The scepticism has much to do with the failed merger talks between government-controlled Proton Holdings Bhd and Volkswagen which kept investors hanging on tenterhooks and much later, very disappointed.

This is also not the first time that MAS and Qantas are at the negotiating table. In 2000, when Tan Sri Tajudin Ramli helmed MAS, the national carrier talked to “several potential alliance partners” including Qantas. But the deal was abandoned on grounds that it appeared too much in Qantas’ favour.

While the landscape of the global airline industry, in general, and MAS, in particular, has altered drastically since then, one overriding factor remains the same: How much to give in.

In a filing with Bursa Malaysia, MAS said it was pursuing strategic partnerships with a number of airlines on collaborations that range from joint ventures and code shares to interlining partnerships.

It said it was part of its Business Transformation Plan to pursue such a tie-up.

MAS also recently inked a memorandum of understanding with Qantas for a joint venture in maintenance, repair and overhaul (MRO).

A merger of equals? No way

But what kind of merger will it be?

“It won’t be a merger of equals,” says one industry watcher. There’s a whole lot more truth in that statement than meets the eye.

In terms of market value, Qantas is worth around US$3bil (RM10.8bil). The Australian airline is also in talks with Europe’s third largest airline British Airways (BA), which has a market value of around US$2.6bil (RM9.36bil). On the other hand, MAS’s market value is around RM4.4bil.

The Qantas-MAS deal will likely spark some “nationalistic” anxiety among Malaysians, not too different from the current hot debate among Australians over the proposed Qantas-BA tie-up. While the British press has touted the deal as one between “equals”, Australian regulators are wary and the general public unnerved that it could end up being a takeover of Qantas, this despite many assurances from Qantas chief Alan Joyce.

Underscoring the fact that mergers minus equity swaps are still onerous affairs, Qantas admitted earlier in the week that the US$5.6bil deal with BA is facing major obstacles and there is a reasonable chance it will fall through.

Where does MAS stand in this equation? What will the merger or profit-sharing ratio be? Will the alliance close the quality gap between the airlines and will the bigger brand inadvertently gobble up the other?

“Qantas will have the upper hand, just judging by its scale. If it can squeeze a favourable deal out of BA or walk out if it can’t, then it can do so with MAS,’’ an industry watcher says. “Realistically speaking, the market will find it hard to believe that MAS is on the cusp of a so-called super alliance, let alone a three-way mega merger.”

“We believe there is a low possibility of a merger materialising,” says OSK Research analyst Ng Seng Guam, adding that since Qantas is still in talks with BA, any tie up with other airlines like MAS may jeopardise its due diligence process on the existing proposal.

He adds that given the complication and regulatory approval required for the Qantas-BA deal, it may take years to complete and, hence, drag out the potential collaboration.

Aseambankers is equally doubtful. “Despite the potentially far-reaching synergistic gains for MAS, fear of the unknown, like what would be the actual outcome of any potential ‘merger’ for MAS, could also be a stumbling block.”

Flight to merger

The airline industry is notorious for its vulnerability to sharp downturns. Bitter competition, towering debts and record fuel costs this year alone have seen 30 airlines buckle. And while fuel prices have come off substantially, lumpy capacity increases as well as plummeting demand still cloud the industry’s prospects.

Over the week, it was reported that the International Air Transport Association (IATA) expects global airlines to post losses of US$5bil this year and US$2.5bil in 2009 as the economic crisis bites. “The outlook is bleak. The chronic industry crisis will continue into 2009 … We face the worst revenue environment in 50 years,” it has said.

Under such intense pressure and as the skies have been opened wide, many airlines are clamouring for consolidation as a means of achieving big savings.

The year 2008 may also be known as one of mega airline mergers. In United States, Delta Air Lines and Northwest Airlines merged in a US$3.1bil deal which galvanised the US airline industry but it didn’t quite set off a wave of consolidation as expected.

More recently, BA, whose merger with Spanish carrier Iberia is still a work-in-progress, said it is in talks with Qantas on a merger, which would create the world’s biggest airline. BA has also expressed interest to form an alliance with American Airlines.

In Ireland, Europe’s largest budget carrier Ryanair is considering a plan to take over its rival Aer Lingus while Germany’s flag carrier Lufthansa is in talks to take over Austrian Airlines.

Template for mergers

The cross-border takeover of the Netherlands’ KLM by Air France in 2004, which does not involve an equity swap, appears to be a popular template for mergers and one that is widely perceived to be the path MAS and Qantas have chosen for their alliance.

