Sky Bridges: Fortifying Sabah's Aerial Response During Calamities

As the spectre of unprecedented challenges looms on the horizon, Sabah stands at a critical juncture. When nature unleashes its fury, rendering roads impassable and communities isolated, our aviation industry emerges as the vital lifeline, weaving an intricate network of sky bridges that connect, sustain, and rescue those in peril.

While the intricacies of aerial disaster response may be highly specialized, this article aims to provide a cursory, yet comprehensive overview of the measures needed to fortify Sabah's aerial capabilities. By exploring these concepts, we hope to foster public understanding and engagement in this crucial aspect of our state's disaster preparedness.

Several areas are crucial to be had and managed during these times. Let’s explore them:

1. Infrastructure Preparedness
STOLport’s and Helipads - Sabah's unique geography necessitates a network of Short Take-Off and Landing (STOL) airports and strategically placed helipads. Regular maintenance and upgrades of these facilities are essential to ensure their readiness during emergencies. This includes maintaining runway surfaces in optimal condition, ensuring clear approach paths and upgrading navigation aids and lighting systems for improved all-weather capabilities

2. Fuel Depots
Establishing and maintaining strategic fuel depots throughout Sabah is crucial for extended emergency operations. This ensures that aircraft have sufficient fuel to conduct prolonged missions in affected areas.

3. Fleet Readiness
Diverse Aircraft Fleet - Sabah Air Aviation, the state's oldest general aviation company, should maintain a diverse fleet capable of handling various missions such as helicopters for accessing areas without runways, STOL aircraft for efficient transport between rural airstrips and consideration of amphibious aircraft for flood-prone areas.

4. Maintenance and Training
Implementing strict maintenance schedules and regular training programs for pilots, mechanics, and support staff is crucial. This includes simulated disaster response scenarios, training in adverse weather operations and cross-training personnel on different aircraft types for flexibility

5. Operational Readiness
Emergency Response Plans - Developing and regularly updating comprehensive emergency response plans tailored to Sabah's specific needs is essential. These plans should cover flood response protocols, landslide evacuation procedures and coordination with other emergency response agencies.

6. Inter-Agency Coordination
Establishing clear communication channels and protocols with other emergency response agencies, local authorities, and the military ensures seamless coordination during crises.

7. Technological Integration
Advanced Weather Forecasting - Investing in advanced weather forecasting technology improves decision-making and operational planning during unstable weather conditions.

8. Real-Time Tracking Systems - Implementing state-of-the-art tracking systems for all aircraft enhances safety and coordination during emergency operations.

9. Community Engagement
Rural Airstrip Network - Expanding the network of rural airstrips in collaboration with local communities improves access to remote areas.

10. Community Education Programs
Conducting regular outreach programs to educate remote communities on emergency procedures and how to prepare landing sites for helicopters in case of emergencies is crucial.

International Best Practices
Sabah can learn from international best practices in aviation disaster response by:

· Adopting SPHERE Standards for humanitarian aid, which specify minimum requirements for water, shelter, and healthcare during disasters.

· Implementing programs like Get Airports Ready for Disaster (GARD) to assess and improve airport capacity for handling humanitarian aid influx.

· Utilizing night vision technology and all-weather aircraft to extend operational capabilities.

Fortifying Sabah's aerial response to calamities requires a multifaceted approach that encompasses infrastructure preparedness, fleet readiness, operational planning, technological integration, and community engagement. By implementing these strategies and learning from international best practices, Sabah can significantly enhance its ability to provide rapid and effective assistance to interior regions during emergencies, regardless of the challenges posed by weather or terrain.

The aviation industry's role in disaster response goes beyond immediate relief efforts. As highlighted by the United Nations Humanitarian Air Service, air operations are vital in reaching remote and challenging locations, delivering aid workers, food, and medical supplies. Sabah's aviation sector must be prepared to play this crucial role, serving as a lifeline for affected communities long after the initial crisis has passed. By investing in these preparedness measures, Sabah can ensure that its aviation industry stands ready to build "sky bridges" – vital connections that bring hope, aid, and recovery to communities in their time of greatest need.

Sky bridges and aerial response can enhance disaster relief operations in Sabah through:

1. Enhanced Efficiency of Disaster Relief Operations:

2. Utilization of Aerial Reconnaissance in Disaster Scenarios:

3. SINPDEC's Role in Coordinating Disaster Response:

In Brazil, which has a system similar to what Sabah might implement:

· The National System of Civil Protection and Defence (SINPDEC) coordinates disaster response operations at the state level.

· Each State Secretariat of Civil Protection and Defence is responsible for planning, coordinating, and executing civil protection and defence actions.

· They provide necessary resources and equipment for response operations and define procedures for using helicopters in logistical air transport activities during disasters.

To fortify Sabah's aerial response during calamities, it would be beneficial to:

· Invest in infrastructure like STOLport’s and strategically placed helipads.

· Maintain a diverse aircraft fleet including helicopters, STOL aircraft, and possibly amphibious aircraft.

· Implement comprehensive training programs for personnel.

· Develop detailed emergency response plans and improve inter-agency coordination.

· Integrate advanced technologies like real-time tracking systems and improved weather forecasting.

· Engage with local communities to expand the rural airstrip network and educate on emergency procedures.

By implementing these measures, Sabah can create effective "sky bridges" that provide crucial support during disasters, enhancing its ability to respond swiftly and effectively to calamities in remote and challenging areas.

In the face of increasingly unpredictable natural disasters, Sabah's aviation industry stands as a critical lifeline for affected communities. Our past experiences have taught us valuable lessons about the extensive scope of operations required to meet such challenges effectively. As we confront the realities of climate change, we must anticipate that future calamities may surpass the scale of what we've encountered before. This calls for a comprehensive approach that goes beyond the traditional boundaries of disaster response.

Specialized Knowledge and Experience
The cornerstone of our preparedness lies in the wealth of specialized knowledge and experience accumulated over years of operations. This expertise, held by our frontline responders and aviation professionals, is invaluable in navigating the complex scenarios that disasters present.

