Tuesday, July 16, 2013

MAS staff key to turnaround plan

MAS staff key to turnaround plan
By Sharen Kaur

BIG POTENTIAL: But analysts are divided if it is overstaffed or operating less efficiently than rivals
MALAYSIA Airlines (MAS)'s workforce is key to the national carrier's turnaround plan, but analysts are divided on whether it is overstaffed or operating less efficiently than its rivals.

A quick check on its financials shows that MAS has 19,406 employees on its wage book, while Singapore Airlines (SIA) has 23,189.

As at end-2012, the actual sales per employee for MAS was US$221,761 (RM707,417), while SIA's actual sales per employee stood at US$524,053 as at end-March 2013.

"The turnaround plan must address this," said MIDF research head Zulkifli Hamzah yesterday.

He added that by increasing capacity, staff productivity will improve. The question now is whether higher capacity will attract a commensurate demand.

"If additional seats can be filled, the airline is a good bet for a turnaround story," Zulkifli said.

His comments came in the wake of a plan disclosed by Firefly Sdn Bhd chief executive officer Ignatius Ong, who had reportedly said a listing is on the cards for the company.

"One of the requirements for listing is to strengthen the company's position," said Ignatius, adding that Firefly is now on an expansion mode.

Mercury Securities head of research Edmund Tham said if value could be squeezed from a listing exercise, MAS shares would rally.

MAS has been trading below the 50-sen barrier and is one of the most actively traded stocks on a daily momentum.

"Capture the imagination of the investing public, MAS, which is a high-beta stock, has the potential to dominate the market, especially since Khazanah Nasional Bhd is a shareholder," said a dealer with RHB Securities.

"Potential" is a key word in the MAS story as the airline has often been tipped for greatness due to its high service standards. However, the inability to live up to its potential has landed it in the corporate restructuring room more times than any other major government-linked companies over the past 15 years.

MAS chief executive officer Ahmad Jauhari Yahya recently said the carrier's latest business turnaround plan has started to yield results.

Despite poor economic conditions, MAS' operating loss reduced by 46 per cent to RM165 million for the first three months ended March 31 2013.

Analysts, though, contend that the market, having seen more than its share of turnaround plans, only for a new one to be introduced now to revive the fledgling carrier, aren't too excited about short-term fixes.

They are looking at a word often missing in most of the turnaround plans - consistency.

Source/Extract/Excerpts/来源/转贴/摘录: www.btimes.com.my
Publish date: 16/07/13

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