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Analysts suggest MH should shut down after failing to be profitable

Analysts suggest MH should shut down after failing to be profitable

Old Mar 22, 19, 3:45 am
  #46  
 
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James Hogan?. Thought it a good idea for Etihad to buy Alitalia, air Berlin and Jet and bought the airline to,it's knees
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Old Mar 22, 19, 9:14 pm
  #47  
 
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Originally Posted by SilverChris View Post
AA doesn't give free upgrades to OW elites, and lounge access is very much as issue if you're a top tier member with their own programme flying within North America. I'd suggest reading up on how AA does things when it comes to upgrades and lounges, and maybe look up some trip reports to see how flying is like in the US. Then tell me if you still find AA to be more "welcoming" than MH.
- I did fly MH a few times in J (mostly DPS-KUL) and found the crew welcoming and attentive. Food on those flights and F lounge in KLIA were not particularly impressive. Today's AA is not what it used to be even 3 years ago but even now domestic upgrades (incl. award tickets) are free for the top tier AA flyers and, unless you fly a very busy route, are still >75%. Club access is another story- you have to be a paid member or have an access through a credit card which comes with a hefty fee in order to get in if you are flying domestically. This has nothing to do with "welcoming" but rather with history of airline clubs in USA and is the same for all domestic airlines. However if you OW (but not AA) Emerald or Sapphire you will be given access even if you fly domestically and solely on AA. You will be also given access to AA Flagship lounges regardless of your FF status if you are taking non-stop flights in J or F between:
  • New York (JFK) and Los Angeles (LAX)
  • JFK and San Francisco (SFO)
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Old Mar 24, 19, 5:42 pm
  #48  
 
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It's just Dr M shooting his mouth off. I'm sure he's hoping there's some silly person out there who wants some trophy asset and doesn't understand the history of the super inefficient MAS.
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Old Mar 25, 19, 12:56 am
  #49  
 
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He may be just shooting his mouth off but I would imagine he has done untold damage to the airline with many like myself not booking future flights.

Sad thing is he may just have signed the death certificate
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Old Mar 26, 19, 5:17 pm
  #50  
 
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Originally Posted by amnicoll View Post
James Hogan?. Thought it a good idea for Etihad to buy Alitalia, air Berlin and Jet and bought the airline to,it's knees
There was talk of the Indian government trying to get Etihad to buy more of a stake in Jet - assuming that Mr Hogan was still in charge
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Old Mar 26, 19, 5:18 pm
  #51  
 
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Originally Posted by amnicoll View Post
He may be just shooting his mouth off but I would imagine he has done untold damage to the airline with many like myself not booking future flights.

Sad thing is he may just have signed the death certificate
He won't let it go under... just see how obsessed he is with producing a national car.
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Old Mar 26, 19, 6:36 pm
  #52  
 
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So what is the root cause(s) of MASí unprofitability?

They seem to get the passengers on the flights Iíve been on (admittedly sometimes by rationalising three flights down to one) and they canít all be buying promo fares.

Is it too much government interference? Too many staff? Poor long-haul aircrsft utilusation? Or have they just got big loans to pay that eat into the margins?
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Old Mar 26, 19, 10:07 pm
  #53  
 
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Originally Posted by MeltingAlf View Post
I'm not sure how that's a good example. TBH, I see AK taking over routes that MASWings (and the government) running as a loss as a good thing. It's not a case of "it's so bad that AK has to step in" - but rather the fact that these routes have become profitable in their own right that 1) they don't need to belong to the RAS/PSO scheme and 2) you don't need to entice AK to take over from MASWings for these routes to be operated. Will AK run those routes on their own accord if they weren't profitable/required smaller aircrafts than the A320s? Highly unlikely. It doesn't match up on your point on MASWings reliability; nor deal with the issues that FAX gave, which were the presence of highly unreliable services to places they were to serve on a consistent basis under the RAS/PSO.
FAX is bad, MasWings is not much better. At least now with less routes, reliability is better but fares are still high.

What I meant by AK taking those routes is that MasWings has done such a bad job that nobody wants to fly with them. If AK can fly, why dosen't MH re-instate routes they used to have ie BTU/SBW/KCH routes with their B738 ?

Can MH be called a "National Airline" when it dosen't even serve places others can ?

Originally Posted by MeltingAlf View Post
Err, isn't that the point why MAS shouldn't be closed; or at least MASWings? In the presence of market failure (hence resulting in the rise of RAS), government intervention is needed. Never been to Mulu myself - that I concede, but with half of my family East Malaysians, I do know how to make my own judgements on how inconvenient/incompetent MASWings is. Can be better, but hell to the no to FAX days. Also, to be grounded to reality and honestly - has anything ever been in the absolute sense, convenient and competent on/for air travel in Sarawak and Sabah?
As someone who does/used to fly MasWings and MH frequently, they are doing no favors to Sabah & Sarawak. Even MH timings just seem to serve those who want to daytrip from KL.
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Old Mar 27, 19, 1:44 am
  #54  
 
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Originally Posted by jbfield View Post
So what is the root cause(s) of MASí unprofitability?

They seem to get the passengers on the flights Iíve been on (admittedly sometimes by rationalising three flights down to one) and they canít all be buying promo fares.

Is it too much government interference? Too many staff? Poor long-haul aircrsft utilusation? Or have they just got big loans to pay that eat into the margins?
Originally Posted by jbfield View Post
So what is the root cause(s) of MASí unprofitability?

