MAS Buffeted by PMS Storm

By ‘Asia Truly Malaysia’

To all the readers, this is a long article but very interesting. So those of you who need to go to the powder room please do so now, because you will not want to stop reading what is written here.

It is my view that names and acronyms are important. They do have a psychological impact on the bearer of the name or the public’s perception of the bearer of the name. Hence it is important that we use names that evoke respect, honour, goodness and such. It is also important that we avoid names that may invoke ridicule.

I always felt that English names like Robert Brooke Popham sounded a little ‘poppy’ (something that goes ‘pop’). The name does not inspire much awe. But this was the name of the Commander-In-Chief of the British Far East Command which surrendered Malaya to the Japanese in 1941. This was the Commander of over 250,000 Orang Putih soldiers who surrendered to 36,000 ‘vertically challenged’ Japanese bicycle troopers.

The acronym PMS refers to Malaysia Airlines’ Performance Management System – which is presently causing too much headache, depression, irritability, anger and restlessness among the majority of MAS’ employees. Over 90% of MAS’ employees are unhappy with the PMS.

As a result, some serious repercussions are now affecting MAS. Last week alone (8th to 14th July), 70% of all MAS flights were delayed, some by as long as 14 hours. MAS’ OTP or ‘On Time Performance’ (i.e., flights that left on schedule) for last week was only 30%. This is worse than Fly Asian Express or Air Asia – which are two-star budget airlines.

PMS is also a medical acronym for Pre-Menstrual Syndrome. The Doctors say that Pre-Menstrual Syndrome (PMS) is a cluster of up to 150 symptoms that many women experience each month preceding the start of menstruation. PMS is believed to affect between one-third and one-half of women between 20-50 years of age. The symptoms include headache, depression, irritability, anger, restlessness and diarrhoea.

Drawing a close parallel, we can see that indeed MAS has been afflicted with PMS!

Perhaps PMS is a sick acronym hoisted upon MAS by one of MAS’ numerous consultants who knows too well the level of English proficiency in MAS (and Malaysia).

Over 90% of MAS’ stalwart staff, i.e., those who have 10, 15, 20 and 25 years of service, have been bypassed by the PMS. They have not been paid bonuses this year and they have been completely cut off from the recent ESOS or Employee Share Option Scheme.

MAS’ fantastic, ‘too good to be true’ ESOS Scheme

The largest bone to pick is the ESOS. MAS’ ESOS scheme is a fantastic deal, too good to be true. Firstly, the very nature of the term ‘Employee Share Option Scheme’ means that ALL employees have access to the ESOS to secure their continued loyalty because through the ESOS the employee has a share in the company. This is not the case with MAS’ ESOS scheme. In MAS, only chosen employees are lucky enough to get the ESOS

Furthermore, employees have to pay for the ESOS too. They must buy the share options. But in MAS’ ESOS, those chosen and lucky employees do not need any money outlay to enjoy the benefits of the ESOS. Plus there are absolutely no downside risks to the ESOS. The lucky employees who got the ESOS can have their cake and eat it at the same time.

Immediately this casts doubt as to the purpose of the MAS ESOS. It is a simple cash bonus – a Christmas or Hari Raya goodie. Lucky employees who get the ESOS sign a piece of paper giving them an option to sell their ESOS shares within a time frame of four years. The price of the MAS shares for the ESOS has been fixed at about RM5.10 per share. If the share price goes up, the lucky employees can sell the shares at the higher price and keep the profit while MAS takes back the RM5.10 per share principal. If the price of the shares drops to below RM5.10, the employees can just opt not to exercise their option. No upfront money is involved for the employee. The ESOS is nothing more than a cash handout. Hence not everyone is given the ESOS. Only selected people have got it.

Who did not get the ESOS?

First, let’s see who did not get the ESOS. The entire population of MAS’ over 200 operating pilots, the most important part of the MAS family, were not offered the ESOS at all, including pilots with 20 years of flying service with MAS. Only two pilots who are now in management positions were given the ESOS.

Over 90% of middle managers, assistant general managers and even general managers with over 15 years experience with MAS were not given the ESOS either.

Who got the ESOS?

