MAS ON A SLIPPERY SLOPE

MAS on a slippery slope

When the first order of business for the board of directors is to ensure that they remain in the board, rewarding themselves with more shares and benefits, there is no wonder that the fate of the MAS employees has never been their main concern, thus the expected decision of offering a two-year unpaid leave to all MAS employees. But can this move really save MAS? The answer is no, it can only delay the inevitable; more huge losses.

Rafidah Aziz after making millions out of the AP scandal has the nerve to ask the MAS union to embrace the cost cuts but refused to put pressure on UMNO to improve things in MAS. Two years without pay is terrible, it is fine for Rafidah, she has millions in her accounts.

When Idris Jala was brought in to save MAS, he did what any simple minded businessman would do as a simple way out; sell its assets to get the balance sheet in order. Never in MAS history have it ever tried to improve its business dealings and activities.

MAS board of directors is handpicked by UMNO to serve UMNO top politicians. While UMNO is famous for its corrupt activities, how can any improvement be made in MAS with these kind of people serving on the MAS Board of Directors?

The choice of the CEO Ahmad Jauhari has been question because he has no relevant experience in running an airline business. The AirAsia-MAS share swap was criticized on its inception because it was UMNO’s idea and just a money-making scheme.

MAS has always been pointing fingers at the world economic turmoil, high fuel costs, less air travellers, unprofitable routes and natural threats like the bird flu and terrorism. It has never looked at its own incompetence and shortcomings. But these are all temporary and there are several mechanisms that can be put in place to reduce the impact. Look at Singapore Airlines as an example; its management is creative and pragmatic.

The proper way to save MAS is to undertake an overhaul of the company. MAS must start doing proper business, to make profit and not siphon the money through money-making schemes. It is a known fact that cronyism and corrupt business dealings is prevalent in MAS.

The contract between the vendors supply everything that MAS needs must be reviewed and get MACC involved. Since the catering business is so profitable that Brahim wants to buy out the portion owned by the German company for RM130 million, MAS should take over the catering which should not be privatized in the first place. There are other vendors providing services, consumables, IT, engineering, transportation and all sorts of business deals that have been privatized to cronies and all making money, milking MAS dry.

Then the entire organization must be reviewed and unscrupulous personnel be sacked and charged in court. The morale of the employees is so low that many simply come to work so that they will get the salary at the end of the month. The employees will only do what is necessary and without commitment. The engineering staffs are more interested in getting overtime without much productivity. They are also more interested in collecting their skill accreditation that is recognized worldwide and after their five year contract, they will definitely be offered better by other airlines.

Those supervisors employed by MAS are also not motivated as the top management has never shown any real interests in their welfare. Since they are the eyes and ears of the top management, they will only report what the top management wants to hear and not what the management should hear. Thus despite losing hundreds of millions, the picture is always pretty in MAS.

Unfortunately since MAS has somehow compartmentalized every division, the group of companies under the MAS organization are in fact separate entities, each serving its own interests and not for MAS. Therefore MAS is at the mercy of the bosses of each division. The MAS top management would not be able to know what is really going on in each and individual company. Of course in MAS, the top management will only be interested in profit; as long as the divisions are making money, the top management is happy, but a profit of RM1 is also profit.

With this two-year unpaid leave offer by the top management, MAS is going to be like an empty shell, without any productive workforce but just parasites in its organization.

Tony Fernandez of AirAsia as the CEO is able to get first-hand information directly from any department he wants. Tony Fernandez has been known to help the AirAsia baggage handlers and the individual who changed the tyres of the aircraft. AirAsia is operating as one entity like the ants in the ant colony all serving the queen; AirAsia is the queen that provides all the juice for the AirAsia community.

As for MAS, everybody is individualistic and not with MAS in mind but their masters; the top UMNO politicians. Without any more tangible assets to be sold, the next move announced by MAS is to borrow money by creating the sukuk bond valued at RM4 billion to pay for the aircrafts. The UMNO/BN government will continue bailing out MAS via Khazanah.Despite Azman Mokhtar saying it is not a bail outit is indeed a bail out because MAS won’t pay back a single sen. In trying to sugarcoat the deal instead of the words bail out, UMNO uses the phrase “equity capital injection”. It is a bail out because MAS won’t pay back a single sen. This is not a loan that has to be paid back; this is an investment albeit a silly one. This will also enable UMNO to tell the rakyat that Khazanah has invested in MAS but unfortunately in incur a huge loss and that is to be expected in any kind of business.

Now, any right minded financial institution or fund managers would not jump in and buy the proposed MAS sukuk bonds because MAS is losing money. How on earth MAS will be able to honour the bonds when the time comes without any money to pay back? The only financial institution and fund managers that will be able to buy are the ones owned by the government or those that are confident the Malaysian government will pump in the money to pay for the matured bonds or as usual for Malaysian GLCs to create more bonds to pay the due bonds. This entire scheme is ridiculous and crazy. It won’t solve the mismanagement in MAS, in fact it will encourage more corruption and in the end MAS will continue losing money and the rakyat will foot the bills.

As long as the UMNO/BN government refuses to make changes in MAS, the rakyat will have to bear the cost of financing the huge losses in MAS as it continues down a slippery slope to bankruptcy.

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