They seem to get the passengers on the flights Iíve been on (admittedly sometimes by rationalising three flights down to one) and they canít all be buying promo fares.

Is it too much government interference? Too many staff? Poor long-haul aircrsft utilusation? Or have they just got big loans to pay that eat into the margins?
There can be any number of reasons you could list.
They were serving way too many routes and often using totally inappropriate planes for some - for example. I used to visit Penang from the UK. Like most logical people out there, I would imagine taking a wide body to Kuala Lumpur and then transferring to a smaller single aisle jet (which they do now). Oh no. Some time in the 1990s some bright spark thought - hey let's fly direct to Penang from the UK (unload a small number of passengers) and then fly it onwards to KL. Brief though that episode was, it's just illustrative of the bizarre the business logic was. Rumour was that someone in the board/government lived in Penang had a kid going to school in the UK and wanted a direct flight.
Speaking of important people, the other often spoken about rumour was that an important person would insist on flying premium class without paying for anything ... and also bring along their (non paying) entourage.
And then (this comes second hand) from what I heard from others, MAS allowed almost unlimited travel for its staff and family. This meant they would take seats from fare paying customers and thus bring down yields.

They have too many unprofitable domestic routes, but as a national(ised) carrier couldn't cut them. They then had to maintain them in the face of competition from the LCCs.
Singapore Airlines was also slow in recognizing the threat of LCCs, but they put their finger in the pie at least through (the albeit poor) Tiger Airways, before Scoot took over.

So many reasons ....
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Old Mar 27, 19, 11:06 am
  #55  
 
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Originally Posted by SQTraveller View Post
There can be any number of reasons you could list.
They were serving way too many routes and often using totally inappropriate planes for some - for example.

Speaking of important people, the other often spoken about rumour was that an important person would insist on flying premium class without paying for anything ... and also bring along their (non paying) entourage.

And then (this comes second hand) from what I heard from others, MAS allowed almost unlimited travel for its staff and family. This meant they would take seats from fare paying customers and thus bring down yields.
None of which are issues today. In fact, you'd be surprised by the rates that these "important persons" pay when flying MH, albeit on the public's dime.

Originally Posted by SQTraveller View Post
So many reasons ....
True, but I also wonder if rumours and hearsay count as "reasons".
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Old Mar 27, 19, 7:22 pm
  #56  
 
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I remember they slice their price too much during 2007 to 2010 to compete with both Air Asia and SQ...

I used to able to get a flight from USA back to KUL with 2/3 or less than what SQ offer. Although occasionally SQ would try to match the price too. But then the additional cost for connection from international to domestic flight is only 10 USD or none at all. And that period if you compare their single tripe and return trip air fare, the return trip is only cost about 50% extra than the single trip.

It was good for customer, but I always wonder how they make profit during that period. Especially when flying quality and experience in economy class is similar to SQ during pre-2010 period.
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Old Mar 28, 19, 4:13 am
  #57  
 
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Like many Malaysian companies, MH has a "price first" culture which flows over into other areas of airline decision making. Thus, the price is placed before value.

There's a great example of the man who calls a pizza shop and wants to order 25,000 Pizzas.
The man tells the pizza shop boy on the phone "I have a $2 per pizza discount coupon"
Pizza boy tells the man sorry we won't accept coupons for your order, and the man hangs up the phone.
Pizza boy goes to his manager, proudly saying "I just saved the pizza store $50,000".
Boy gets a promotion.

Welcome to Malaysia Airlines.

The biggest success factor in all the top companies is culture. Poor culture = poor corporate performance.
It means all the strong performers and the talent you WANT to KEEP end up leaving the organisation due to ...... culture. The poor attitudes beat them down.

The inverse effect rings true - if we were to look at everyone at MAS who has had a promotion over the past few years - they're probably great at politics and incompetent at their actual job.
A perfect example is the 2x world leading CEOs who left MH within 2 years.
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Last edited by d00t; Mar 30, 19 at 12:47 am
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Old Mar 29, 19, 1:51 am
  #58  
 
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The thing is whatever business that has government interference will not do as well as a business that is independently managed. So for Malaysia Airlines, part of the problem lies in their supply chain that is used to benefit certain political members or associates, and also protectionism policy of certain race. I do not see the resignation of Mueller and Bellew as a simple case of getting better offers elsewhere. They are two reputable figures in the aviation industry and leaving a recovery halfway hanging does not do well for their reputation, and even more strangely they left when they started to see the light at the end of the tunnel. If not mistaken the company was successfully cutting losses and projected to deliver profits in the near term.

If the government can be firm enough to decide to sell off the company, then I believe MH can rekindle its past glory. The market is there, the potential is there, it is a matter of executing the right strategy and reducing leakages to generate a profit.
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Old Apr 1, 19, 5:32 am
  #59  
 
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Interesting reading.
To partly add an experience to my own question, it does seem that MAS adjusts its schedules to the deteriment of their customers quite regularly.
(Iíve just been notified that my flight in two weeks time no longer operates on Weekends...last month my flight from Alor Setar was taken out of the schedules and subsequently my replacement flight the next day got binned too!)
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Old Apr 3, 19, 7:43 am
  #60  
 
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I still believe that there is alot of corruption/bad practices within the company. It needs to weeded out for it to survive.

The staff also have little incentive to perform (bad company culture) and the rotten apples probably are the ones remaining, enjoying their free tickets.
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