Thursday, March 22, 2012

MAS able to become profitable again with oneworld member?

By The Star

By year-end Malaysia Airlines (MAS) would have become a full member of the oneworld alliance and would be able to offer connectivity to about 800 destinations in 150 countries by riding on an expanded oneworld network.

“This membership will be among the significant catalysts that will complement our efforts to win back customers and become a profitable preferred premium carrier as outlined in our Business Plan,'' said MAS group chief executive officer Ahmad Jauhari Yahya.

Jauhari said the entry into oneworld would enhance its network considerably while providing baseload demand from fellow oneworld members.

“The prospect of being able to offer improved global coverage and connectivity through an expanded network of great airlines to MAS guests is indeed very exciting. Our customers, in particular members of our Enrich loyalty programme, will benefit from increased rewards and recognition while enjoying more seamless air travel options “We look forward to our full membership that will improve our brand awareness among the alliance members' customers and enhance our load factors through additional partner traffic,'' Jauhari said when witnessing the entry of airberlin into oneworld on Tuesday.

Airberlin now serves 162 destinations in 40 countries with a fleet of 170 aircraft and a workforce of 9,200 employees and it became part of oneworld, adding the second biggest airline in Germany and the sixth biggest in the European continent overall to the airline alliance. Austria's NIKI, also a member of the airberlin group, joined oneworld as an affiliate member at the same time.

Other oneworld members include American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan Airlines, LAN, Qantas, Royal Jordanian and S7 Airlines, as well as 20 affiliates including Austria's NIKI, American Eagle, Dragonair, LAN Argentina, LAN Ecuador and LAN Peru.

Malaysia Billionaire:
Oneworld is just a platform that convenience the internet users to book their air tickets, where you are able to garner all the flight information across the globe provided the participant airliner is a members. I personally think it would not make sure impact on MAS profits.

Monday, March 12, 2012

Malaysia Locally Assemble VW Passat

By YS Kong -

Pekan, 11 March, 2012 – It is here at last – the locally assembled Volkswagen Passat was unveiled today by the Malaysian Prime Minister YAB Dato’ Sri Mohd Najib bin Tun Haji Abdul Razak in the royal town of Pekan, Pahang, at the DRB-Hicom plant. This historical moment represents the first fruits of the collaboration between our local automotive conglomerate and the Volkswagen Group, which began with discussions that resulted in the auspicious signing ceremony held at the end of 2010.

Present at the unveiling were the top management of DRB-Hicom, including Dato' Syed Mohamad Syed Murtaza, Chairman of DRB-Hicom, Dato Sri Haji Mohd Khamil Jamil, Group Managing Director, DRB-Hicom, and top management from Volkswagen, Dr. Christof Spathelf, Senior Vice President, Group Manufacturing Overseas and Mr. Soh Wei Ming, member of the Board of Management of Volkswagen, and Head of Commercial Operations, China/Asean. Also present was Mr. Ricky Tay, Managing Director, Volkswagen Group Malaysia.

According to a follow up release, the Volkswagen Passat is priced at RM170, 888, and will be available for sale at all the 18 Volkswagen outlets nationwide. The release also stated that the Passat will have other variants, and the price will range from RM169,888 to RM184,888, according to specification and trim levels. We understand that some 300 units are already assembled, and ready for delivery.

According to Dato Sri Khamil, this collaboration with Volkswagen will eventually boost the production volume at the Pekan plant from its current 23,000 units a year to 50,000 units when the full complement of the planned local assembly is activated. Although at this time, Dato’ Sri Khamil did not specify what models are to be assembled, we do recall a year ago during the initial signing ceremony between DRB Hicom and Volkswagen that the Polo sedan and the Jetta are the planned models.

Immediately after the launch, some members of the media who attended the ceremony were given a first-hand taste of the locally assembled Passat in the form of a 300 kilometre drive from the Pekan plant to the Glenmarie golf and Country Club in Shah Alam. Having seen and driven the CBU Passat not too long ago, we found the locally assembled Passat to be just as good. The parts for these first 300 units come as a total package from the Volkswagen Group – there is a target of 40 percent local content, and according to Dr. Spathelf, the local content will be introduced in stages, and all local content parts must meet the quality standards of Volkswagen before they can be accepted.
The test of the local assembly would be in the fit and finish, the door gaps and trim integrity – our first impression of the test units, and there were twenty of them on the road today, is that the local units are indeed as good as the imported units.

