Friday, December 23, 2005

MAS The Flying Buffet

Category : Politics

MAS will soon be reporting 2nd quarter losses of RM260.0 million. The losses are actually close to RM300.0 million but MAS has been doing some creative accounting to make the Chairman Munir Majid look like he is doing his job. Certain 'write backs', 'overprovisions' etc are being used to make the red ink less.

Will this stop the rot at MAS ? Not likely. The company is in deep shit. The new incoming MD Idris Jala is supposed to arrive on Dec 1st - after the second qtr losses have been announced. That was the deal. But Munir is trying to delay announcing the 2 nd qtr losses and leave it to Idris Jala. This is not good feng shui for a new incoming MD - to start the day by announcing losses.

MAS is actually a flying buffet for the big guns. The company is owned by the Government. So it is not their own money. It is the Government's money. The big guns are ripping off MAS. The big guns are in just for the joyride. The Chairman Munir Majid - appointed sometime September last year - is ripping off MAS. Almost every weekend now Munir flies first class on MAS to London - for free of course. This is an abuse of his position as Chairman. He has a Mat Salleh wife in London who he is divorcing and maybe in the process of replacing so the free air rides to London come in handy.

Munir even has the dubious honour of making a day trip to London. He took the night flight from KLIA which arrives a.m. in London. Then he had a limousine with an English chauffeur pick him up in London airport and drive him to some condo. He kept the chauffeur waiting seven hours while he finished his 'business' in the condo. Then the chauffeur drove him back to the airport where Munir caught the evening flight back to KL. All this is paid using the taxpayers money. Anybody cares ?

MAS has its own company cars in London but obviously that is not good enough for Munir the top performing Chairman of the most successful airline company in Asia - now entering into its second quarter of multi hundred million Ringgit losses. Nothing less than a Rolls Royce or Bentley with orang putih chauffeur. After he became Chairman, Munir ordered office renovations totalling RM 841,000.00 for his office on the 34th floor of the MAS building in Jln
Sultan Islamil. This was at a time when MAS management already knew that MAS was going to report 1 st qtr losses of RM280.0 million in 2005.

Included in this RM841,000.00 renovation is kitchen equipment worth RM 33,515.00. Here are the details as per contractor's invoice :

Contractor : SI Corporation Sdn Bhd. 12 Jln Kenari 8, Bandar Puchong Jaya.
Batu 10, 47100 Puchong, Selangor DE. Tel : 8075 7788
3 MARCH 2005. RM 33,515.00

Contractor : Design Practice Consultants 3A, 48 & 50, 4th Floor, Block A,
Kelana Centre Point,
No 3 Jln SS 7/19,
47301 Kelana Jaya,
Selangor Darul Ehsan.
Tel : 7803 4328
Cert of Progress Payment No 3 24th March 2005
Contract Sum RM 760,000.00
Cert of Payment No 02
4th April 2005
Contract Sum RM 48,000.00 --------------------- Total RM 841,515.00

Well once you renovate your office for RM841,000 certainly you need some art works to grace the office. So Munir spent RM1,557, 000.00 (yes that is RM1.6 Million of taxpayers money, alright) buying art works.

First here are the details :

RUMAH SENI NUSANTARA SDN BHD 1st Floor, 17 Jln Telawi 3, Bangsar Baru,
59100 Kuala Lumpur.
Tel : 2284 2348

i. Sophia Vari (Coeur de L'Impenetrable ) RM 75,000.00
ii. Fernando Botero (Still Life With Violin) RM 1,140,000.00
iii. Fernando Botero (Still Life With Lobster) RM 342,000.00

---------------------- Total RM 1,557,000.00

Fernando Botero is a Colombian artist. All his paintings are a little gross because he 'blows up' or paints oversized depictions of his subjects especially humans. Here is an example :

Reproductions of his works can be bought for US25.00 (RM100.00) from - an Internet based art retailer. Surprisingly 'Still Life With Violin' is not listed anywhere in Botero's
collection. There is however a 'Still Life With Mandolin'. Have they got the name wrong ? Did they pay for the correct painting ? Here is a picture of 'Still Life With Mandolin'

