1. Team are required to cluster the following 12 principal recovery actions
into three (3) change variables:
Ø Structural variable
-
A new company will be created. The operations, assets and liabilities of
the old MAS will be migrated to the new company by July 1, 2015
-
MAS headquarters and operation will be moved from Subang to KLIA.
-
The operating business model will be reset through a more
regionally-focused network, lower cost structure and greater focus on revenue
yield management.
-
The new MAS will review and where appropriate supply contracts.
-
An act to facilitate the restructuring of MAS will be enacted while an
Aviation Commission will be formed
Ø Cultural variable
-
Continuous communication and engagement with key stakeholders will be
held, including public accountability briefing.
-
Assurance, integrity and safety functions will strengthened.
-
Funding of up to RM6bil will be disbursed in stages, subject to
fulfilment of strict conditions.
Ø HR variable
-
Reskilling and
redeployment programmers will be held for MAS staff while new jobs will be
created
-
About 6,000 jobs
will be cut to right-size the workforce to about 14,000 for the new company
-
Industrial relations
and engagement with staff, unions and management will be strengthened.
-
The board of
directors and top management, especially the middle management, will
strengthened.
2.
Outline how these action are business and
turnaround plan may be executed in rebuilding MAS
Khazanah
is the new sole owner of MAS has formulated 12-point on restructuring the
organization.
Governance
and Financial Framework
·
The works, assets & liabilities are
will be transfer to NewCo is the immediate action taken by Khazanah to settle
things up. MAS is delist with the process is already commenced on 8 August
2014. Then NewCo will take an action to correct the cost and operation
structure & workforce with a new benchmark that is even better from the
old. Within 3-years of delisting, their target is to return the profit and to
relist within 3-5 years. IF the financial condition is achieved, sell-down or
partially sell-down of Khazanah’s stake to strategic buyer from private sector
will be considered.
·
However, there is always some limitation
to something. Up to RM6billion fund will be disburse in separated
stages/recovery parts based on the condition. The condition consist is to
delist MAS at a cost of RM1.4billion, the restructuring and retrenchment cost
amounting up to RM1.6billion and RM3billion capital will be injected
progressively to NewCo in 3-years period(2014-2016). Khazanah also has reduced
net gearing from 290% to a target of 100%-150%, through debt-to-equity swaps.
They also have announced that Kumpulan Wang Persaraan (KWAP) has agreed to swap
total up to RM750million of their existing Perpetual Sukuk into ordinary
equity.
Operating
Business Model
MAS
headquarters and operations will be moved from Subang to KLIA
·
MAS
is currently an exception among airlines in having its HQ and operations away
from its principal home airport. Khazanah Nasional Bhd's latest recovery plan
for troubled national carrier, Malaysian Airline Systems Bhd (MAS) will see
another RM6 billion of public money pumped in over a period of three years, and
about a third of its workforce slashed. Under the plan, MAS will move its
headquarters from Subang to Kuala Lumpur International Airport (KLIA). A total
restructuring and investment funding of up to RM6 billion has been promised on
a staggered basis, consisting of the amount of RM1.4 billion for the de-listing
of MAS via the recently announced selective capital reduction exercise, RM1.6
billion set aside for restructuring and retrenchment cost and a progressive
injection of RM3 billion into MAS. This will allow MAS to consolidate its
operations, improve working conditions and signify a new beginning under New
MAS
The
operating business model will be reset through a more regionally-focused
network, lower cost structure and greater focus emphasis on revenue yield
management
·
MAS,
both OldCo and subsequently NewCo as the operating airline entity will continue
to rationalise the network to be principally regionally-focused, with strong
global connectivity through MAS one world
alliance and other code-share partners. The set-up of NewCo
would allow the company to reduce the operational headcount by proper workforce
planning and break apart the strong union. We believe fair compensations like
voluntary separation scheme (VSS) will also be offered to MAS employees. Also,
the NewCo will honour all properly benchmarked contracts, implying that unfair
practices to MAS disadvantage will be renegotiated. The migration to NewCo, with its strong funding
conditionality imposed, is envisaged to result in a lower cost structure based
on industry benchmarks and work practices, with savings principally coming from
improved supply contracts and labor practices.
Strengthening of the assurance, integrity and
safety functions
·
Another
condition of the MAS Recovery Plan will be the strengthening of key control and
operational systems
·
These
include, inter alia, the creation of a Governance & Ethics Board Committee
and a voluntary Enhanced IATA Operational Safety Audit
Review and, where appropriate, renegotiate
supply contracts
·
It is
intended that New MAS will honor all properly benchmarked contracts under OldCo
·
The
migration to NewCo will nonetheless provide an opportunity for New MAS to reset
and renegotiate supply and other contracts, based on market norms and
benchmarks
Leadership and Human
Capital
Reskilling and redeployment programmers
will be held for MAS staff while new jobs will be created.
