (Reply 15):
o Reset network to where MAS "can win" using commercial criteria. Build scale on routes where Malaysia is primary O&D market versus transit point. Secure global connectivity through oneworld and other commercial alliances

I guess MAS will get out of the cheap ticket transit game and set focus to Malaysia origin/destin traffic.

They can probably get good traffic flow via OW partner hubs if they better align. Much cheaper proposition then sending your own planes to across Europe or Americas.

Quoting LAXintl (Reply 15):
o Adjust fleet to better fit MAS network and markets - move to smaller aircraft, retirements, and adding seats to reduce unit cost.

Sounds like future is with smaller number of smaller gauge aircraft.

Quoting LAXintl (Reply 15):
8) Right-size the workforce
o NewCo will require workforce of approx 14,000 down from present 20,000. MAS currently significantly lags industry peers in employee productivity (41% worse then CX, 69% worse than SQ). Industry benchmarking indicated to approx 30% over staffing.

Pretty appalling how inefficient they are compared to full service peers.
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LAXintl
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RE: MAS Begins To Outline Restructuring Plans

Wed Sep 03, 2014 5:34 pm

Reviewing the larger document, yes its pretty clear that if Khazanah has its way, the future NewCo. MAS will be a different and smaller company focused primarily flying within the ASEAN region core chasing routes are have high local demand.

This restructuring is likely the biggest reset in the airlines history since the split with then Singapore.

Many issues have contributed to where MH is today, but it has developed into a rather inefficient enterprise with significant cost and revenue disadvantages versus its peers in the region.

As far as comments that MH look to re-merge with SQ, the document makes clear there is zero room for such. MAS is clearly seen as a national icon and symbol of Malaysia's independence, so its survival is a national compact that will unite all parties involved.


Anyhow here are some random bits in addition to what I posted previously:
o Cumulative "quantum" net losses of RM8.4bil since 2001.
o While 7 of 13 years were net profitable, the quality and quantity of earnings "modest at best"
o MAS financial picture "deteriorating rapidly" following twin tragedies
o Historically MAS operated significant portion of unprofitable routes - socially imposed and to develop Malaysian tourism.
o Moving forward utilize clear commercial criteria for network planning
o Huge gaps in productivity compared to peers. Revenue per employee only 38% of SQ and 51% of CX
o Cost base dwarf LCC competitors. Air Asia cost advantage greater than 40%
o Strengths include, product known for hospitality, young fleet, prime tourism market, good location in economically dynamic region, and large and rapidly developing consumer home market
o 5-year recovery plan will culminate under "[email protected]" banner
o Government cannot continue to fund airline without clear path to sustainable profitability. Money put into MAS takes away from other national priorities. For example could have built 1,700 schools or 200,000 homes instead.
o Malaysia domestic demand growing about 8% per annum, but average fares also dropping as new capacity is added faster than demand due rise in LCCs.
o Seek to achieve cost advantage over Asian full service carriers, match cost of ME3
o Achieve short haul unit cost within 15% of LCCs
o Raise overall network unit revenue 10-15%

Quoting mercure1 (Reply 23):
Thanks LAX for the details

Glad to share.

[Edited 2014-09-03 11:04:20]
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qf2220
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RE: MAS Begins To Outline Restructuring Plans

Wed Sep 03, 2014 8:08 pm

Quoting LAXintl (Reply 24):
As far as comments that MH look to re-merge with SQ, the document makes clear there is zero room for such.

What about an AirFrance/KLM type deal?

Quoting LAXintl (Reply 24):
MAS will be a different and smaller company focused primarily flying within the ASEAN region core chasing routes are have high local demand.

That strategic focus will fit with a QF deal as ive suggested. Two poorer performers i think in this situation could make a good go of it.
 
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LAXintl
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RE: MAS Begins To Outline Restructuring Plans

Wed Sep 03, 2014 9:27 pm

Quoting QF2220 (Reply 25):
What about an AirFrance/KLM type deal?

We'll they are not looking for any equity deals.

Only outside partnerships they speak about is generating benefit from network connectivity with OW partners (which could certainly include QF), and other outside alliance codeshares which offer MAS strategic benefits.
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Viscount724
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RE: MAS Begins To Outline Restructuring Plans

Thu Sep 04, 2014 1:11 am

Quoting LAXintl (Reply 15):
am in receipt of the restructuring plan documents for MAS.

Where did you find them? Are they public documents?
 
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777Jet
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RE: MAS Begins To Outline Restructuring Plans

Thu Sep 04, 2014 1:30 am

I know MH is trying to turn business around, but apparently this media stunt backfired, some calling it a 'PR mightmare':

http://www.smh.com.au/travel/travel-...ist-challenge-20140903-10bz1p.html

This reply was gold: "I'll tell you what's NOT on my bucket list - flying on Malaysia Airlines."