Malaysian Billionaire:

So finally they made it, based on my previous posts. Here & Here

The price different between a local assembled (CKD) VW Passat and a fully imported VW Passat would be RM14k.

OTR (Without Insurance) Fully Imported = RM 185,967.20
OTR (Without Insurance) Local Assembled (CKD) = RM 171,967.20

I personally preferred the VW Passat CC which is priced @ RM256,060.00 / RM 271,060.00 (Sport).

Friday, March 02, 2012

Does MAS payout bonuses to employees in this time around?

By The Star

It is about time Malaysia Airlines (MAS) is sold, and some have even suggested that it be sold for a ringgit.

Those who love MAS will fight tooth and nail to keep it but the reality is, selling it may just be an option to hopefully end its woes.

A decade ago, Tan Sri Tony Fernandes and his buddy Datuk Kamarudin Meranun paid a ringgit to buy AirAsia, which had two aircraft. They also took on RM40mil of the debts.

After seven months of operations, AirAsia managed to repay all its debts and made a profit of RM19.4mil.

That is history, but today, AirAsia has over 100 aircraft, operations in Thailand and Indonesia, and these two companies are slated for a listing this year. Japan, Philippines and even the Middle East are AirAsia's playgrounds and its cost is the lowest in the world because it is run by two entrepreneurs who are constantly thinking of how to rev up profits.

That is what MAS needs, not just cuts.

MAS has been through enough shake-ups, cost cuts and route cuts to be profitable but yet it falls into the red. The question is, will all the cuts this time around save the airline?

Will MAS be profitable and how profitable can it get?

On Thursday, MAS again shocked the market with a RM2.5bil net loss for full year 2011 and some of its own employees were dumbfounded with the figure.

The loss included a RM1.09bil provision, which was a non-cash item.

If you strip out the provision, the actual loss is about RM1.4bil. The provision is an accounting treatment which some analysts refer to as “kitchen sinking.''

Whether that kind of provision is necessary is up to the new team. But by so doing, it is taking the hit all at one go, so that when things improve, it can show profit. Whatever, they should know what they are doing.

Coming back to the point of selling the airline - of course there is also the contratrian view, since the airline was privatised before and had to rescued by the Government a decade ago. So why sell again?

The issue here is about positioning and for now MAS is often referred to by players as a second tier premium carrier whilst rival Singapore Airlines (SIA) is the first tier, and best in class.

The question ahead is also about survival in a highly competitive climate where even the biggest of players are merging and forming alliances and some have gone into arming themselves with both the premium and low cost suite of services to serve different market segments.

Take the example of SIA, it has both the low cost and premium products via its units, so has Thai Airways International, ANA, Qantas and even Japan Airlines.

SIA offers short/long haul premium services, value via Silk Air, short haul low cost via Tiger Airways and soon, long haul low cost via Scoot.

The share swap between MAS and AirAsia owners does limit competition and the collaboration is supposed to help the airlines work on many areas but it is nothing like having one big company that serves all market segments like SIA.

And how many more restructuring MAS needs to ensure it does not slip off route again.

We should be open about letting entrepreneurs run the show.

For a long time, MAS and Proton were two companies with big problems and were bleeding as they were seen to be “not competitive enough.''

After much resistance, the Government has finally sold Proton to DRB-Hicom, and now it is up to DRB-Hicom to prove that Proton is worthy of the purchase.

It also stops the possible public outcry that public funds are used to rescue companies.

Like it or not, Proton and MAS has to be run like private companies and those who call the shots should consider selling MAS.

Be it Fernandes or Kamarudin, they are in the business and MAS needs the “entrepreneurial push and mentality of making money.''

In the final analysis, we need a stronger and bigger Malaysian airline, not just a premium airline. That is food for thought.

* I bet all MAS employee are jst shaking their legs with nothing much work to do. I wonder do MAS payout bonuses to their employee?