Community Involvement
It's crucial to recognize that disaster preparedness and response is not solely the responsibility of those on the frontline. As citizens of Sabah, we are all affected by these events, directly or indirectly. Therefore, it's imperative that the entire community becomes involved in and supportive of our preparedness efforts.

Expanding Our Scope
Given the potential for more severe and frequent disasters due to climate change, we must expand the scope of our operations beyond what we've previously encountered. This means:

1. Enhancing our aviation infrastructure to handle increased demands

2. Broadening our training programs to cover a wider range of scenarios

3. Strengthening community education and involvement in disaster preparedness

4. Investing in cutting-edge technology for improved forecasting and response

5. Fostering stronger inter-agency and community partnerships

Forging Sabah's Resilient Future
By sharing the burden of preparedness across all sectors of society, we can build a more resilient Sabah. This collective effort will provide not just comfort and assurance to our communities, but a robust foundation for our state's future. As we stand at the crossroads of challenge and opportunity, we must recognize that our strength lies in unity and shared purpose.

Our aviation industry stands as a beacon of hope, ready to bridge the gaps when disaster strikes. But true resilience goes beyond infrastructure – it resides in the hearts and minds of our people. Each citizen, from the bustling cities to the remote villages, has a crucial role to play. Whether it's supporting our aviation sector's preparedness initiatives, actively participating in community disaster drills, or simply staying informed and ready to lend a helping hand, every action contributes to our collective safety net.

As we move forward, let us embrace this shared responsibility with vigor and determination. Our commitment today will shape the Sabah of tomorrow – a state not just prepared for calamities, but one that thrives in the face of adversity. By fostering a culture of preparedness, we're not just building "sky bridges"; we're weaving an unbreakable network of support that spans our entire state.

Together, we can ensure that our response mechanisms remain strong, agile, and ready to serve when they're needed most. From the coral-fringed coasts to the mist-shrouded peaks of Mount Kinabalu, every corner of our beloved Sabah will stand resilient, knowing that behind each challenge lies the unwavering spirit of our people.

Let this be our pledge: That in times of calm, we prepare; in times of crisis, we unite; and always, we stand as one Sabah – ready, resilient, and resolute. For in our shared commitment lies not just our strength, but the very essence of who we are as a people. Together, we will not just weather the storms but emerge stronger, writing a new chapter of resilience in the rich tapestry of Sabah's history.

MALAYSIA AIRLINES- A MODEL TO FOLLOW

PIA to be upgraded on Malaysian Airlines model: Nawaz irked by very poor PIA''s show

September 11, 2013

MUSHTAQ GHUMMAN

Prime Minister Nawaz Sharif has expressed dissatisfaction over the performance of Pakistan International Airlines (PIA) and directed that the national flag carrier be upgraded on the pattern of Malaysian Airlines. He also directed that the money being spent on corruption-tainted PIA be diverted to deal with power crisis. The Prime Minister gave these directives while chairing a special cabinet meeting on Tuesday.

In his remarks he said that economic development was the only way forward but terrorism and extremism were badly hampering the economic turnaround in Pakistan. He said the country was passing through difficult times and we were evolving a consensus strategy to sort out all issues confronting the nation.

He said that during his previous tenures as the Prime Minister of the country his government followed the policy of free market economy which led to faster economic growth. "We have again started with the same policy with an enlarged vision and increased vigour," the Prime Minister added.

The cabinet discussed good management practices to be adopted by the government sector to make it more effective, efficient and accountable. The Prime Minister said that PIA was incurring Rs 3.3 billion monthly losses due to its inefficiency, corruption and malpractices.

"At present we are only dealing with day to day crisis at PIA. Taxpayers'' hard earned money is being paid to PIA to bail it out of economic crises and sustain itself, and this situation cannot continue any more," the Prime Minister added. He said that this money should be invested in power sector and development of other resources instead of sustaining an inefficient PIA. He said that over-employment and low quality services have led to the downfall of the national airline, which once the best in the world. He directed the PIA management to provide a detailed briefing on the present situation of PIA and bring about concrete proposals to reform PIA.

Senator Dato'' Siri Idris Jala, Minister in Malaysian Prime Minister''s Office and CEO Performance Management and Delivery Unit (PMDU), Government of Malaysia attended the Cabinet meeting on special invitation of the Prime Minister. He shared his experiences of Malaysian Economic Programmes and Government Transformation. He informed the Cabinet that Malaysia transformed its economy by devising short term plans within the framework of its larger strategic programmes, and set time-lines for achieving those plans by giving key performance indicators.

The public as well as private sectors were involved, through well defined process, in devising these policies and making them achievable, he added. He informed the Cabinet the procedures were made simple to attract investors, both foreign and domestic. The Prime Minister said that Government of Pakistan was following an economic model whereby key development sectors had been identified and prioritised. Moreover, systems were being simplified. The Prime Minister maintained that his government had prioritized economy, energy and modernising infrastructure all over the country and investment in power sector. He added that a team of experts was working on the reforms action plan and Pakistan could learn from the success stories of Malaysia and replicate the same, he added.

The Prime Minister said that his government looked forward to working closely with Malaysian government. The Prime Minister also recalled his association with Mahatir Muhammad, the then Prime Minister of Malaysia, and said that they had extensive discussions on economic reforms and shared experiences. The Prime Minister said that a high-powered delegation would soon visit Malaysia to further strengthen co-operation particularly in the economic fields between the two countries. 

MASKARGO AND FORMULA 1

The Petronas Syntium Team’s Mercedes-Benz SLS AMG GT3 car is offloaded from a MASkargo flight at KLIA for the 2013 Petronas Motorsports Demo Run that took place in Kuala Lumpur earlier this month.
The event was one of the highlights in the build-up to the 15th edition of the 2013 Formula One Petronas Malaysia Grand Prix that was held at the Sepang International Circuit at the weekend. 
MASkargo sealed a deal with Petronas for the exclusive rights as preferred air cargo partner for the demo run. The carrier transported the Mercedes Petronas Formula One Team’s demo F1 cars and equipment. 
“This is an amazing global opportunity to align two world leading brands of different industries. The cutting-edge technological standards and worldwide reach of Formula One go hand in hand with MASkargo’s business direction,” said Mohd Yunus Idris, CEO of MASkargo.