Now let’s see who got the ESOS.

i. Senior General Managers who were hired just two years ago have been given the ESOS as well as special bonuses. For example, Bernard Francis, a Senior General Manager with less than 36 months service with MAS, in his mid-thirty, and earning a monthly salary RM38,000 got the ESOS. His deputy, a Chinaman aged over 50 years, and with about 20 years service with MAS, did not get the ESOS. Bernard runs something called network management. His department suffers high staff turnover and it has not produced any great results.

ii. Non-employees have also been given the ESOS. You may ask how can non-employees be given ESOS in a company where they are not employed? Answer: They must be consultants. MAS is a con-sultans paradise. If you are a sultan of con, go to MAS. They will give you money.

Miss Zulaifa, a Singaporean, has been a consultant with MAS for the past 24 months and is drawing a salary of RM80,000 per month. Yes folks, that is RM80,000 per month. Zulaifah has been awarded the ESOS. By the way Zulaifah is leaving MAS in a few weeks. Her contract is soon expiring. The question is: why give a consultant (who is technically not an employee) an ESOS, especially when her contract is expiring and she is going back to Singapore? We will read more about Zulaifah further down.

iii. Drivers to the Senior General Managers have been given the ESOS. Almost all the personal drivers of the Senior GM’s have been given the ESOS. MAS’ 200 operational pilots who steer Boeing 747 Jumbo jets, Airbus A320 Wide-body aircraft and other airplanes have not been given the ESOS. MAS seeks to secure the loyalty of its SPM educated ‘drebar kereta’ more than its pilots. Mr Idris Jala, encik sudah gila ke?

iv. Mr Idris Jala, the Managing Director of MAS, has hired a PA or Personal Assistant in the person of one John Toh. Mr Toh’s monthly salary is RM18,000. MAS employees are mystified as well as flabbergasted as to the scope or scale of Mr Toh’s duties as a PA to the MD that can command a RM18,000 monthly salary. Anyway, John Toh, who has about 24 months’ service, also got the ESOS.

v. Union bosses, especially one particular boss of the MAS Employees Union have been given special bonuses as well as the ESOS. One of these union bosses also has a contract to ‘wash aircraft’ that was awarded through a company owned by his wife. It is a special ten-year contract with ‘No Termination Clause’. This union guy does not have to come to work. He appears once a month to collect his salary. Now he can collect on his ESOS too.

vi. One employee was given the ESOS, followed by his retirement letter. ESOS is supposed to reward talent to keep them in the company. Why reward people who are leaving? General Managers who are still serving did not get any ESOS.

vii. Ms Indra Nair who draws a RM40,000 a month salary and has about 24 months service was hired by Mr Idris Jala as Senior General Manager for Corporate Communications. She got the ESOS. Ms Nair makes MAS’ Press releases. Recently, she had to withdraw one of her corporate communications regarding the PMS and the ESOS after making a blunder. Mr Idris Jala had to apologise too for her mistake. Mr Idris Jala hired Ms Nair to come out with what is known as the CCS or Corporate Communications Strategy. But that was two years ago. After two years the CCS is still a no show.

To help her craft the CCS, Miss Nair hired another Assistant General Manager (of course, when you are a Senior GM, then you would need an Assistant GM). This AGM was pulled in from Maxis at a salary of RM18,000 per month. But still no Corporate Communications Strategy.

The fact that of late MAS is suffering 70% flight delays and the fact that 90% of its employees are totally unhappy with MAS is proof enough that the RM40,000 per month Communications SGMs are falling down on the job too.

ESOS done in secrecy

MAS employees also despair the fact that the whole ESOS was done in secrecy. There was absolutely no transparency. The staff do not know on what basis did a RM38,000 per month Senior GM with just two years in the company get his ESOS while a senior pilot with over 25 years experience flying Boeing 747s did not get anything – no ESOS or Special Bonus?

Mr Idris Jala becomes a Muslim (Islam Hadhari version).

By the way in the latest turn of events at MAS, the MD Mr Idris Jala has decided to adopt Islam Hadhari as his faith. This means he has joined the ‘I don’t know’ club. At a stormy meeting last week, when MAS’ disgruntled staff pelted him with questions and indisputable facts, Mr Idris Jala just looked at them blankly and said, ‘I don’t know what else to do’.

Idris making plans

Mr Idris Jala is also making plans for himself. Talk is his old employer, Shell, wants him back. But Idris is eyeing the top job in Petronas to replace soon to retire Tan Sri Hassan Merican. Idris certainly has the connections – in the person of the Finance Minister 2. To all staff of Petronas please take note. You are familiar with consultants too. But please brush up on what are ESOS, 30 something Senior General Managers, etc. Why? Because it’s coming! To an office near you soon!