One would assume that considering MAS' RM 540.0 million losses over two quarters, the new Chairman would at least try to balance his aesthetic tastes with a cheaper reproduction than buying the originals at over RM1.4 million. But MAS is a flying buffet. Everyone wants to feed off taxpayers money while the wool is still pulled over people's eyes. Not only the big guns but Senior Executives (AGM and above) have also been given an RM10.0 million car deal that will knock your socks off. Despite making such huge losses, MAS rewarded Senior Execs and implemented a scheme where it pays outright in cash for 75% of the purchase price of any car of
their choice for Senior Execs. And the remaining 25 % ? You guessed it. MAS gives a soft loan for the 25%. This is 100%.

And this is to reward Senior Execs for racking up losses of RM540.0 million for two consecutive quarters. Then MAS is also getting ripped off by poorly negotiated contracts especially with ticket agents. General Sales Agents hold monopoly franchises in certain countries to sell MAS tickets. But they often get unduly large discounts from MAS HQ in KL. Then because of these large discounts they are able to sell the tickets at two or three times mark up and make all the profit for themselves.

Why does MAS Sales give them such large discounts ? Some of the GSAs are also very friendly with MAS' Sales people. One of them has reputedly bought a condominium in KL for his buddy in MAS. Maybe this is one way of getting discounts. MAS is a flying buffet.

Then of course there is the famous food catering ripoff. Food is catered by Sky Chef, a company owned by the PM's brother. Needless to say, while MAS is making huge losses, Sky Chef is making good profits. Is this strange or is it not strange ? MAS has won some international award for Best Cabin Crew three years in a row. Someone has decided that MAS should also win the award for Best Airline Food !! So they launched 'Project Relish'. This is just another ripoff project. Lettuce from Cameron Highlands has been replaced with expensive, airflown lettuce from Australia. (No one stopped to think if Qantas has ever won Best Airline Food award serving Aussie lettuce)

Included in Project Relish is the redesign of their serving trays. Special design consultants have been engaged to redesign MAS serving trays. They would do better to ask their own air hostesses and stewards to design the plastic trays. But MAS is a flying buffet. Next we come to the 'con sultans' ripoff. Thus begins the story of Mazidah and Chris Andrews. Chris Andrews is a British consultant who was paid RM7,250 per day by MAS. Yes, this fellow was being paid more than the PM of Malaysia or more than the CEO of Sime, Maybank or anyone else.

In 5 days of work, Chris Andrews would earn from MAS RM36,250 which is about twice the annual salary of a graduate starting work in Malaysia. In slightly over one year, Chris Andrews has been paid over RM1.3 million in "con sultan" fees by MAS. These are the sultans of con. Who appointed Chris Andrews and what does he do ? Chris Andrews was pulled into MAS by one woman called Mazidah who is the head of Admin Support Services. For reasons that are becoming more clearer, she convinced MAS to hire Chris Andrews for RM7,250 per day to handle MAS' IT outsourcing.

What did Chris Andrews do ? He got MAS to outsource all their IT support to IBM. Since this outsourcing of IT support to IBM about 2 years ago, MAS' IT costs have spiralled about three fold. Here is how it happens. Now when a computer breaks down, MAS staffers can call a Help Desk. The Help Desk is manned by guess who ? Why IBM of course - the IT outsource ! IBM will then advise what to do - say call in a software guy (IBM of course), service the hardware (by IBM of course) or change hardware (by IBM of course).

The IT outsourcing to IBM is so complete that IBM also issues and signs the Purchase Orders on behalf of MAS to ITSELF for replacement parts ! ! As MAS' IT Outsource 'ConSultant' as well as being the major IT supplier to MAS, IBM is in the enviable position of being able to decide what and how much MAS should buy from itself. Ini bukan 'mesin niaga' tapi ini sudah jadi lagi satu kes 'melayu tak tahu niaga'. While MAS is making losses, no one has bothered to check how much money IBM is making this year from MAS ? When queried by the Board why IT costs have spiraled up, Mazidah convinced them that MAS was paying the cost of catching up with the latest IT technologies.