Air Turbulence

Published: Friday May 11, 2012 MYT 4:28:00 PM

Rafidah: AirAsia, AirAsia X, MAS collaboration crucial

PETALING JAYA(Bernama): All airlines in the country must be able to face challenges when the Asean open sky policy comes into force in 2015 and therefore, collaboration efforts between AirAsia, AirAsia X andMalaysia Airlines (MAS) is important, said AirAsia X chairman Tan Sri Rafidah Aziz.

"If airlines do not strengthen now, through what ever way, there will be problems. This is why AirAsia and AirAsia X is willing to continue looking at possible collaboration with MAS," she said on Friday.

She emphasised that the collaboration had nothing to do with the share-swap.

"It is about cutting cost so that we can pass the efficiencies to consumers. We have agreed at the board level to sign a memorandum of understanding (MOU) to continue pursuing this collaboration as long as it does not violate any anti-trust law globally and bring benefits to us," she told a press conference after the Malaysian National Co-operative Movement (Angkasa)'s 41st celebration.

Following the reversal of the share swap deal, AirAsia, AirAsia X Sdn Bhd and MAS, have entered into a supplemental collaboration agreement (SA) to explore areas of mutual-need to realise savings and boost efficiencies.

The SA would focus on specific areas of collaboration while continue to comply with all relevant anti-trust laws.

Under the SA, the airlines have identified key areas for collaboration, which would result in efficiencies and cost savings, which among others, includes procurement, aircraft component repairs, training initiatives and technical and operational efficiency.

Additionally, the airlines will also continue working to further identify and evaluate opportunities to collaborate on a broad range of areas both at operational and strategic levels.

To push forward with the collaboration initiative, the three parties also signed a MOU to cooperate on two initial areas, joint procurement and aircraft component maintenance, support and repair services.

AIRLINK Bimp-Eaga

Palawan and Balikpapan next on MASWings' list

Published on: Thursday, May 10, 2012

Kota Kinabalu: MASwings plans to fly two new routes, namely Kota Kinabalu-Puerto Princessa, Palawan and Kuching-Balikpapan, under its second phase of expansion to the Brunei, Indonesia, Malaysia and Philippines East Asian Growth Area (BIMP-EAGA) region.

This is apart from upgrading the existing Tawau-Tarakan thrice-weekly flight services to daily services effective July 1 and introducing a Coral Triangle Charter Flight for divers to world-class dive spots in the State, Philippines and Indonesia within the Coral Triangle (Celebes Sea).

These follow the encouraging response received from its first three destinations in BIMP-EAGA, namely Tawau-Tarakan, Kuching-Pontianak and Kota Kinabalu-Bandar Seri Bengawan, where altogether it has recorded a load factor average of 60-65 per cent. Its CEO Datuk Captain Mohd Nawawi Haji Awang, who announced this, said they expect to start flying the new Kuching-Balikpapan route, which would be thrice weekly, by the end of October.

"We are in the process of seeking approvals and clearances from the Philippine Government for the KK-Puerto Princessa route Éif everything goes well, we plan to start this new route by the end of October," he said, adding they are all very excited with these new developments.

They are also looking at aircraft utilisation aspects and adjusting timing and so on in preparing for the changes to the Tawau-Tarakan flight service schedules. The company might also increase the number of its aircraft if the need arises.

Mohd Nawawi said this at a press conference in conjunction with the MASwings BIMP-EAGA Golf Challenge 2012 at the MAS administration building in Kota Kinabalu International Airport (KKIA), Wednesday.

He said the Coral Triangle Charter Flight plan is still at a proposal stage, adding MASwings needs to have collaboration with the Malaysian, Indonesia and Philippines tourism authorities in introducing this package for divers to come to the world-class dive spots within the Celebes Sea.

"We plan to have scheduled charter flights for divers at the three world-class diving spots, each in the respective country, under one package," he said, adding they plan to have this on a weekly basis.

According to the plan, divers would first fly to Sabah where they would be brought to Sipadan island and after three to four days they would proceed to Davao in Philippines and then to Manado in Sulawesi, Indonesia.

"This is very much in the planning stage with the Sabah Tourism Board (STB) leading the processÉwe have set a six-month timeframe for this to materialise," he said.

The tourism authorities of the other countries concerned are also excited about the plan, he said.

Mohd Nawawi also commented on MASwings achievement on being named the Best MH Auxiliary Business Subsidiary Platinum Award winner Tuesday, outshining the other Malaysia Airlines business subsidiaries.

"This is something the Sabah and Sarawak communities can reflect upon because it shows that the company which has nearly 100 per cent of its staff from Sabah and Sarawak can really make it happen," he said, adding it also shows that MASwings is truly the community airline for the people of Sabah, Sarawak and BIMP-EAGA.

The company has 1,300 staff, of whom about 90 per cent are from Sabah and Sarawak, and Mohd Nawawi also pledged to bring in jets in its fleet of aircraft once its second phase of expansion has successfully achieved its objective by next year.

MASwings carried over 20,000 passengers within several months of flying to the BIMP-EAGA destinations.

Meanwhile, Mohd Nawawi said some 200 golfers from the BIMP-EAGA region are expected to take part in MASwings' inaugural golf tournament that will tee-off at Eastwood Valley Golf and Country Club Miri, Sarawak, on May 27.

Besides reinforcing its presence and entrance into the BIMP-EAGA region and marking the beginning of MASwings' involvement in staging and organising an event of grand scale in the said region, the friendly tournament is also for the Miri city's anniversary celebration.

The tournament provides three different categories - open individual, team event and VIP/guest category, he said, adding champions of the tournament will carry MASwings BIMP-EAGA Golf Challenge 2012 trophies, MASwings hole-in-one prizes which include 10 business class tickets on MASwings destinations, lucky draws and novelty prizes.

He said MASwings has also reintroduced its Golf Escapade promotion that covers extensive prestige packages for golfers all over the world.

It is to help promote golf tourism within the region.

The package will create the opportunity for business golfers to travel and play golf at an attractive price within Sarawak, Sabah, Brunei and Indonesia.

Customers would enjoy a return flight, hotel accommodation for three days two nights or two days one night stay with daily breakfast and return transfer.

