Sunday, December 2nd, 2018


MAB’s progress in line with recovery plan

KUALA LUMPUR: Although relatively little is being said and publicised about Malaysia Airlines Bhd’s (MAB) recovery plan, a substantial amount of progress has actually been achieved in its business operations in line with the plan, which aims to revive the country’s national carrier and sustain its profitability.

Group CEO Captain Izham Ismail said improvements in terms of cost base, productivity, information technology (IT) systems and customer experience were among the achievements chalked up by the company, thanks to the five-year Malaysia Airlines Recovery Plan.

In an interview with Bernama, he said plans had been put in place to address the airline’s performance going forward and this had yielded improved performance for the first half of this year.

The airline performed stronger in the first six months of this year than in the same period of 2017, adding that the key focus for the airline in financial year 2018 included driving revenue.

“This will be underpinned by continuous improvement in customer experience, product quality and operational excellence while maintaining a productive and competitive cost base,” he said.

According to Izham, MAB’s cost base has been significantly changed to bring it in line with its peer network airlines.

As of today, the group has one of the lowest cost bases among its peer network airlines on a cost per available seat kilometre basis.

The company has also seen material gains in productivity with a more competitively sized workforce, which is further complemented by a commitment towards continuous talent development.

“A stronger local talent pool has now been established,” he said.

On the group’s IT system, which is an integral part of overall airline operations, Izham said the complete overhaul had now been completed.

He said the new Passenger Service System and migration to a cloud-based data centre had improved reliability and cyber security, as well as enhanced agility and better time-to-market.

He said customer experience had also improved with market-driven metrics based on the company’s customer survey and net promoter measures showing significant positive gains over the last two financial years.

On the operational front, Izham said the supply chain in engineering had been significantly tightened, which had helped the airline’s on-time performance, although it was still impacted by external factors beyond its control.

“Since the set up of NewCo (MAB, which took over the operations, assets and liabilities of Malaysian Airline System Bhd or MAS) in 2015, we are showing progress and have recorded a double-digit compound annual growth rate growth (of 21%) over the last three years.

“That is improvement straight to the bottomline,” he explained.

MAB managed to record “steady year-on-year (y-o-y) performance” in the second quarter of 2018, with a marginal yield improvement, while revenue per available seat kilometre remained steady with a growth of 2% y-o-y.

Going forward, Izham said MAB would continue to focus on the customer while making sure to deliver a strong schedule and great service for its customers.

The airline also aimed to build a diverse Asia-Pacific network with a simplified fleet structure and operations to ensure consistency, and removing complexity in service delivery as well as pursuing a gradual and progressive growth strategy across markets, he said.

Commenting on Khazanah Nasional Bhd’s plan to relist the national carrier as part of the recovery plan sometime from now until 2020, he said “the plan has always been to re-list Malaysia Airlines”.

“We are working hard to stabilise the company and return it to profitability before any initial public offering plans can be considered,” he added. Khazanah owns 100% equity interest in MAB.

In 2014, the sovereign wealth fund had injected investments amounting to RM6 billion to support the airline’s five-year turnaround plan with the aim of returning MAB to profitability by late 2017 and to relist the company by 2018 or 2019.

Khazanah de-listed MAS from Bursa Malaysia on Dec 31, 2014.

US, China agree to trade war ceasefire, more talks

BUENOS AIRES, Dec 2 — US President Donald Trump and China’s Xi Jinping agreed yesterday to suspend any new tariffs in the escalating trade war between the world’s two largest economies, even if huge existing duties will remain in place….

Fama records RM6.33m sales at MAHA 2018

SERDANG, Dec 2 — The Federal Agricultural Marketing Authority (FAMA) succeeded in recording a sale of RM6.33 million via six segments it handled at the 2018 Malaysian Agriculture, Horticulture and Agro-Tourism Bazaar (MAHA) Show as of yesterday….

Genting Malaysia posts RM1.5 billion net loss

PETALING JAYA: Genting Malaysia Bhd swung into a net loss of RM1.49 billion for the third quarter ended Sept 30, 2018, on a RM1.83 billion impairment loss on the group’s investment in the promissory notes issued by the Mashpee Wampanoag Tribe (Tribe).

The impairment loss was due to the uncertainty of recovery in the group’s investment following the US Federal Government’s decision concluding that the Tribe did not satisfy the conditions under the Indian Reorganisation Act that allows the Tribe to have the land in trust for an integrated gaming resort development.

However, the group continues to work closely with the Tribe on options that include a legislation being introduced in US Congress which, if passed, will entail the US Federal Government to reaffirm the land in trust for the benefit of the Tribe.

The impairment loss can be reversed when the promissory notes are assessed to be recoverable.

For the corresponding quarter in the preceding year, the group made a net profit of RM193.77 million.

Revenue was up 14.51% to RM2.6 billion, compared with RM 2.27 billion with higher volume of business in the mass market segment following the opening of new facilities and attractions under the Genting Integrated Tourism Plan, which have been well received.

In a separate statement, the group said it is cautious on the opportunities and growth potential of the leisure and hospitality industry amid the uncertain consumer spending environment.