Whistleblower Program

Why is this very detailed article being written now in Malaysia Today? The last time this happened was when Munir Majid, the Chairman of MAS, started buying Botello paintings while quaffing free Dom Perignon and flying to London all on tax-payers’ expense. To quell such embarrassing details of the pimples on MAS’ backsides being shown in public again, Mr Idris Jala came out with the ‘Whistleblower Program’. Disgruntled employees were given a ‘secret and confidential channel’ to voice grievances without any fear of exposure or repercussion.

Well, one honest employee from the Engineering Department in MAS wrote a list of things about his department and promptly put it into the Whistleblower Box thinking that his confidentiality would be respected and that he was doing something good for the company. To his great chagrin and some discomfort, his confidential memo was sent back to his department head. His identity was blown, his name was noted and life became quite the misery for this honest soul. And that was the end of Mr Idris Jala’s Whistleblower Program too. That is why this article is coming out now in Malaysia Today. We are blowing the whistle. Phreet! Phreet! Fowl play! Red card!

The KPI fiasco and Silo Mentalities

After the advent of Mr Idris Jala, MAS sought to curb what was flagged as the Silo Mentality. This refers to staff that are only worried about their own job scope and do not care too much for their colleagues at the work place. MAS wanted its staff to be team players – to be more cognizant of what were their colleagues’ responsibilities. Hence the KPIs or Key Performance Indicators were introduced. But after three years of implementation, the KPIs are creating a greater Silo Mentality and causing more PMS (pre-menstrual syndrome) type problems for MAS.

The harmony in the MAS family has been completely broken by the KPIs. It is going to take years to rebuild the rapport and camaraderie that existed in MAS before the KPIs were implemented in the GLCs.

A simple example of the negative effects of the KPI is the case of Zulaifah, the RM80,000 per month Singaporean consultant who was brought into MAS by Mr Idris Jala and Tengku Azmil, the Deputy CEO of MAS. Zulaifah’s KPI was simple – sell some of the buildings and properties owned by MAS and do it by a certain date to ease up cash flow for the beleaguered airline.

Among these are the US1,000 per night Four Seasons Hotel on Langkawi and MAS’ properties in Australia. Zulaifah set about with zeal to achieve her KPIs. The Four Seasons Hotel was sold to Prince Tolol of Saudi Arabia. But there are some issues not resolved. Part of the land in Langkawi on which the Four Seasons Hotel stands belongs to the Raja of Perlis. It looks like the Raja of Perlis may now have some legal sorting out to do too. Also, it is doubtful how the sale of Langkawi land meets State Government regulations on sale of land to foreigners. Well, the Legal Department in MAS has to sort it out now – perhaps to the detriment of their own KPIs.

Then, to meet her KPIs again, Zulaifah sold MAS’ properties in Australia – this time she did it so quickly that the properties were sold below market value. Now, after this stroke of genius, MAS has to rent office premises in Australia. So, rental expenses in Australia are going up – putting stress on the KPIs of MAS’ Australian operations. But as far as Zulaifah is concerned, she has already achieved her KPIs. And she has been rewarded with the ESOS. And she is leaving anyway since her contract is expiring.

The biggest complaint is of course Mr Idris Jala’s own KPIs. Idris was told by Nor Mohamed Yakcop, the Finance Minister 2, that among other things he was to implement MAS’ new PMS by 31 December 2006. Idris has done just that. The result now is MAS’ famous 70% delay in all flights last week (over 300 flights a day). This figure will possibly worsen before it gets better.

MAS has a Deputy CEO designate in the person of Tengku Azmil – formerly from Penerbangan Malaysia Bhd or PMB. PMB owns all the airplanes flown by MAS. Azmil was the guy in PMB who leased all the airplanes to MAS. To satisfy his KPI requirements when he was in PMB, Azmil laid down the terms that when the airplane leases expire MAS must return the planes to PMB in ‘original working condition’. What does this mean? It means money. MAS has to spend an extra RM180 million a year on parts and other upkeep to meet this condition. (In the airline leasing industry the cost of the lease takes into consideration the condition of the plane when it is to be returned).