Interested golfers can make their booking online via MASwings official website www.maswings.com.my.

The booking options are made convenient for golf enthusiasts when selecting their preferred courses, destinations and hotels.

AVIATION AND RISING FUEL PRICES

Chart of the Day: The Real Cost of Rising Gas Prices
by Adam English, Associate Editor, Inside Investing Daily

If you think high gas prices are eating into your bottom line, try running an airline.

In 2012, the fuel bill for airlines is expected to be around $200 billion. That would account for more than 30% of total operating costs.

In the end, we all must pay the price.

By comparing oil prices to airline fares we can get a good idea of how the average passenger is getting hit by rising fuel costs.

A 12.1% increase in a six-month period last year was painful enough... but with oil prices predicted to stay above $100 per barrel throughout 2012 and a 4% rise in fare costs since the beginning of 2012 it will only get worse.

Southwest Airlines, the most consistently profitable U.S. carrier, has already announced that its first-quarter profits will be wiped out by rises in fuel costs.

As oil approaches $120 per barrel, airlines have no choice but to start making drastic changes to their businesses.

Airlines are already purchasing more efficient planes as quickly as their revenue allows. Routes are being dropped and passengers have fewer direct flights to anywhere except a major hub.

With crude prices creeping up past $107 per barrel, we can expect to pay through the nose for less-convenient routes well beyond the summer vacation season.

The only other possibility is a new round of airline bankruptcies.

AIRCRAFT PRODUCTION

Airbus flies ahead of Boeing in 2011

Airbus retained its position as the world's leading builder and seller of commercial jets last year, but acknowledged that 2012 will be a different story as the duopoly in the global market that the European plane maker shares with US rival Boeing Co becomes more balanced, reported the Wall Street Journal.

Thanks to a steady increase in its production rates, Airbus delivered a record 534 aircraft of more than 100 seats last year, a 4.7 percent rise from 510 in 2010 and 12 percent more than the 477 planes that Boeing produced, Airbus chief executive Tom Enders told a press conference.

The wholly-owned division of European Aeronautic Defence & Space booked 1,608 gross orders last year, marking a new industry record for annual orders, and putting in the shade Boeing's 921 orders. These numbers translate into a global market share of 64 percent for Airbus, compared with 36 percent for Boeing. This was mirrored by the result for orders excluding cancellations, with Airbus racking up 1,419 net orders compared to Boeing's 805.

In revenue terms, Airbus also came first. Its gross orders were worth US$168.8 billion, while net orders came in at $140.5 billion.

EADS "is a growth story and a cash machine" thanks to the surge in commercial-aircraft orders and higher prices, the aero-defense group's chief executive Louis Gallois said.

EADS revenue in 2011 was "nicely" above the 2010 level of US57.89 billion thanks to increased pricing and the surge in order intake at Airbus, Gallois said. EADS will see a "significant" rise in profitability in 2012, he added, helped by reduced losses from the Airbus A380 programme and stepped-up production.

EADS stock has risen 24 percent in the past year, the best performer among component stocks of the CAC-40 benchmark index.

However, the surge in orders as airlines rushed to buy a new fuel-efficient version of the A320 medium-haul jet will subside in 2012, Airbus chief operating officer, customers, John Leahy said.

Leahy said that for now there's no problem with aircraft financing even though some providers, notably French ones, have pulled out of the business. "It is tighter in 2012 than in 2011, but we think we'll be able to get through," he said.

More than half of this year's deliveries are assured of financing, he said, some with debt financing, some with airlines' own cash and some under sale and lease back schemes.

"The situation with French banks is that they are having some difficulty raising US dollars," he said, "but other banks around the world don't have that same problem."

Even as demand slackens this year, Airbus and Boeing will continue to dominate the market for large jetliners, Leahy said.
"Our goal is to remain in a stable duopoly with a market share of between 60 percent and 40 percent and I predict that in 2012 we will be down around 50 percent, probably even lower," he said.
Boeing is expected to keep pulling in orders for the 737 MAX, a re-engined version of the jet that's a workhorse for many low-cost airlines. Leahy said order intake this year is likely to be between 600 and 650 new orders, a steep drop from 2011.

With a year-end order backlog of 4,437 aircraft compared to Boeing's 3,771, Airbus reckons that it's fairly well shielded from any potential downturn in global air traffic that might accompany an economic slowdown and encourage airlines to hold off expanding or renewing their fleets. The current backlog represents more than eight years of production at current rates, but Airbus is stepping up output to reduce the long lead times between orders and deliveries. At the same time, Airbus has a policy of over-booking its delivery slots so that it doesn't end up with unsold aircraft on the tarmac.

Airbus said it's planning to increase deliveries in 2012 to around 570, mainly due to rising production of the fast-selling A320 family of medium-haul, single-aisle jets. Just over a year ago, Airbus decided to launch a re-engined version of the A320 that the company claims will offer 15 percent fuel savings compared to the current version. The new catalogue addition, called the A320neo, resulted in 1,226 firm orders last year, or three-quarters of total order intake.

Airbus delivered 26 of its A380 super jumbos last year and took in 29 orders. Leahy said 30 A380s should be delivered this year, and he's aiming to match that figure with fresh orders. He said customers are asking Airbus to work on a stretched version of the double-decker A380, which can already carry up to 850 passengers. He said a longer plane could add an extra 100 to 150 seats. Airbus is currently making A320s at a rate of 38 a month and plans to raise production to 42 a month by the end of this year.

Leahy cast doubt on Boeing's claim that it has over 1,000 firm orders and commitments for the 737 MAX, saying most of the commitments Boeing refers to seem to be non-binding "letters of possible interest" signed by airlines that say they like what they see and might buy it at some point.

"They haven't given prices to these people. They haven't given hard delivery slots or performance data—any money that was put down is totally refundable," Leahy told a group of reporters.

While Airbus took 70 percent of the market segment of smaller 100 to 200-seat aircraft, Boeing took three-quarters of the global market for wide-bodied jets with between 275 and 375 seats, thanks to its popular 777 jetliner and new 787-9 plane.

Airbus' rival in this category, the new A350-900, is due to enter into service in 2014, with a stretched version set to come to market by 2017.

