Body Shop Case
7 Reasons Why Khazanah Should NOT Undertake the Share Swap Between MAS and AirAsia
September 22, 2011 at 8:52am
The timing of the share swap could not have happened at a worst time as it will largely benefit AIRASIA shareholders even without their own effort and Khazanah has given away a large portion of their net worth in MAS for free.
By troubleshooters2011
1. MAS MANAGEMENT HAS INITIATED THE RIGHT STRATEGIES AND IMPLEMENTATION TO TURNAROUND THE COMPANY AND THEREFORE DO NOT NEED THE TIE-UP WITH AIRASIA
A quick analysis on the current state of MAS indicates that they are on the right track. The three key cost factors that need attention are fuel, maintenance and manpower cost. With regards to fuel cost, MAS has taken some steps to reduce the unpredictability of the movement of fuel price. With a bit of tweaking they will get it within control as you cannot totally eliminate uncertainties linked to fuel pricing.
On maintenance cost, the fleet renewal program will start to alleviate the impact of maintenance on the operating profits while shifting the cost towards the interest expense while creating a healthier balance sheet. If at all the national carrier is guilty, it is that the fleet renewal program should have been carried out earlier, say 2007 when MAS would have been able to hive off depleting assets at a higher value and not incurred high maintenance costs which would have increased y-o-y that has negative impact on the operating profits.
The reduction of manpower cost or the rightsizing of this cost can be properly planned through natural attrition and redefinition of job scopes that need key union and association buy in for success. This has always been done as a top down approach but in all fairness,engagement at the shop floor needs to be intensified as it is the personnel at this level that will impact the bottom line in terms of efficiency, productivity and effective implementation.
2. BASED ON THE EFFORTS OF PAST MANAGEMENT, MAS SHOULD
September 22, 2011 at 8:52am
The timing of the share swap could not have happened at a worst time as it will largely benefit AIRASIA shareholders even without their own effort and Khazanah has given away a large portion of their net worth in MAS for free.
By troubleshooters2011
1. MAS MANAGEMENT HAS INITIATED THE RIGHT STRATEGIES AND IMPLEMENTATION TO TURNAROUND THE COMPANY AND THEREFORE DO NOT NEED THE TIE-UP WITH AIRASIA
A quick analysis on the current state of MAS indicates that they are on the right track. The three key cost factors that need attention are fuel, maintenance and manpower cost. With regards to fuel cost, MAS has taken some steps to reduce the unpredictability of the movement of fuel price. With a bit of tweaking they will get it within control as you cannot totally eliminate uncertainties linked to fuel pricing.
On maintenance cost, the fleet renewal program will start to alleviate the impact of maintenance on the operating profits while shifting the cost towards the interest expense while creating a healthier balance sheet. If at all the national carrier is guilty, it is that the fleet renewal program should have been carried out earlier, say 2007 when MAS would have been able to hive off depleting assets at a higher value and not incurred high maintenance costs which would have increased y-o-y that has negative impact on the operating profits.
The reduction of manpower cost or the rightsizing of this cost can be properly planned through natural attrition and redefinition of job scopes that need key union and association buy in for success. This has always been done as a top down approach but in all fairness,engagement at the shop floor needs to be intensified as it is the personnel at this level that will impact the bottom line in terms of efficiency, productivity and effective implementation.
2. BASED ON THE EFFORTS OF PAST MANAGEMENT, MAS SHOULD