MAS' Red Marks

Half-billion ringgit loss for second quarter. That's what the results from the MAS earnings was like, with such result shows the roller-coaster effect that the main Malaysian airline is facing in the last few years like. I can see that if there's one reason, it's because of the popularity and the better alternative of Air Asia that sales for MAS dropped - that would be my first inference and talk about it.

Unless of course other airlines don't have the destinations that MAS gives, then of course you would go for the current ailing airline. I once remembered that the staff and crew were complaining that their salaries were the lowest of the region, if I am not mistaken that is. 

If I look at the diagram above, SIA has always been very consistent in its sales and services, and multiply the net profits by 2.4, even theirs have surpassed our lines. One of my relatives who is in service there told me that their annual bonuses is 1/4 of the yearly salary (for one of the years there).

I can only say that the why MAS got red margins not just only this year, but in previous years is simply because of how it was badly handled in the beginning. The bailout in 2001 to this day never restored the company back to its prime moments. Though Idris Jala did manage a turnaround, it was partially finished, never to the full restoration until he got roped in to be in Pemandu lab head. Then comes the hedging oil strategy and positioning, it looks like at the wrong end. It should have been placed around a 5-10% lower than the estimate because the fuel prices will eventually go down somehow. People realized in 2008 that going to 147 and up was totally impossible because there is a bubble limit before it gets burst.

If MAS says that the fuel costs was the main problem behind the half-a billion dollar lost, then the problem is the ringgit is weak and still at an unacceptable levels. It has to go up some more. Why does SIA still remains successful? You look at how SGD vs USD - 1.2 to 1, easy to buy fuel, and what about us? 3 to 1, so how much money did we lose due to exchange rates?

It's a false footing for the so call Najib's ETP. The ETP's progress and funding assumes that the yearly GDP is no less than 6% or more but with world markets taken a beating in the last few weeks, it is virtually impossible to reach the 6%, so it's likely a setback and at least a six month delay in the roadmap. Frankly, I don't really believe in the "our economics are strong" statement. That sounds like McCain's and a right-wing statement, a statement that cost McCain in his presidency against Obama. 

To travel by air at this point of time, for the poor, will be hard...very very hard.