The outcome of the Air France-KLM deal, deemed to be the industry’s most celebrated merger, has been stunning and has “befuddled industry observers and rivals”, says Aseambankers in a recent report on the aviation sector entitled, Consolidation – friend or foe?

“The Air France-KLM example is encouraging not just because it created a healthier financial entity, which is less susceptible to the lows of the industry. Operating data – actual capacity filled and available capacity flown – all show startlingly positive trends. Improved seat factors were recorded…

“…the Air France-KLM experience garnered more than just envious glances, but outright copy-cat attempts to emulate their operating successes.”

The key: It explicitly sought to optimise available resources and fleet instead of duplicating services or simply focusing on potential cost savings.

Why MAS needs this deal

OSK’s Ng wraps it up aptly: “…MAS may already be near its saturation point growing ‘solo’ … collaboration may be timely in moving the company up another notch.”

Many are impressed by the speed and depth of MAS chief Datuk Seri Idris Jala’s turnaround plan, which has lifted the company out of its abysmal state. The airline is generating profit and is in a cash position of RM4.8bil. His penchant for dissecting detailed information in every key aspect of the airline’s operations, through what some say is an onerous and tedious process but one that has been extremely fruitful particularly in slashing costs, is likely to be employed in any discussion of a potential alliance.

“The big boys want Idris’ time now. It speaks volumes about what he has done. Three years ago, it would have been almost blasphemy to catch another CEO talking about an alliance with MAS,” says an analyst.

But the truth is, for Qantas or any other major airline, MAS is an option, but not necessarily the ultimate or the most preferred choice.

“Qantas, I think, or another major airline, if given the choice, would prefer to go with Singapore Airlines, Thai Airways or Cathay Pacific.

So, MAS needs to move fast or it could be eternally left behind. The current situation favours MAS.

Thailand is facing internal strife; Cathay Pacific is facing the music of some misteps in hedging policies and its expansion into mainland China.

So the current MAS team should grab the opportunity. And they should get the blessing from the regulators to forge this tie up,” he says.

Looming concerns in the industry make a merger of sorts highly compelling. Asean will open its skies in a matter of weeks, which means competition will intensify in the region. Compared to Bangkok, Singapore and Hong Kong, passenger traffic in the KL International Airport is not attracting enough feeder traffic that a hub would ordinarily enjoy.

If MAS ties up with one of the big boys, it will be one way of feeding foreign passengers to domestic routes. In addition, there is a big sweetener in tying up with Qantas, which apart from BA, controls the Kangaroo route (air routes between Australia and the United Kingdom).

“The multiplier effect is tremendous if it can do this. Not only will it be serving the airports, it will also benefit the tourism and business sectors,” an analyst says.

The plus points for a tie up are plenty as it can snowball into key aspects of operations. OSK Research’s Ng points out that an alliance can win larger discounts from Airbus and Boeing Co. “The enlarged alliance certainly may leverage up buying power, not limited to aircraft but also other materials at sizeable quantities,” he says.

In addition, an alliance will enable, for example, Qantas to eventually sell the MAS inventory closer to its own yields, which are among the world’s highest, instead of MAS’ historically low yields, Aseambankers points out.

Moreover, “with Qantas already having a strong LCC (low-cost carrier) business model via Jetstar, the combination with MAS or Firefly may create a new giant in LCC that covers the north to south of the Asia-Pacific market,” Ng says.

Selling the idea

On Wednesday, Idris and his senior team hosted an informal dinner for a large group of analysts at the Shangri-la Hotel, Kuala Lumpur. Idris took the opportunity to explain the rationale for a potential alliance with a strategic partner, referring to it as a “hard-wired” deal.

Did the analysts walk out convinced? One sceptical analyst has since sort of changed his stance. “The talks have been going on for 20 months. Detailed studies are being carried out on synergies such as routes, etc. Idris and his team have proven themselves. The stars seem aligned. Maybe it can happen.”

“Our cabin crew have been recognised internationally as the best in the world for many years until recently when we were pushed into second place. We are working with great passion to regain the top spot.”

“Many airlines want to pinch our cabin crew and we have to fight hard to retain them,” he said at the plenary session of the Business Week Annual CEO Forum in Beijing on Dec 5 on Making Talent a Passion.

Munir added that its cabin crew were the company’s pride and joy. “This does not mean that we do not value all our other staff, who all support one another, including of course the cabin crew, but as an outward expression and advertisement of our product in the air, they are special and without peer.”