What did they expect? Nonetheless, I think the criticism is a bit of an over-reaction, but MH has certainly taken over from the 787 in terms of media attention  
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DeltaB717
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RE: MAS Begins To Outline Restructuring Plans

Thu Sep 04, 2014 2:02 am

Quoting QF2220 (Reply 5):
A slight degree of self promotion and apologies to the Aus Av readers for duplication, but I suggested in the Aust Av thread a couple of days ago that MH could be QF's IB. Refer to link below. I thought perhaps MH interested people might have an opinion.

I like the concept. It makes some sense as they could potentially consolidate and benefit from the synergies. One difference I see though is that the BA/IB partnership exists within the pseudo-domestic EU market, whereas QF/MH isn't as open (politically). I'm not an expert by any means but I imagine that might place some limitations on a QF/MH partnership?

Quoting mercure1 (Reply 1):
Do they continue double daily at place like LHR, or do they sell one valuable LHR slot?

Are they better to sell the slot, or lease it? A sale gives them a (presumably very large) lump-sum whereas a leased slot is an ongoing revenue source.
 
changyou
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RE: MAS Begins To Outline Restructuring Plans

Thu Sep 04, 2014 5:22 am

Rumours brewing within the crew dept:

Firefly: Taking over all domestic/selected regional routes that was served by MAS
Taking over all NarrowBody fleet (738) from MAS
Absorbing all NarrowBody cabin crew from MAS
Establish as a regional wing for NewCo (SQ/MI)

NewCo: Only operate A333/A388
Certain China/Australia/Europe will be cut/reduce frequencies
A333 will operate short/medium/long hauls...(higher usage)
Inflight supervisor position will be remove and replace with Chief steward/stewardess.
 
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LAXintl
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RE: MAS Begins To Outline Restructuring Plans

Thu Sep 04, 2014 2:11 pm

Quoting Viscount724 (Reply 27):
Where did you find them? Are they public documents?

Don't think there is anything public. Maybe something will be posted about the plan at the MAS investor website.

This plan was put together rather rapidly over the summer and while it nicely highlights the broader targets, there still is lots of work to define the details about the 12 main "features".

I suspect once they get some meat on the bones we'll start to see more revealed publicly.

The job cuts alone probably have everyone on their edge of their seats waiting.
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qf2220
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RE: MAS Begins To Outline Restructuring Plans

Thu Sep 04, 2014 2:41 pm

Quoting DeltaB717 (Reply 29):
I like the concept. It makes some sense as they could potentially consolidate and benefit from the synergies. One difference I see though is that the BA/IB partnership exists within the pseudo-domestic EU market, whereas QF/MH isn't as open (politically). I'm not an expert by any means but I imagine that might place some limitations on a QF/MH partnership?

Yep, the air services agreements will be a complicated factor in all of this but surely they could modify some of them pretty quickly and for those that they cannot, they can interline onto MH like they do with a range of the EK flights. The political aspect will be challenging too, given the respective sentiments in the Malaysian and Australian communities for MH and QF, though the potential benefits IMO would be positive, and if the sentiment can be put in perspective, realised.
 
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RE: MAS Begins To Outline Restructuring Plans

Thu Sep 04, 2014 2:51 pm

Quoting LAXintl (Reply 31):
The job cuts alone probably have everyone on their edge of their seats waiting.

There are works behind the scenes to transfer employee, where possible, to other government-owned enterprises - due to political nature of the airline, most local hires will transition to other employments (albeit not with the same travel perks).
 
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RE: MAS Begins To Outline Restructuring Plans

Sat Sep 06, 2014 6:36 am

Quoting changyou (Reply 30):
NewCo: Only operate A333/A388
Certain China/Australia/Europe will be cut/reduce frequencies

Do you think that cuts will include AKL and AMS as they might be unable to sustain A380 flights , but the A333 does not have the legs to reach them from KUL? Considering MH has just increased to daily to AKL this would be disappointing.
 
byronicle6
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RE: MAS Begins To Outline Restructuring Plans

Sat Sep 06, 2014 6:59 am

Quoting Andrensn (Reply 34):
Do you think that cuts will include AKL and AMS as they might be unable to sustain A380 flights , but the A333 does not have the legs to reach them from KUL? Considering MH has just increased to daily to AKL this would be disappointing.

Are you sure? Air Asia X flew KUL-CHC on A333. KUL-AMS might be a stretch on an A333 though...
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Andrensn
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RE: MAS Begins To Outline Restructuring Plans

Sat Sep 06, 2014 7:34 am

Quoting byronicle6 (Reply 35):
Are you sure? Air Asia X flew KUL-CHC on A333

Air Asia X's flights to CHC were payload restricted IIRC which contributed to its axing so i'd be surprised if MH can do any better on KUL-AKL with the same equipment

What routes could/will we see cut within Oceania or Europe by MH??
 