BOEING STRUGGLE TO KEEP ORDER

MASSIVE ORDER

BY DAVID KESMODEL

SEATTLE—Boeing Co.'s production struggles with its 787 Dreamliner taught it to regularly stress-test suppliers, a skill that is coming to the forefront as it tackles a mountain of orders for its best-selling 737 jets.

The company's comprehensive reviews are critical to its effort to mount one of its biggest production increases in years. Chicago-based Boeing aims to boost output by about 60% in the next three years—or nearly 300 more jets a year. After winning a series of big contracts, it is sitting on a staggering backlog of 3,500 commercial jets, valued at more than $270 billion.

MAS STAFF UNION UNHAPPY

No to MAS downsizing
 Posted on 29 December 2011 - 05:41am

KANG SIEW LI

PETALING JAYA: Malaysia Airlines’ (MAS) unionised staff are unhappy over a potential plan by its management to downsize the workforce as part of the struggling national carrier’s turnaround plans.

MAS Employees’ Union (Maseu) president Alias Aziz told SunBiz that MAS management had indicated its intention to reduce its workforce during a Dec 16 meeting chaired by MAS group CEO Ahmad Jauhari Yahya and his deputy Mohammed Rashdan Mohd Yusof, which was attended by representatives of Maseu, Malaysia Airlines Pilots’ Association, Airline Workers Union of Sarawak, Air Transport Workers Union of Sabah and MAS Executive Staff Association.

“However, the management did not say how many employees will be affected, although it was told that only 3,000 staff were needed for the airline’s short haul operations which include Firefly and the new yet-to-be-named regional premium carrier (that will be launched by mid-2012),” said Alias on Wednesday.

MAS also wants its employees to first resign from the airline if they opt to join the new regional airline.

Right now, MAS has about 20,000 workers.

theSun had reported on Dec 16, quoting sources, that about half of MAS’s total workforce will be affected by the airline’s business plan, which involves cutting money-losing routes, deploying new aircraft, managing costs and spinning off ancillary businesses.

“We (union members) are not happy with the latest business plan for MAS. We are concern about the impact of cuts on MAS’s unprofitable routes, closing of some stations overseas and spinning off its subsidiaries which may inevitably lead to staff cuts.

“This is not the way to turnaround MAS,” said Alias.

“This (possible job cuts) also goes against Prime Minister Datuk Seri Najib Razak, who had in a meeting with me (as Maseu president) in September gave an assurance that there would be no job cuts nor voluntary separation schemes (VSS) to follow the latest reshuffle at the airline,” he added.

Alias said the union members also disagree with the MAS-AirAsia share swap as they see AirAsia benefiting more from the deal, not MAS.

When contacted on Wednesday, a MAS spokesman said any move to redeploy or cut its workforce is “still a work in progress and we will make announcements when details are finalised”.

“These are still in planning stages. We are now engaging staff through a series of meetings for them to understand our plans and hear their feedback and questions.

“We will engage all stakeholders including the media at the right time when we have the detailed information,” he said.

AIR TRAVEL OUTLOOK 2012

OSK maintains ‘overweight’ call on aviation, logistics sectors
 Posted on 29 December 2011 - 05:41am

PETALING JAYA: Global air travel growth for 2012 is likely to moderate amid economic uncertainties over Europe’s sovereign debt crisis and the US’s anaemic economy, says OSK Research.

Its transport analyst Ahmad Maghfur Usman expects passenger growth for 2011 to come in at 10-12%.

“However, we see Malaysia as being insulated from a cyclical downturn in passenger travel given our expectations of a stronger GDP growth of 5.2% on the roll-out of more Economic Transformation Plan projects. The surprise Q3 GDP numbers were driven by strong private consumption growth.

“This, and the fact that Malaysia has a high penetration of low-cost carrier (LCC) travel, reinforces our view that air travel will remain resilient and benefit both AirAsia Bhd and Malaysia Airports Holdings Bhd (MAHB),” said Ahmad in a report on Wednesday.

“With AirAsia reaping more profit from lower jet fuel prices and MAHB seeing an upside from a recent tariff hike, we also see both companies gaining from down-trading when cheaper fares stimulate spending on ancillaries and at airports.

“However, we are sceptical of Malaysia Airlines (MAS) as we feel that AirAsia stands to gain more from the (MAS-AirAsia) tie-up in the immediate term,” he added, reiterating an “overweight” call on the aviation sector.

Ahmad is maintaining his “neutral” stance on the shipping sector, as the global vessel supply glut could worsen with the upcoming economic woes.

“We hold to our view that the worst is not over and a first step towards solving a long-term problem is desperately needed. Our head of regional research for transport opines that there must be a resolution to the industry’s long-term problems arising from overcapacity, over-ordering and over-production of ships despite the short-term recovery in the Baltic Dry Index.

“Ironically, we still think that any rebound now could be negative for the main shipping sub-sectors (bulk, tanker or container) as this can create a false sense of security for owners and operators, who could be tempted to postpone any decisive action needed to improve profitability. On this space we are more positive on MISC Bhd, which will see losses to be confined to the petroleum tanker segment after exiting from the liner business,” said Ahmad.

Meanwhile, Ahmad has an “overweight” call on the logistics sector as he believes that local freight forwarders will continue to perform well going into 2012, bolstered by new MNC contracts and healthy economic developments on the home front.

“Recently secured contracts from well-established consumer companies such as F&N, Coca-Cola Inc, British American Tobacco, Nestle and Pepsi.Co ensure that the freight forwarders’ sales volume would not be significantly affected by poor economic conditions as well as secure their earnings going forward.

Malaysia Airlines Cut Losses

Malaysian Airline cuts unprofitable routes to stem losses 

Malaysian Airline System will cut several unprofitable routes in a move that could help the national flag carrier save between US$68 million and $94 million in 2012, reported Dow Jones Newswires.

The airline said it would withdraw from routes to and from Surabaya, Johannesburg and Rome, among others, which account for almost 12 percent of passenger capacity, in stages beginning from January 6.

The move is expected to have "minimal impact" on its cargo operations, it said, but didn't elaborate.