Now, over at MAS: Azmil, the Deputy CEO, finds that his KPI is being infringed upon by this same expensive lease condition. He is trying to ‘unbundle’ this condition set by PMB. But PMB is saying, “This is what you put in when you were here.”

The senior management in MAS does not care what happens down the line. As long as they can achieve their own KPIs, they don’t give two hoots about how the impact of their actions on the middle managers and the rest of the company. MAS’ senior management is now solidly entrenched inside their Silo Mentality.

However, MAS is not alone. Other GLCs, particularly Khazanah Nasional Bhd, are also suffering extreme cases of the Silo Mentality after the implementation of the KPIs. The KPI system gives birth to the Silo Mentality. This is what happens when the Finance Minister 2 cannot think strategically on his own. The KPI idea was bought lock, stock and barrel from con-sultans who conned the Finance Minister 2 into believing that KPIs would save the GLCs. Well, they are not.

Chairman Munir Majid

What would be MAS’ travails without mention of its Mamak Chairman? My regards to Munir Majid, the Chairman of MAS. I bumped into him at a public function recently (Datuk, I was the albino dwarf with the python tie). Munir has become a little less ostentatious since his RM1 million Botello art collection was exposed a couple of years ago. But Munir still thinks he can contribute some style to MAS. As the Chairman of the Board, Munir hosted MAS’ latest Board of Directors meeting in Jakarta, Indonesia, just last week.

This is the first time in the history of MAS that a Board meeting has been held outside the country, especially in Jakarta. Again, many of MAS’ old staffers are puzzled as to why Jakarta? But to Munir, those are silly questions. All the Directors were flown first class on tax-payers’ money, booked into five-star hotels, and had a binge in Jakarta. Munir of course must have polished off the Dom Perignon champagne as usual. Someone must tell Munir that Jakarta got no style lah! Also the habit of ‘telan dengan botol sekali’ Dom Perignon champage at tax-payers’ expense is really low class lah anna! And right after the Board meeting, MAS’ achieved delays in 70% of all its flights.

MAS exploring options including ‘throwing in the towel’

According to the AFTA (Asean Free Trade Agreement), the open skies policy for air travel between ASEAN countries starts in 2009. From Jan 1, 2009, any ASEAN airline will be allowed to fly from capital to capital without any restrictions. This means MAS can fly to Manila, Garuda can fly to KLIA, etc., without any restrictions.

Then, three years later, in 2012, ASEAN airlines will be allowed to fly to major airports in each others’ countries. Another three years later, in 2015, ASEAN airlines will have totally unrestricted access to fly to any airport in ASEAN. This means SIA can fly to Batu Berendam in Melaka, MAS can fly to Yangon in Myanmar, Air Vietnam can fly to Bandung, Indonesia, and so on and so forth.

To prepare for this most exciting, uncertain and risky future of the open skies, MAS has done what it does very well. It has hired more consultants to advise the airline on what to do. One of the options MAS is seriously considering is to throw in the towel, i.e., to merge with another airline.

MAS hired Mackenzie & Co to explore further this ‘throw in the towel’ option. Two Mat Sallehs from Mckenzie & Co are walking the corridors of MAS trying to identify potential merger partners. (You won’t believe this but keep reading).

The two Mat Salleh consultants did not have a clue about what to do. So they organised a meeting with MAS’ middle managers and put the question to them ‘Who do you think can be the best merger partner for MAS?’

The MAS managers gave the two Mat Sallehs a whacking. They told them, “You are the bloody consultants hired to think for us. Why do you ask us? You tell us.” But the Mackenzie boys still had no clue. Then one seasoned MAS manager suggested that they study the merger between KLM and Air France and see if there could be anything there worth emulating (although the Dutch KLM and Air France have merged, their planes maintain separate livery, but the merged entity enjoys benefits in purchases, operational savings, support services, etc.).

Being Mat Sallehs, the two Mackenzie consultants immediately booked business-class tickets to Paris and Amsterdam to study the Air France-KLM merger – all at the expense of the Malaysian taxpayer of course.

If merger is an option that MAS is seriously considering, there are few possible merger partners. Since Garuda or Air France are out of the question it leaves only SIA and possibly Qantas to consider. Both make good business sense but are politically untenable. If MAS merges with SIA then we will revert back to the old MSA (Malaysia Singapore Airlines). Only now they may call it Singapore Malaysia Airlines (“Iskandar” could be a compromise). Qantas is possible since there is an airport at Perth, Australia, which is now the favourite destination of our Prime Minister. But since names are important, ‘Con Air’ just does not sound right – at least for us non-convict descended Malaysians.