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LAXintl
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RE: MAS Begins To Outline Restructuring Plans

Sun Sep 07, 2014 11:29 pm

Below Reuters article mentions that per sources MAS could sell its 6 A380s.

Carrier would likely build its widebody fleet around the A330 and maybe A350s in the future.


http://www.reuters.com/article/2014/...estructuring-idUSKBN0H20UB20140907

=

Also analyst believe A380s are big obstacle for the airline by destroying yields, requiring significant discounting to fill.
From the desert to the sea, to all of Southern California
 
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RE: MAS Begins To Outline Restructuring Plans

Mon Sep 08, 2014 12:18 am

I also noted the issue of setting fares was raised in that Reuters report. It seems like they have already been acting on that decision by increasing the cost of the fares on most routes that I checked.

In some respects that is a pity, as there is now no competitive fare advantage, and even their sale prices are set high, and so now people's decisions to fly MH (on routes with competition) will now be based on any benefit the hard product will give them, and maybe timing/connections.

I loved flying MH on their a333, their old 747's and 777's, but even more so on the a380, so it will be a sad day if they let them go.

Good luck MH
 
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rotating14
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RE: MAS Begins To Outline Restructuring Plans

Mon Sep 08, 2014 12:46 am

I'm just gonna throw this out there just for the sake of conversation but could MH be a candidate for any of the terrible teens? If they are thinking of getting rid of the A380's because of its financial burden, could they just pick up some refurbished 787's on the cheap with the capital from A380's, IF they end up doing so?
 
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RE: MAS Begins To Outline Restructuring Plans

Mon Sep 08, 2014 12:55 am

Quoting rotating14 (Reply 39):
I'm just gonna throw this out there just for the sake of conversation but could MH be a candidate for any of the terrible teens?

I know these 'terrible teens' are heavy and have other issues, but what is the range of them compared to the new A330s that MH seem to be basing their long haul fleet around?

Quoting rotating14 (Reply 39):
If they are thinking of getting rid of the A380's because of its financial burden, could they just pick up some refurbished 787's on the cheap with the capital from A380's, IF they end up doing so?

If they don't get rid of their A380's now, I doubt they will for a long time. IMO it was a mistake to order them. I know they wanted the PR prestige that being an A380 operator brings especially given that regional competitors such as SQ and TG operate A380s (even TG operating the A380 is questionable and IMO TG and MH ordered just a few for the same reasons - to try to compete with SQ on a PR level and be able to offer A380 service to customers). I hope MH come to their senses and get rid of the A380s. If they did, who are the likely candidates to pick them up? IIRC this would be the first time used A380s enter the market  
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RE: MAS Begins To Outline Restructuring Plans

Mon Sep 08, 2014 7:34 am

Quoting LAXintl (Reply 37):
Below Reuters article mentions that per sources MAS could sell its 6 A380s.

Carrier would likely build its widebody fleet around the A330 and maybe A350s in the future.

Well this cannot be a short term measure because the A330s of MH cannot fly to Western Europe nonstop as they only have the A333s currently.

Is the B772ER really considered to be a "gas guzzling" aircraft as mentioned in the article?
 
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RE: MAS Begins To Outline Restructuring Plans

Mon Sep 08, 2014 7:57 am

I am not surprised by the information regarding the A380 operation. The amount of fare dumping that is going on in South East Asia on the Paris and London routes is just phenomenal. MH is selling well below the ME3 fares by now on these routes and while that may fill the aircraft to a certain extent, yields must be just horrendous. I know of an Indonesian group that was offered a business class group fare on MH below the economy class fare AF was offering for the same dates on the CGK CDG route.

I believe that MH can realistically only make money with the A380 on the midnight LHR departure from KUL. Both the daylight LHR and the CDG routes must be firmly in the red and the question is whether at that point, the airline can still sustain an A380 operation.

I could see MH get rid of one Heathrow slot pair, and operate a refurbished B772ER with the other slot pair until the A350 becomes available. MH may also hang on to the AMS flight, as the cooperation with KLM seems to be reasonably successful. I do not think that CDG, FRA and IST are still viable at this point. Increased cooperation with the likes of BA and QR is likely the way to go for the Europe market.
 
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RE: MAS Begins To Outline Restructuring Plans

Mon Sep 08, 2014 5:58 pm

Financial Times story on planned restructuring.
http://goo.gl/vDHgof

Even Tony Fernandes of Air Asia seems to think it good.

“I think the difference between this restructuring and many others is the sheer determination by all parties,” says Tony Fernandes, founder and chief executive of AirAsia, Malaysia Airlines’ main rival in the region.
“It’s the first time I’ve seen the political will, with Khazanah and everyone saying ‘we’ve got to fix this’, and I think that’s the difference. I think the plan has a good chance.”