This is what Mazidah and her boyfriend Chris Andrews have been doing at MAS. Did I say 'boyfriend' ? Talk is other than slowing takeoffs at MAS, Chris Andrews and Mazidah have been 'taxiing down the runway' for a while. Mazidah who has three children, has separated from her husband to become Chris Andrews 'girlfriend'. After about two years of taxiing, she has either married Chris Andrews or is still in a take off mode.

Lately Chris Andrews has been given a permanent position at MAS. He is now Senior GM in charge of 'Strategy'. People are wondering how a RM7,250 a day IT consultant can become Head of Strategy Group ? Chris Andrews (Strategy) and Mazidah (Admin Support) are also the middle aged couple who sit in at MAS Management Committee meetings - this is the ruling elite in MAS - which is more influential than the MAS Board of Directors inhabited by clowns representing Khazanah, the MOF and other such outfits.

About two months ago, Chris Andrews (IT 'con sultan' turned Strategy Head) convinced MAS to raise their 1 st Class and Business Class fares by almost three times. From having the cheapest 1st Class Fares, MAS is now among the most expensive 1st Class airlines in the world. Understandably bookings have dropped with some flights having almost zero 1st Class passengers. More red ink for MAS. This company is not going to turn around soon. Chris and Mazidah are also savvy at PR. On Friday 25 th November 2005 they threw a lavish and exclusive welcome party for Idris Jala. Only the selected and the few from among the ruling elite in MAS were invited. Those outside the ruling elite were left out. But the party was held at company premises, using more of company funds.

Idris Jala is said to have asked the Govt's blessing to undertake a VSS scheme in MAS. This is a good move considering that the airline is overstaffed with over 23,000 employees when it only needs about 13,000 people to run. But paying off about 8,000 people is going to be expensive. But not to worry. The Second Minister of Finance has agreed to pour in more money for MAS. A sizeable soft loan from the Govt to MAS is in the works. Many experienced staff who have slogged faithfully in the rank and file in MAS for the past decades are getting fed up and just waiting for the VSS to make their exit.

This will leave MAS with even less experienced staff and more at the mercy of the 'con sultans'. Stay tuned for more MAS news.


Anonymous said...

Betul la..banyak cerita yg sama macam dalam artikel ni dah keluar kat TV, newspaper semua...habis la MAS

Yusuf Ali said...

Another info yang saya dapat dari sorang Forensic Accountant (macam CSI la) that MAS sebenarnya dah dicollapsekan sewaktu ownership Tajuddin Ramli lagi, di mana dia telah memanipulasikan segala aset MAS untuk kepentingan peribadi + kroni2. Contohnya, dia telah mendapat offer daripada Boeing... iaitu Boeing akan membeli semua kapal terbang MAS dan gantikan dengan kapal terbang + enjin baru (Free Of Charge)..untuk sedikit minority shareholding dalam MAS (dalam 10% - 20%). Apa Tajuddin buat? dia tolak offer tu dan tubuhkan sebuah syarikat dan beli semua kapal terbang MAS. Kemudian syarikat ni sewakan pulak pada MAS....sehingga sekarang. Meaning yang MAS TIDAK ADA kapal terbang, malahan menyewa daripada company Tajuddin ni. Berbeza dengan Air Asia...Air Asia OWNS semua kapal terbang dalam fleetnya dan jugak beli lagi 60 buah baru2 ini. Oleh itu, Air Asia boleh control cost ...kalau passenger tak ramai, mungkin beberapa kapal terbang boleh di'groundkan' sementara waktu dan maximize kapal terbang yang lain. MAS pulak kena bayar sewa bulanan untuk semua kapal terbangnya tak kira sama ada kosong atau penuh kepal terbang tu. No wonder MAS is losing and Air Asia is so profitable. MAS can be very profitable if people do not take it as a ride, but as a national pride. Itu yang Boeing nampak several years
back. I really think that the new CEO akan menghadapi banyak masalah
managing MAS ni, sebab banyak interference daripada politicians dan jugak top management people. Wonder why Datuk Fuaad Dahlan resigned? Because he had no real power. Serupa macam FAM jugak laaa...

Anonymous said...

betul la tu..tengok berita ni