The letter, AirAsia part of MAS’ woes from Tadin Sahak is so full of mistaken assumptions that I wonder if the writer has any idea of the aviation industry and how airlines are run.
To put it bluntly, airlines, especially if they are public-listed companies, are supposed to be profitable, and to be run for the benefit of its ultimate owners - the shareholders.
MAS has failed dismally on both these criteria. It is not profitable. Its long-suffering shareholders have seen the value of their shares drop when stock markets in the region and around the world are going up.
Can MAS blame its predicament on an unsympathetic external environment? No, it can't - not when other airlines, operating under the same environment of high fuel prices and cut-throat competition, are able to be profitable quarter after quarter. Thus Singapore Airlines announced Q3 profits of S$397 million, and British Airways had Q3 profits of around US$200 million plus.
The simple fact of the matter is that SIA and BA, not to mention other airlines such as Cathay Pacific, Qantas, Lufthansa and Air France, are managed well by executives who keep a close watch on costs and the bottom line, while not stinting on passenger service, comfort and safety. And this is where MAS has fallen down, badly.
To blame MAS' woes, even partially, on AirAsia, is both specious and laughable. MAS got its operating model wrong. It got saddled with a "national service" agenda which it should have had the courage to reject or have asked the government to pay a fair price for following the agenda of
providing domestic air services and not laying off staff. When MAS is losing money on its international routes, you know that the situation is out of control. Why? Because other airlines flying international routes are profitable.
The government is also to blame for not articulating and implementing a rational national aviation policy. There have been umpteen statements as to how KLIA will become a major regional air hub, yet it is running a poor third behind Changi Airport and Bangkok Airport.
There is simply no aviation policy in place, and Malaysia Airports doesn't seem to have a clue how to attract major international airlines such as British Airways, Qantas and United Airlines to have flights to KLIA. It also can't have escaped the government's notice that even the Indian budget airlines have chosen to operate more flights to Changi than into KLIA.
It might be easy to vilify AirAsia as a possible cause of MAS' woes, but that view is easily demolished by the fact that SIA is making handsome profits in the face of competition from three Singapore-based budget airlines.
At the end of the day, it is all about management. And it is an area where, MAS, up to now, has fallen dismally short. And no one, until now seemingly, has had the political courage to admit it. |
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