·
Khazanah is the strategic investment
fund of the Government of Malaysia entrusted to hold and manage the commercial
assets of the Government and to undertake strategic investments. So, Khazanah
will invest in a Corporate Reskilling Centre, to be located in the Subang area,
specifically to address the reskilling of the appropriate MAS staff who do not
migrate to the new company. MAS and Khazanah envisage that this will involve a
reskilling and redeployment program and the active creation of new jobs.MAS
held this reskilling and redeployment program to improve the employees personal
skills and improve the quality of service to the customers. In addition, MAS
and Khazanah are committed to helping each exiting employee to minimizing the
negative impact to their livelihoods and quality of life. Besides that, to
appropriate financial compensation, Memorandum of Understanding (MOUs) have
been signed with Scicom (MSC) Berhad and Sutherland Global Services. Scicom
(MSC) Berhad is a Malaysian listed
company to provide a structured pathway to employment for up to 2,000
transitioning MAS employees. This will be done by providing a customized and
certified reskilling training programme, couple with job placement in Scicom,
Malaysian companies and multinationals.B
About 6,000 jobs will be cut to
right size the workforce to about 14,000 for the new company.
·
The MAS cannot afford too much
employees. However, the MAS should re- selection the existing employees in the
organization. The employee with the best performance and high experience will
be stay in the company, but the MAS will cut for those employees not perform
well or send to the new company. In addition, this strategy can help the MAS to
reduce the cost on the staff’s salary. Besides that, Khazanah is nonetheless
committed to ensuring that the process of transfer, migration and separation is
conducted with the utmost care, fairness and due process.
Strengthen
industrial relations and internal alignment
·
In addition, all this plan for MAS recovery included
thing like improved industrial relation and be better than before. Maybe we can
create new system that affect the strengthening of industrial relation
·
For internal element, we can perform new standard
operation procedure (SOP) or set new key performance indicator (KPI) for all
staff to achieve and gain motivation to achieve company goal
Reskilling,
job creation and redeployment
·
Khazanah
will invest in a Corporate Reskilling Centre, to be located in the Subang area,
specifically to address the reskilling of the appropriate MAS staff who do not
migrate to NewCo
·
We
envisage that this will involve a reskilling and redeployment program and the
active creation of new jobs
·
MAS
and Khazanah are committed to helping each exiting employee – minimising the
negative impact to their livelihoods and quality of life. In addition to
appropriate financial compensation, MOUs have been signed with:
·
Scicom
(MSC) Berhad (“Scicom”), a Malaysian listed company to provide a structured
pathway to employment for up to 2,000 transitioning MAS employees. This will be
done by providing a customised and certified reskilling training programme,
coupled with job placement in Scicom, Malaysian companies and multinationals
·
Sutherland
Global Services, a global business process and technology management services
company with operations in Malaysia, to train and employ up to 1,500 exiting
MAS employees in operations processing.
Regulatory and Enabling Environment
Appropriate Government support on key initiatives
·
After the
approval of Parliament, the enactment of appropriate enabling legislation
including a standalone Act specific to MAS with a limited period to facilitate
the restructuring in a comprehensive and timely manner and the establishment of
an Aviation Commission.
·
The Government is wholeheartedly
committed to the restructuring and is prepared to support key areas including
the enactment of a standalone Act specific to MAS, with a finite period the
“MAS Act” to facilitate the restructuring in a comprehensive, timely and
holistic manner. Next, the establishment of an “Aviation Commission” with
regulatory capabilities to develop the aviation industry, which, in Khazanah’s
view, would benefit consumers and industry players. An “Aviation Commission”,
if established, would bring Malaysia in line with international best practice,
including with countries such as Australia, Ireland, the UK and the U.S., where
their key features including promoting the development of the sector through a
more regulated structure where growth of tourism and business is appropriately
balanced; protecting consumers through transparent, easily comprehensible
reporting of fares, service levels, and passenger rights; arbitrating disputes
between industry players; managing developmental air routes (i.e., those that
are not commercially viable) through a competitive bidding process similar to
the “Essential Air Services” programme in the U.S. or similar arrangements in
China and Indonesia.
Continuous communication and stakeholder
engagement
·
Regular
communications and engagement with key external stakeholders and periodic
public accountability briefings will be implement. Given
the scale and scope of the restructuring, it will be critical for MAS to have
the right enablers in place and primarily in the form of public support and
engagement. As a result, MAS will be proactive in communicating to its
stakeholders through means including, but not limited to, public accountability
sessions, detailed reports (e.g., releasing an annual report despite
delisting), and continuous engagement with the press and public.
-
REFERENCES;
https://www.google.com.my/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CBwQFjAA&url=http%3A%2F%2Fwww.khazanah.com.my%2Fdocs%2FRebuilding%2520a%2520National%2520Icon-The%2520MAS%2520Recovery%2520Plan.pdf&ei=TuUeVKCYCNSIuATN94HICQ&usg=AFQjCNEBOjbW0_pseFMxUd_EMdVmtbi2oA&sig2=_9KZIgXdFDaTWV_S16El-g&bvm=bv.75775273,d.c2E