"We also hope to return to these markets after we have stabilised our business," said Malaysian Airline chief executive Ahmad Jauhari Yahya.

The move follows last week's cost-cutting measures unveiled by the airline aimed at turning around the company and improving profit by between $350 million and $472 million in 2012.

AIRASIA - Creating Waves Yet Again

Saturday December 10, 2011

Star, AirAsia in content partnership

PETALING JAYA: Star Publications (M) Bhd and AirAsia Bhd are teaming up to bring customers on AirAsia flights content via various distribution channels in the coming months in a partnership for future growth.

The initial collaboration was formalised via a letter of intent signed on behalf of Star Publications by the company’s executive deputy chairman,Datuk Vincent Lee, while group chief executive officer (CEO) Tan Sri Tony Fernandes signed on behalf of AirAsia.

The signing paves the way for an alliance leveraging on the strength of the respective parties in which the first opportunity would be a content-sharing proposition.

AirAsia would distribute the content from Star Publications through the airline’s channels such as in-flight entertainment, online, offline and Tune properties.

Fernandes said following the signing ceremony that there were huge opportunities in providing new forms of entertainment for the airline’s customers and hoped the collaboration would be firmed up by mid-January.

This is funny: (From left) Ho, Lee, Fernandes and Star Publications executive director and group chief editor Datuk Seri Wong Chun Wai with a copy of Star’s coffee table book ‘Hotshots’.

“We’ve a great distribution outlet and, at 36,000 feet, there’s nothing better to do,” he said, adding that this partnership would eventually encompass other content ideas including leveraging on social networking.

Lee said the collaboration brought the two great brands together with opportunities to also explore content distribution via other channels. “We’re not just going to have content in the sky but also in airports through electronic signboards,” he said.

Meanwhile, Star Publications group managing director and CEO Ho Kay Tat said the collaboration was the result of discussions held between the two companies several weeks ago on how best to leverage on each other’s strengths.

“I’m very happy that we’re agreeing to do something together. This partnership will be good for both companies and we’re bringing something good to the table,” he said.

In a statement to Bursa Malaysia, Ho said Star Publications produced quality content on a daily basis which cut across all the platforms and channels that the company offered.

“With this collaboration, the content we offer is able to reach new audiences and enrich the end-user experience for our strategic partners,” he said.

The initial collaboration only touched the surface of the opportunities both companies had with the partnership, Ho said, adding: “From the medium to long-term perspective, we will be looking at a fresh perspective on traditional collaboration models that move beyond information exchange to a more strategic alliance for long-term growth.”

Star Publications recently embarked on an expansion programme with the acquisition of Li TV Asia Sdn Bhd, Capital FM, a 4.99% stake inCatcha Media Bhd and Red Tomato, a free Chinese-language weekly newspaper.

In the footstep of Idris Jala - tough call

Thursday December 8, 2011

CEO sets in motion business plan to bring airline to profitability by 2013

By B.K. SIDHU
bksidhu@thestar.com.my

PETALING JAYA: Malaysia Airlines (MAS) will cut unprofitable routes, spin off its ancillary units, explore joint ventures with other airlines and launch a regional carrier by second half of next year in a bid to return to profitability by 2013.

The airline, which will focus on offering premium air services, targets a net loss of RM165mil for 2012. However, by 2016 it hopes to report a net profit of RM900mil.

About 40% of MAS' network is unprofitable but beginning next year it would cut capacity by 12% and save about RM302mil by suspending flights to Dubai, Cape Town, Johannesburg, Buenos Aires and some European cities.

Ahmad Jauhari: ‘We are very deep in crisis. Our cumulative losses until the third quarter amounted to RM1.25bil and we do not see any improvements in the fourth quarter.’

It would focus on serving the premium market in Asia where there is growth despite the intense competition from low-cost and premium carriers that are also adding capacity in the region.

“We are very deep in crisis. Our cumulative losses until the third quarter amounted to RM1.25bil and we do not see any improvements in the fourth quarter. MAS needs to make hard and unpopular decisions simply to survive. We hope this plan will set the course straight,” MAS groupchief executive officer Ahmad Jauhari Yahya told a press conference yesterday. The new business plan that he unveiled yesterday focused on reversing the airlines' fortunes and outlined steps to sustain its performance.

He cited the loss of focus of the premium segment, declining product quality, an ageing fleet as reasons why MAS was in a loss-making situation. The airline's overall ranking in the industry had also dropped but with the new business plan, there would be greater focus to win the customers back.

Ahmad Jauhari said the series of actions that the airline would take next year was expected to generate an improvement of between RM1.1bil and RM1.5bil in the profit impact for the group.

On the new premium carrier - not Sapphire he said it would begin operations in the second half of 2012 with a fleet of 45 B737-800 aircraft. It would fly to cities in South-East Asia and Greater China while MAS would continue to serve long-haul flights. It planned to add frequency to cities like Manila, Jakarta and Tokyo.

This is the fourth time in a decade that MAS is being restructured, though the theme this time is be a leaner airline, but some analysts attending the briefing were unimpressed.

“It seems their consultants did the work for them and we are disheartened by the fact that the management only aspiresfor RM900mil net profit when benchmarked against first-tier airline, they should be aiming for RM2bil to RM3bil,” said an analyst.

A Maybank Investment analyst added: “It is a strategic mistake to set up a new airline when they could service the short-haul routes using the MAS brand name. Why the need to gamble when there is no guarantee of immediate success? However, what is convincing is that they are suspending flights to unprofitable destinations.”

MAS has also begun discussions with AirAsia and AirAsia X to cooperate on fuel-purchasing, maintenance, training and ground-handling, which could save the national carrier RM100mil annually.

On the rationale to spin the ancillary units engineering, pilot training/safety academy, cargo and ground services Ahmad Jauhari said it was to allow strategic investors to take a stake in them so that the units could grow.

The airline will take delivery of 23 new aircraft including five A380 in 2012 and that would help the airline save RM392mil in cost since the new aircraft are more fuel efficient.

The airline also needed to raise RM12bil to pay for the new aircraft it had ordered till 2014 and it might finance them via debt and Islamic bonds but MAS deputy CEO Mohd Rashdan said the airline would not opt for a cash call.