In Malaysia, the announcement of a revision in casino duties and casino license fees in Budget 2019 will impact the group’s earnings next year.

The group is reviewing its marketing strategies and will streamline its operations and cost structure to mitigate the impact of the tax increases.

In the meantime, the group remains focused on the progressive roll out of the new Skytropolis Funland indoor theme park this year.

In the UK, the group said it is committed to improving overall business efficiency and growing its market share in this segment.

While in the US, the group will continue intensifying its direct marketing efforts to increase visitation and frequency of play at the property.

Genting Malaysia’s performance in the third quarter pushed the group into net losses for the cumulative nine-month period ended Sept 30, 2018 of RM739.73 million, compared with a net profit of RM711.51 million for the corresponding period in the preceding year.

Revenue for the period was 9.35% higher at RM7.42 billion, compared with RM679 billion.

US, China agree on trade war ceasefire

BUENOS AIRES: China and the United States agreed to a ceasefire in their bitter trade war on Saturday after high-stakes talks in Argentina between US President Donald Trump and Chinese President Xi Jinping, including no escalated tariffs on Jan 1.

Trump will leave tariffs on US$200 billion (RM835.8 billion) worth of Chinese imports at 10% at the beginning of the new year, agreeing to not raise them to 25% “at this time”, the White House said in a statement.

“China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries,“ it said.

“China has agreed to start purchasing agricultural product from our farmers immediately.”

The two leaders also agreed to immediately start talks on structural changes with respect to forced technology transfers, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture, the White House said.

Both countries agreed they will try to have this “transaction” completed within the next 90 days, but if this does not happen then the 10% tariffs will be raised to 25%, it added.

The Chinese government’s top diplomat, state councillor Wang Yi, said the negotiations were conducted in a “friendly and candid atmosphere”.

“The two presidents agreed that the two sides can and must get bilateral relations right,“ Wang told reporters, adding they agreed to further exchanges at appropriate times.

“Discussion on economic and trade issues was very positive and constructive. The two heads of state reached consensus to halt the mutual increase of new tariffs,“ Wang said.

“China is willing to increase imports in accordance with the needs of its domestic market and the people’s needs, including marketable products from the United States, to gradually ease the imbalance in two-way trade.”

“The two sides agreed to mutually open their markets, and as China advances a new round of reforms, the United States’ legitimate concerns can be progressively resolved.”

The two sides would “step up negotiations” toward full elimination of all additional tariffs, Wang said.

The announcements came after Trump and Xi sat down with their aides for a working dinner at the end of a two-day gathering of world leaders in Buenos Aires, their dispute having unnerved global financial markets and weighed on the world economy.

After the 2½ hour meeting, White House chief economist Larry Kudlow told reporters the talks went “very well,“ but offered no specifics as he boarded Air Force One headed home to Washington with Trump.

China’s goal was to persuade Trump to abandon plans to raise tariffs on US$200 billion of Chinese goods to 25% in January, from 10% at present. Trump had threatened to do that, and possibly add tariffs on US$267 billion of imports, if there was no progress in the talks.

With the United States and China clashing over commerce, financial markets will take their lead from the results of the talks, widely seen as the most important meeting of US and Chinese leaders in years.

The encounter came shortly after the Group of 20 industrialised nations backed an overhaul of the World Trade Organisation, which regulates international trade disputes, marking a victory for Trump, a sharp critic of the organisation.

Trump told Xi at the start of their meeting he hoped they would achieve “something great” on trade for both countries. He struck a positive note as he sat across from Xi, despite the US president’s earlier threats to impose new tariffs on Chinese imports as early as the next year.

He suggested that the “incredible relationship” he and Xi had established would be “the very primary reason” they could make progress on trade.

Deutsche Bank chief dismisses takeover speculation

FRANKFURT, Dec 2 — Deutsche Bank is not at risk of a takeover, its chief executive told a German weekly paper after its shares fell to a record low on Friday in the wake of a two-day raid related to money laundering allegations. Speculation about…

Ministry to fully utilise RM20m fund for promoting SMEs’ product

LABUAN, Dec 2 — The Ministry of Domestic Trade and Consumer Affairs will fully utilise the RM20 million fund allocated to it for the promotion of small and medium enterprises’ (SMEs) products and the Buy Malaysian Products campaign nationwide….

Malaysia Airlines’ operational progress in line with recovery plan

KUALA LUMPUR, Dec 2 — Although relatively little is being said and publicised about Malaysia Airlines Bhd’s (MAB) recovery plan, a substantial amount of progress has actually been achieved in its business operations in line with the plan which…

Trump to notify Congress in ‘near future’ he will terminate Nafta

ABOARD AIR FORCE ONE, Dec 2 — US President Donald Trump said yesterday he will give formal notice to the US Congress in the near future to terminate the North American Free Trade Agreement (Nafta), giving six months for lawmakers to approve a new…

US agrees to suspend new China tariffs for 90 days

BUENOS AIRES, Dec 2 — The United States said yesterday that it agreed in a long-awaited summit with China to suspend new tariffs for 90 days as the two powers seek to end a trade war. The White House said a threatened increase of tariffs on US$200…