counter easy hit
    Today, Malaysia Airlines (a.k.a. MAS) announced a RM321 million first quarter loss, blaming it squarely on higher fuel costs. Worse still is its attempt at preemptive measures by announcing that we could see the same thing next quarter (even though it has hedged most of its 2006 fuel requirement at US$57 a barrel). So, is this merely one of the temporary symptoms of massive restructuring, or the harbinger for continued failure?
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  • Normal People Can’t Understand The Hike - An ordinary Malaysian speaks up against the fuel hike, arguing that he/she cannot understand why the Government could not absorb the rising fuel prices given Petronas’ rising profits.
  • Government’s Efforts Misguided? - The article argues that it is not the fuel hike per se that has brought the ire of the people against the Government, but the lack of transparency associated with Petronas and its rising profits.
  • Bio-Ethanol: A Petrol Alternative? - Finally, we have a relatively positive response on the fuel hike issue, with an article on the benefits of bio-ethanol as a possible substitute for petrol in Malaysia. The planned 5% use of bio-ethanol is argued as being far too small.
  • Paying Four Times More For Oil?!? - An interesting and rather persuasive article on how Malaysians are actually paying four times more for our petrol compared to Americans. The article sports some layman use of the relative purchasing powers between US and Malaysia, but the analysis seems to me as rather flawed given the use of example figures on average salaries. I’m also not too sure about the accuracy of the per gallon petrol prices used in the article as well. Edit: Oops, now I see the flaw: Purchasing Power Parity (PPP) was not considered at all.
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  • Public Universities To Raise Revenue - Following the Government’s plan to reduce expenditure subsidies to public universities from 90% to 70%, some public universities have begun taking non-tuition related steps to increase revenue. For example, University Kebangsaan Malaysia (UKM) has founded a private company to manage its private services, e.g. consultancy and health services.
  • Govt To Implement Scheme To Help Students of Closed Colleges - In view of the many private colleges springing up all over Malaysia, the Higher Education Ministry has proposed a “student assurance scheme” to help students of private colleges complete their studies at another institution if their current college ceases operations. The same article also hints at a top-down directive for public universities to teach Maths and Science degrees in English by next year.
  • More Government Backing, Says Private Colleges - While the Higher Education Ministy and the Government, in general, have announced many a time their goal of expanding the private education sector in Malaysia, we have seen little action. And private colleges are now calling the Govt. for it.
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  • No Surcharges Allowed, Said Najib - The Deputy Prime Minister told reporters that the Government would not allow fuel surcharges to be imposed by public transport operators unless they had valid reasons. This announcement comes in the wake of Pan Malaysia Bus Operators Association’s recent attempt to impose a 10 cent surcharge while waiting for Govt. approval for new (additional) fuel subsidies.
  • PM Orders Party Members To Explain Fuel Hike - In the wake of severe criticism over the recent fuel hike, our PM has ordered party members to explain the move to the people.
  • Thailand Raises Fuel Prices As Well - Just several days after Malaysia announced its fuel hike, Thailand follows suit.
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  • MAS Meeting Air France In Hope Of Joining SkyTeam - Malaysian Airlines’ MD recently met with top execs of Air France in a bid to join SkyTeam, one of three main global airlines alliances. At the moment, MAS is the only regional airline that has yet to enter a global alliance.
  • Government Not Bailing Out MAS - In an unexpected turn of events, the Government has announced that it will not be bailing out Malaysian Airlines - at least, for free. Khazanah Nasional has stated that any form of financial support will be “at arm’s length”. MAS had asked for around RM2 billion from the Government.
  • MSWG Backs MAS’ Recovery Plan - The Miniority Shareholder Watchdog Group (MSWG) has announced its backing for MAS’ revival plan, urging stakeholders to support the plan as well.
  • MAS To Rationalise Routes - In an effort to reduce losses, MAS will begin rationalising unprofitable routes by end-March. The rationalisation basically involves the removal of multiple domestic destinations contained within long-haul international routes.
  • AirAsia Makes Offer on MAS Assets - AirAsia has offered to take up MAS assets and staff if it gains approval to “…ply most of the national airline’s domestic network.” An excellent opportunity for our budget carrier indeed.
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