MAS has cash reserves of RM1bil now but it expects return of aircraft deposits to help it ride through next year.

“We would not deny we are in talks with Qantas as these days you have to work with other airlines but the discussions are still at an exploratory stage,” he said, adding that: “We are exploring the possibility of joint ventures with (other) partners in order to serve multiple markets together, while reducing the financial risks of going alone.”

The airline will also join the oneworld air alliance by September 2012.

Asked if the MAS workforce was behind him in the push for better fortunes, Ahmad said: “They understand the gravity (of the problem) and are horrified by the losses, but they also understand that painful actions are necessary.”

Asked if there would be job cuts, Ahmad said it depended on all the spin-offs but a (voluntary separation scheme) was the last option.

There is also apprehension towards the comprehensive collaboration framework from with AirAsia.

Asked if the CCF was really necessary, he said “it makes it easier with the CCF.''

MAS plan lacks critical details?

Friday December 9, 2011

Analysts: MAS plan lacks critical details

By SHARIDAN M.ALI
sharidan@thestar.com.my

PETALING JAYA: While analysts are generally positive about whatMalaysia Airlines (MAS) aspired to achieve in its turnaround plan, they also voiced concern over the lack of critical detail on execution of the plan in the midst of challenging market environment.

Maybank Investment Bank (IB) said the business plan document was a fairly good “academic” paper but it lacked details on execution.

“We feel that this is the key factor that investors want to hear in order to be convinced about the business turnaround story,” it said in a report.

Maybank IB was also concerned about the risk of MAS starting a new airline for regional services.

“MAS will start a new regional airline focused on the premium segment by second half of 2012 and it will gradually dissipate to become a long-haul airline only as its regional services are taken over by the new airline.

File picture shows MAS and AirAsia aircraft at Kuala Lumpur International Airport. - EPA

“Although the management asserts that the new airline would have significantly better quality and services, we see a risk as MAS has a strong brand name with proven quality and service.

“For an airline that aims to turnaround and stem losses, this is not a suitable time to take start-up risk, in our view,” it said.

Nevertheless, Maybank IB applauded the move that MAS would cut capacity or available seat per km (ASK) by 12% in 2012, on loss making routes such as Buenos Aires, Dubai, Cape Town and Johannesburg. “The move was overdue for decades as these routes have no chance to make money. This move is also a confidence booster because it shows that the management is bold and clear minded in its cost cutting approach,” said Maybank IB.

On Wednesday, troubled the airline unveiled its third edition of business turnaround plan that entailed cuting unprofitable routes, spining off its ancillary units, exploring joint ventures with other airlines and launching a regional carrier in a bid to return to profitability by 2013.

The airline, which would focus on offering premium air services, targeted a net loss of RM165mil for 2012. However, by 2016 it hoped to report a net profit of RM900mil.

Meanwhile, OSK Research said the plan shed some light on the strategies lined up to turn the national carrier around by cutting capacity, wooing back its customers, enhancing costs, and focusing in its core business.

However, they were still skeptical as MAS faced tough challenges amid growing competition.

“There are also concerns about potential funding for its RM6bil capex, which could burden the flagship carrier with a gearing of four times by end of 2012.

“But, management reassures that as long it is able to achieve positive Ebitda (earnings before interest, tax, depreciation and amortisation) in first half of 2012, this would not be an issue. We believe this is achievable as long the airline executes its strategies well,” it said.

AmResearch said while it was positive on MAS' business plan from a structural perspective, it believed it was too early to be bullish on the stock given the muted earnings visibility as a weak global economy in 2012 would not support air travel where loads and pricing power were negatively affected, particularly for premium travel.

“There is also the risk of a cash call to support fleet renewal, which is central to MAS' business plan, if profitability and cash flows do not improve as much as expected,” it said.

Both AmResearch and Maybank IB maintained a “hold” call on the stock while OSK Research retained its “sell” call.

AVIATION - Conjuring Long Term MASterplan

Saturday December 10, 2011

Analysts wonder what long-term plan can the airline conjure

By LEONG HUNG YEE
hungyee@thestar.com.my

IT is undeniable that Malaysia Airlines (MAS) is facing a crisis and is in a dire state now. The carrier is having both cash and profit crisis for a while and may fail if it continues the way it is now. Realising this, the management introduced a new Business Plan 2012 on Wednesday hopefully to turn its fortune around. Many will be interested in the business plan and the details on how it will help steer MAS away from turbulence.

But surely many will ask ... doesn’t MAS have enough business plans already? Over the past decade, the flag carrier has undergone several business plans including the Widespread Asset Bundling (WAU), Business Turnaround Plan 1 (BTP1) and Business Transformation Plan 2. Some of these initiatives have produced some promising results but the momentum was not sustained, nor did it steer MAS from further turbulence.

Ten years on, it is back to square one. For the first nine months to Sept 30, 2011, MAS posted a net loss of RM1.24bil against a net profit of RM8.55mil a year ago. Its cash and cash equivalent have depleted to RM968.5mil as at Sept 30 compared with RM1.92bil a year ago.

Some analysts are saying the new business plan was basically a new plan with the same story they have been seeing over the years. Analysts tracking the airline concur that its history, both financially and operationally, is an eventful one, especially since its low-cost counterpart AirAsia Bhd has now become a substantial shareholder in MAS. Ironically, AirAsia is celebrating its 10th year of success this year.

“The carrier (MAS) has faced strong financial challenges over time. Yet, it has managed to survive them. It’s interesting in the sense that one day it was flying high and the next thing you know, it has hit bottom but it has, through it all, managed to turn around,” says an analyst.

Basically, the business plan will see MAS turning itself around by cutting capacity, wooing back its customers, enhancing costs, and focusing in its core business.

“This business plan outlines our near-term recovery plan to move us to profitability by 2013, as well as a set of ‘game changers’ to sustain our performance and create a platform for continued growth for MAS’ future,” group CEO Ahmad Jauhari Yahya says.

He adds that MAS needs to make “hard and unpopular” decisions simply to survive and realise the airline’s vision.