Analyst see the best chance for recovery for the airline is to focus on developing a strong network around its home country region, though it needs to understand that short/medium haul passengers are are price sensitive, so it will not busy to dominate the market.
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mercure1
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RE: MAS Begins To Outline Restructuring Plans

Wed Sep 10, 2014 12:44 am

I can certainly understand argument that A380 is challenge to fill at profit, and likely will become even more handicap for MAS if they do pursue business plan that places less emphasis on transit flow.
Certainly Malaysian home market on its own does not need A380 to places like LHR. Only way they manage is by collecting transits everywhere such as Australia and rest of ASEAN market.
More realistic capacity for MAS and Malaysia home market might be more along 787/A350 size for future.
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777Jet
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RE: MAS Begins To Outline Restructuring Plans

Wed Sep 10, 2014 1:00 am

Quoting behramjee (Reply 41):
Is the B772ER really considered to be a "gas guzzling" aircraft as mentioned in the article?

I highly doubt it in general given their success and worldwide usage. But perhaps the way MH use them they are? Perhaps the loads they carry are not enough so instead of admitting that they are using it in the wrong way they just try to blame the a/c for their own failures?

Quoting behramjee (Reply 41):
Well this cannot be a short term measure because the A330s of MH cannot fly to Western Europe nonstop as they only have the A333s currently.

Would the terrible teen 788s be able to reach Western Europe nonstop from KUL? If the 777 is not wanted at MH and the 330s lack the range then the 787 / 350 is really the only fuel efficient alternative... And we know how soon the terrible teens could be delivered... Perhaps a deal with Boeing to get rid of the 772s for the 787s?
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7BOEING7
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RE: MAS Begins To Outline Restructuring Plans

Wed Sep 10, 2014 2:33 am

Quoting 777Jet (Reply 45):
Would the terrible teen 788s be able to reach Western Europe nonstop from KUL? If the 777 is not wanted at MH and the 330s lack the range then the 787 / 350 is really the only fuel efficient alternative... And we know how soon the terrible teens could be delivered... Perhaps a deal with Boeing to get rid of the 772s for the 787s?

ANA is using their early numbers (7, 8, 9 & 24) only as far as SIN, however, JAL is using their's (21, 22 & 23) to BOS and CDG. Don't know what the weight delta is for the terrible teens and the early twenties but it might be doable.
 
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777Jet
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RE: MAS Begins To Outline Restructuring Plans

Wed Sep 10, 2014 4:05 am

Quoting 7BOEING7 (Reply 46):
ANA is using their early numbers (7, 8, 9 & 24) only as far as SIN

Ouch. That's not far at all. I'm sure they could go farther but maybe they are just kept on those shorter routes because it fits in with scheduling as well...

Quoting 7BOEING7 (Reply 46):
JAL is using their's (21, 22 & 23) to BOS and CDG.

NRT-BOS - 6,694 miles.
NRT-CDG - 6,040 miles.

v

KUL-AMS for MH - 6,367 miles.

So if the early JAL birds can do NRT-BOS then KUL to Western Europe looks possible for MH even with the terrible teens. How much could Boeing modify / tweak such birds? I mean, how close to maximum 788 performance could they get? I wonder how much worse off they are compared to the maximum 788 performance numbers?
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7BOEING7
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RE: MAS Begins To Outline Restructuring Plans

Wed Sep 10, 2014 4:16 am

Quoting 777Jet (Reply 47):
So if the early JAL birds can do NRT-BOS then KUL to Western Europe looks possible for MH even with the terrible teens. How much could Boeing modify / tweak such birds? I mean, how close to maximum 788 performance could they get? I wonder how much worse off they are compared to the maximum 788 performance numbers?

The only issue would be the weight, they'd have the latest engines with all the performance improvements.
 
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RE: MAS Begins To Outline Restructuring Plans

Wed Sep 10, 2014 4:41 am

Quoting behramjee (Reply 41):
Is the B772ER really considered to be a "gas guzzling" aircraft as mentioned in the article?

Compared to a 77L or a 77W, or the modern airplanes, yes. But compared to planes in its own class and time, no. Compared to the 747, a 772ER is a Prius and the 744 would be a hummer stretch limo.

Quoting LAXintl (Reply 43):
“I think the difference between this restructuring and many others is the sheer determination by all parties,” says Tony Fernandes, founder and chief executive of AirAsia, Malaysia Airlines’ main rival in the region.

They're determined to pretty much not collapse. That's what's up.

Quoting 777Jet (Reply 47):
Ouch. That's not far at all. I'm sure they could go farther but maybe they are just kept on those shorter routes because it fits in with scheduling as well...

Well I think they originally designated those frames to do domestic. Remember, a good chunk of NH dreamliner flying is domestic.
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