He said Malaysia Airlines offered the brand promise of Malaysian Hospitality MH, the airline code, not just for every flight, but at every touch point of dealing with the airline.

“We believe passionately in our work force and want them to realise their full potential, to improve where there are shortcomings, and not to duck when there is repair work to be done. We have to handle complaints, genuine and even from those with ulterior motive,” he said.

Munir said “unleashing talents and capabilities” was one of the five prongs of what the airline called the MAS Way to achieve our vision (to be a Five-Star Value Carrier) and mission and to drive its strategy.

He said Malaysia Airlines was one of only six identified five-star carriers in the world. Munir said the company “digs hard and deep into the organisation to provide opportunities for growth”.

Munir said the culture of service and performance, measured and recognised, was one of the pillars of the Malaysia Airlines’ turnaround success story, which has seen the company achieve nine quarters of uninterrupted growth in the most challenging business environment ever in the history of the airline industry.

In the wider context of human capital development, he was of the view that the work force demanded that their leaders worked hard and gave them more time, and they wanted to see them up close, not hidden away in some plush office.

He said leadership development came not from formalised leadership training, but out of “situations” and during process of work.

Please bring along letter of application,resume,original and certified true copies of academics certificates,
IC and a recent passport size photograph.
Office attire for the interview, Female candidates are encouraged to wear kebaya.

Malaysian Airlines System Employees Union (MASEU) secretary-general Abdul Malek Ariff said this was because the British consultant who conducted the scheme for MAS here, needed more time and in-depth research before the scheme could be made compulsory for all cabin crew.

“Due to several inevitable circumstances, the consultant company had asked to defer the probation period until April, next year. The original probation period was from May 1 until Oct 31,” he told Bernama Wednesday.

The flight time limitation scheme was introduced by the International Civil Aviation Organisation in 1997, requiring all airlines to explain their obligations to the cabin crew during a flight to Europe.

Abdul Malek said MAS pilots had put the scheme into practice since 2005 and the cabin crew would do the same in stages.

Among others, he said, the scheme required time-off for the pilots and cabin crew involved in a flight from Kuala Lumpur to Europe, to be reduced from 44 hours to 24 hours.

The time-off will be replaced once they returned to their homeland, he said.

On a complaint that a cabin crew had to work non-stop in a flight from London-Taipei-Kuala Lumpur, Abdul Malek said that was just an isolated case.

– BERNAMA

As soon as the seat belt sign went off after take off the cabin crew rushed the service, first bringing around a tray of beers (no other choices), swifty followed by a meal and then dashed along the aisles with duty free. Before long the window shutters were pulled (it was a night flight) but it was obvious that the crew just wanted to get whatever they needed to do done and for passengers to be settled for the night ASAP.

During the night (and I was awake for the vast majority of the flight, probably slept for 1 hour in total) the cabin crew were rarely seen. I was desperately thirsty as following security problems at LHR we were unable to bring our own drinks on board and the only soft drinks we were given were served in small cups. If you asked for 7up or coke the crew didn’t give you the can but poured some into a cup! I spotted a member of the cabin crew eventually and asked for a cup of water, I was given half a cup of warm tap water! The crew did not walk up and down the aisles with drinks until about an hour before they were due to serve the second meal of the flight.

Given the the risks of deep vein thrombosis to long haul passengers and the medical advise to drink plenty of water, this oversight was quite shocking as was the lack of any visible presence of cabin crew for a large part of the flight in the rear section of economy.

When the second meal was being served I was told that as all other meal options had already gone that I could only have some sort of fish dish. As this did not appeal and I was not very hungry I politely declined the offer of food. The young male flight attendant then moved on and didn’t offer me a drink at all. A couple of minutes later the Senior Stewardess (Vilma) was passing my seat and I mentioned to her that I had declined the meal but had not been offered a drink and asked if I could have a cup of tea.