A decade ago, MAS suffered high losses due to high fuel prices. The Government took control of the airline in 2000, but failed to turn it around. MAS had lost much of its core competencies in many areas of operations and was burdened by route and fleet expansion programme.

MAS reported an operating loss of RM776.6mil and a net loss of RM835.6mil for the year ended March 31, 2002.

In the same year, MAS underwent the famous WAU revamp to restructure the whole group. The WAU exercise wowed many with the almost instant result of turning around MAS.

Penerbangan Malaysia Bhd (PMB) was set up in 2002 as a wholly-owned subsidiary of the Minister of Finance Inc following the restructuring of MAS.

Under WAU, 73 aircraft of MAS (which were tagged with a value of RM5.1bil) as well as an associated RM7bil in debt were taken over by PMB.

The shortfall of RM1.9bil was made up by issuing additional MAS shares to PMB at RM3.85 each.

The aircraft were then leased back to MAS to enable the carrier to focus on operational efficiency.

With no aircraft assets on its balance sheet, MAS essentially became a marketing entity and operator of leased passenger and cargo capacity on international routes.

One of the immediate effects was that the restructuring transformed MAS’ gearing ratio of 700% as at March 21, 2002 to a net cash position, thus creating an “asset-light” airline.

The restructuring was successfully executed by Nov 6, 2002 over a record duration of 8.5 months.

The success of the WAU exercise speaks for itself. In the following year, MAS posted a significant improvement after its restructuring exercise. MAS narrowed its operating loss to RM47mil in 2003. It turned around in 2004 with an operating profit of RM195.6mil and RM317.7mil in 2005.

Not only did MAS manage to turn around its operation, the carrier also saw its share price increased from RM3.06 on Nov 5, 2002 upon shareholder approval of the WAU restructuring and reached a high of RM5.60 on March 31, 2004.

However, the momentum was not sustained. MAS continued to be in a precarious state despite having had all its debts transferred and seeing some improvements operationally and financially. High jet fuel prices were a serious concern, and a big factor in pushing it from a newly turnaround company into the red again was high oil prices in 2005.

For the period from April to December 2005, MAS’ losses amounted to RM1.3bil, shocking the market with its worst results since the WAU exercise.

Again, the company needed a restructuring plan to turn the company around – one more time. This time around, the Government appointedDatuk Seri Idris Jala as new CEO on Dec 1, 2005 to steer the company out of turbulence. Within three months, he came up with a BTP1 where he played a key role in helping MAS return to the black.

The success of the BTP1 saw the airline reporting record net profit of RM851mil for the financial year ended Dec 31, 2007 from a loss of RM1.3bil in 2005.

Jala launched BTP2, a five-year plan to transform MAS into a five-star value carrier and turn in profit of at least RM1.5bil in 2010 according to the plan. MAS posted a net profit of RM234.5mil for the financial year ended Dec 31, 2010.

MAS has managed to return to profitability within a short period. Route rationalising was one of the major contributors to the airline’s return to profitability.

Sustaining momentum

However, like in previous plans, the momentum could not be sustained. MAS continued to be in a bad position. One of the contributing factors for the massive losses was fuel costs. Another factor for the losses was high operating costs. MAS substantially lagged its peers on yields.

Some analysts say it was unfair to say the WAU and BTP have failed. The plans have managed to turn MAS to become an asset light carrier as well as to improve efficiency. Albeit a short period, the plans have also helped MAS to recover from unprofitability.

“If those plans did not take place, the airline would essentially be bankrupt by now. It may not even have survived the subprime mortgage crisis in 2008,” an analyst says.

Post WAU and BTP, MAS has taken all the necessary steps to improve its operations and efficiency. Now, it is time for them to look at ways to reduce their operational cost, an analyst says.

“As for routes, I think it had already stopped servicing unprofitable routes during the BTP days. What it should look at right now is on the capacity. It will also need to win back some of its customers,” an analyst says, adding that the national carrier’s biggest problem is in managing its cost.

Going forward, MAS’ network will include routes where its premium travellers will want to go, and where we can win in terms of competitive position and home advantage.

Maybank Investment Bank applauds the move that MAS would cut capacity or available seat per km (ASK) by 12% in 2012 on loss-making routes such as Buenos Aires, Dubai, Cape Town and Johannesburg.

“The move was overdue for decades as these routes have no chance to make money. This move is also a confidence booster because it shows that the management is bold and clear-minded in its cost-cutting approach,” says Maybank IB.

MIDF Research says MAS will deploy the resources to profitable routes by increasing frequency and the ASK is expected to increase by 3% over those routes. Hence, there will be a net reduction of 2% in ASK. The estimated impact will be RM220mil to RM302mil to core airline profit.

MAS currently leases its aircraft from PMB and will eventually return the aircraft to the latter when the lease expires.

As its fleet replacement programme shifts gear, MAS will have the youngest fleet in the region by 2015. Under its fleet renewal exercise, MAS could potentially own an additional 56 aircraft by 2016 excluding options for twenty B737-800 and ten A330-300. The aircraft deliveries are scheduled up to 2016.

“We will take delivery of 23 aircraft in 2012, each with state-of-the-art passenger amenities. As we introduce these products, we must also reinvigorate our sales and marketing functions,” MAS says in its Business Plan 2012.

MAS adds that it needs to “win back the hard-earned loyalty of customers”, especially those in Malaysia, and convince them of the superior value of our enhanced services. It also need to optimise our revenue management to enhance yields.

MIDF Research says MAS will accelerate the return of 36 older lease aircraft to PMB. “We believe that this will bring significant cost savings as the newer aircraft will be more fuel efficient.

Also, it will install state-of-the-art passenger amenities for better product offering and optimise yields through better revenue management. Impact is estimated to be RM394mil to RM477mil.”

Analysts say proper execution will be key risk factor to making that sure its MAS’ Business Plan come true and will be able to sustain for future growth.

“The execution of MAS’ business plan is important, as it will prove MAS’ ability to turn around and compete. It is for this turnaround story that MAS will be more significant for investors,” a local bank-backed analyst says.

Another analyst says that with all the building blocks in place, MAS may provide investors with a turnaround story. “It is not a new story but will be an interesting one considering its ups and downs. However, the results will only start showing in the next couple of years,” he adds.