But the most likely merger partner on the horizon is Air Asia. It is most likely that within 24 months MAS will merge with Air Asia. In the Malaysian scheme of things, Air Asia will take over MAS. Maybe the new entity could then be called ‘Air Asia Truly Malaysia’.

MAS: Con-sultans paradise

MAS is the con-sultans paradise. If you are a sultan of con and you want to make easy money, go to MAS. From the time of Munir Majid, Mr Idris Jala and Tengku Azmil, the Deputy CEO, MAS hired a con-sultan to advise on their ‘support services’. RM20 million was spent on the con-sultan alone. But after two years it has been found out that the programs that were implemented in that area were not cost effective. So the entire ‘shared services’ program has been rolled back. That is RM20 million down the toilet.

Another con-sultan, based in Dubai of all places, was hired to implement IT in MAS. The con-sultan’s initial cost was also RM20 million. Over the past years, a total of RM100 million has been paid to this con-sultan for their IT services. MAS managers who have to use the ‘new’ IT system find out that they cannot get information from the system. Whenever strange astronomical figures are churned out by the IT system, MAS seasoned managers with 15, 20 and 25 years service immediately call the IT con-sultan and say, “Your system is acting funny again.” The IT con-sultan becomes overjoyed to hear this. They will say ‘Raise a log’. This means file a complaint. What it means is more money because every ‘log’ that is raised will be invoiced back to MAS for IT con-sultan services. RM20 million has become RM100 million.

Millions of taxpayers’ money is being squandered by MAS on consultants and the supposedly business-savvy new management team led by Mr Mr Idris Jala to think up of ways of selling the family silver. Any idiot can do that.

Message to Mr Idris Jala: You do not need these expensive consultants and RM40,000 a month Senior General Managers to turn around the company. There are thousands of loyal, experienced and clever employees in MAS who have 10, 15, 20 and 25 years service with MAS. They know the company and the airline industry inside out. From its engineers, its in-house IT people, its accountants, its sales and marketing people, the pilots and the administrators – they are all proven in many ways. There is enough ‘Internal Equity’ within MAS to make a success of the airline.

MAS’ seasoned staff, in particular the large number of middle-managers, are supremely confident that they can tackle any open sky policy come 2009, 2012 and 2015. It is time for MAS to undertake ‘Resource Mining’ – look into itself and promote its own proven and loyal staff who are very capable of running the airline well. Just leave them alone to do the job. Ever since the entry of Tajuddin Ramli in the 90s, MAS has not recovered. It is being passed from one set of stained and greasy hands to yet another. Each time MAS is passed around, money is lost by the bucketfuls.

Just leave the staff alone and let them run the airline. They know what to do. Don’t waste money, don’t waste time.

Conclusion: Melayu takkan hilang di dunia, tetapi Melayu takkan ke mana!

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One Response to “MAS Buffeted by PMS Storm”

  1. Adam Says:

    This issue is back again. MAS is lossing money. Heard from reliable sources that MAS passenger division or commercial division from flying passengers NEVER made money even in 2008 or 2007. It was their CARGO unit and MRO that brought in the huge bulk. Some sources say MAS was almost lossing money in 75% of the sectors they fly except domestic and Asean.
    Staff’s are again worried about the pay cuts BUT senior managements still enoys good “extra’s” such as drivers, AGM’s receive 100K for cars they purchase, Blackberry given to the entire Turn Around Management office and many others. Moreover some sources say the Turn Around Management office headed by MR. Idris Ex PA some persion called Mr. Toh ; He and his team cant deliver any results BUT yet their salary is rocket high!
    Mr Idris concept of unleasing the talents is not really true. Some sources say it still comes down to “who-you-know” and only those get position. We have seen that with the engener. department with a high profile post given to a person having just a KPI of 3.
    More rumours are going around that Mr.Idris and the so called TMO office are not listeing to the ground. The 18,000 strong staff they have. The middle class managers still are certain they know whats wrg with MAS but these issues are not the cocnern on top management. Close ears policy.

    Some say its Silo mentality. I think its time these are to be broken. MAS needs a strong powerfull restructure. To a level where every staff is confident with the company.

    *Will MAS reply to this? Or would more sources reveal more darker sight of MAS?

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