Well, I was sorry I asked as she started to raise her voice at me saying that I should have asked and that it wasn’t their fault that the choices of food had run out (not that I had mentioned that). Naturally her agressive and defensive response to my simple request for a cup of tea rattled me a little and I calmy, in a low voice informed her that I was not happy with the level of service on the flight. This was like a red rag to a bull and her voice became even louder, to such an extent that other passengers who had been sleeping woke up and were looking over. She ranted about the fact that on Malaysia airlines that you had to ask for things as they are not automatically offered and basically blamed me for not asking for a cup of tea. I tried to explain to her that I was thirsty and had been for most of the flight and I mentioned that I had not seen any cabin crew walking along the aisles with drinks (this is the case on other airlines during long haul night flights). Again she continued to rant me and said that they had walked up and down with drinks all night but that it wasn’t their fault if passengers were asleep! She then continued to go on about how I should have asked and was very agressive, defensive and confrontational. Rather than engage in what could have potentially been an argument I did not respond to her. I then had a cup of tea slammed down in front of me! I must admit that I was also quite confusued as I had been reprimanded for not asking and yet when I did ask I was ranted and raved at!!

About 10 minutes later the young male flight attendant came over to me and began apologising for not offering me a drink. He seemed very flustered and gave the impression that he had been given a telling off. I thanked him for his apology but told him that I understood how he could have overlooked offering a drink to me as he had so many passengers to attend to. I explained to him that I was not annoyed with that but with the attitude and behaviour of his colleague. He asked me what she had said and seemed shocked when I told him.

About 30 minutes later I came out of the toilet at the rear of the plane to find this young male flight attendant waiting for me. He began apologising again and I told him that he should not keep aplogising to me for the actions of someone else. He asked me if he could go and get her so that I could talk to her but I said that given her attitude and agreesive manner and loud voice that this would not be fair on other passengers. I explained to him that I would instead make a complaint to Malaysia Airlines. He almost begged me not to do this as he would have to make a statement and could get into trouble! Once again I explained that he was in no way at fault but I suspect that his colleague had somewhow made him feel he was to blame for what had happened!

Just before landing I was appraoched yet again by this young man who was still apologising and even tried apologising on behalf of his colleague! I couldn’t believe that asking for a cup of tea could cause so much hassle!!

I have to say that I have flown all over the world on many airlines and this was by far the worst cabin crew I have ever experienced. Given that this was my first trip to Malaysia my exeperince of the national carrier was very poor. The cabin crew on national carriers are ambassadors for their country and quite often the first nationals of the country that travellers meet. First impressions do count and I have to admit that following this incident I was dreading landing in Malaysia as I began to think that this woman could be representative of other Malaysians. And as for ‘going beyond expectations’ my view of Malaysia Airlines following that flight was that it didn’t even come close to meeting my expectations.

Malaysia Airlines do appear to be cost cutting but I do think that they need to be aware that many people, and indeed many cultures, do not like to impose themselves by having to keep asking for things. Perhaps I should have been inconsiderate and kept pressing the button for cabin crew . But then that is not in my nature as I do not like to impose or seem greedy! Perhaps they could have communicated to passengers that the service would be minimal but that should feel free to press the button or approach the galley if they wanted anything to eat or drink during the flight. If you don’t commuincate people just don’t know! Or perhaps this is ploy to keep costs down, who knows!

Thankfully flight back from KLIA to LHR was great, different crew, no Vilma in sight and the service was superb. The cabin crew didn’t stop and were up and down the aisles all night with orange juice, water, snacks. The were very attentive and were warm and friendly. It was clear from my return flight that this was not perhaps not indicative of all Malaysia Airlines cabin crew and that I had been very unfortunate to travel out with a crew who were less than helpful, lazy, treated passengers as an inconvenience and had a particularly rude and agressive member of the senior cabin crew who did not set a good example to her peers and gave me a false and poor impression of Malaysian people. Thankfully I met many warm and friendly Malaysian people during my stay.

If Malaysia is to make a success of it’s campaign to visit Malaysia in 2007 it could do well to start by looking at poorly performing staff working for it’s national carrier. I would hate for anyone else to be treated as I was, I felt upset, embarassed and my trip to Malaysia got off to a bad start and all for simply asking for a cup of tea. Ridiculous!! Needless to say that now I am home I will be taking up my complaint with Malaysia Airlines to ensure that this member of staff is dealt with appropriately and to ensure that no other passengers are treated the same way.

According to Ismail Nasaruddin Abdul Wahab, president of the Malaysian Airlines Flight Attendants Association, the Malaysia Airlines cabin crew members believe that the film casts a negative image of the profession, The Associated Press reported.

Ismail also said that the union wants the scene from the comedy “Buli Balik” (The Bully Returns) removed and the producers to make a public apology. The Malay Mail, a local newspaper, reported that the reference to stewardesses as toilet cleaners was made by an actress playing a female patient waiting to see a psychiatrist.