Corporate Ethics 101

Malaysia Airlines (MAS) continues to bleed with RM1 Bil loss for 2013. That is not news.

The news is when Air Asia’s Head Honcho Tony Fernandes criticised MAS for still losing money despite of 16% cost saving.

It’s not because he doesn’t have the right to criticise MAS (since he is a taxpayer.) Even if his criticism is justified, he should remember that he is running AirAsia- a direct competitor to MAS.

Therefore we should ask- where is your corporate ethics Tan Sri Tony?

It would be very unusual to hear any CEO to slam their business rival. I can’t remember any nasty remarks from CEO of Perodua on Proton when the national car maker registered losses for years.  Nor should we expect CEO of Emirates, Qatar Airways or Malindo Air to take a swipe at MAS.

Admittedly Air Asia has become a very successful low cost airline in the world but that doesn’t mean Tan Sri Tony has a free hand  (or tongue?) to say anything that he wants. Not only MAS, he also lambasted MAHB for being a sole player in managing airports in Malaysia.

But luckily Tony’s vicious comment backfires. Now we know Air Asia receives biggest part of incentives despite it not contributing highest number of passengers or revenue to MAHB. Is it a modern story of ‘bite the hand that feeds you?’

If Tony doesn’t have anything good to say about MAS, at least please exercise restraint. You must understand MAS is different from AirAsia. MAS has unions whereas AirAsia don’t. MAS is also doing a great national service (and be responsibly) by not laying off anyone just to cut cost.

It should be noted currently Qantas has announced a loss of USD300 million (very much like MAS) and they are mulling to slash more than 2000 workers. MAS can do the same but they don’t and still keeping the current bloated organization instead.

As a cost-sensitive businessman, Tan Sri Tony should understand this. But why he still making comments like someone who is ignorant?


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12 thoughts on “Corporate Ethics 101

  1. Fazillah says:

    I think the government should stop using air asia for their travels. All government travel should remain with malaysia airlines for both domestic and international routes.

    • MatRodi says:

      Yes govt can do that but in the long time, both parties will be hurt as airasia’s loss will result to less tax to the govt. :-p unless firefly can be a serious competitor to airasia. until then we have almost monopoly LCC in Msia. (Malindo is doing a great job).

      • Fazillah says:

        Why i said what i said is because tony does not realise how much government business he is getting. MAS being the national carrier could easily have gone back to the government and protested on aa being given government sales. But they did not. They were willing to share. Why is tony biting the hand that feeds?

        MAS, has for a very2 long time, not been profitable because of its csr in providing discounted travel fares to various sectors of the rakyat. Ie pensioners, govt travel, sp fares while absorbing hikes in fuel etc.

        It cannot be denied that mas was also not prudent in its spending. Personally, i think that a lot of money can be saved from the perks that are being offered to their staff and family. These perks should be reviewed and should be made available to the staff only. This will definitely save mas a lot of money. Also all peripherals that are required by mas on their aircrafts including the meals, cutlery etc should be monitored by an independent body. Pilferage is high because of lack of controls.

        My 2 sen worth.

  2. malaysian says:

    “MAS also is doing a great national service (and be responsibe) by not laying off anyone just to cut cost.” This is utter rubbish to the max. You are saying that we should use tax payer money to bailout them time and again just to keep those non productive MAS employers. Why not just cut cost by firing them and this is a great national service to Malaysia by not wasting anymore tax payer money to MAS. MAHB depend to AA very much especially in their new KLIA2. Without AA bring in the customers for MAHB, MAHB is not going to recoup their capital of 4billion (which was ballooned from initial 2 billion). MAS should be allowed to have a natural death and Malaysian tax payer should not have the responsibility to take care of those Union workers.

    • MatRodi says:

      Natural death. hmm I dont really like this term because it looks good on paper but in reality, the repercussion is so severe. Can you imagine if we lay off 5000 workers just to cut cost? Imagine 5000 jobless workers we sent into the market. Not only it makes the govt unpopular, we can expect more serious social problem.

      I do agree that we should stop using taxpayers money to bail out MAS. (in this case MAS is using khazanah’s money about RM2.7 bil from cash call exercise)

      But it is very unfair for Tan Sri Tony to comment on something he is aware of. He wants MAS, MAHB and the govt to do this and that. But will he considers to hire any of MAS workers? If he thinks MAS is not his rival and he hates so much the fact that MAS is losing money since he is a taxpayer, why don’t he gives some constructive criticism?

      Strangely, he doesnt make an issue with others country’s airport operator who charge AA higher than MAHB. Please look at Japan, Indonesia and India- what have they done to Tony.

      • the other malaysian says:

        Actually I would agree with what malaysian said. Cut cost by, privatise MAS, let it start small again, restructure and learn to be competitive and outdo the others and silence the critics. For MAS to fire 5000 workers being unpopular for the government, I feel that its not the governments job to hire, but the private enterprises that will hire, and the free market that will protect the workers. How? If these 5000 are hard workers with ample experience in the aviation and air hospitality industry or any other related fields, they will be hired. I am of the opinion that if the government does decide to let MAS go private, many in malaysia will be glad to see such a move as it is wise and prudent. We need a limited government, one that does not reach its hand onto too many things that are best run by private enterprise.

        I am sure Mr Tony has earned his way to make comments like that. Either way you put it, MAS is in big trouble and Malaysians (the 1.7million tax payers) never signed up for this.

        The last comment you made about the issue with other airports, well I guess its cause he is a high income bracket tax payer, I guess he’s just concerned with where his money is going, like all tax paying malaysians are. Again, where did you get the information that MASB services are subsidised?

  3. Ang SA says:

    He is a nothing less than a big bully and when he doesnt get his way, he is a crybaby. Much like some famous politicians and NGO we all know. Just like them he is No Action, Talk Only. He only knows how to criticise but dont offer solutions. All to steer away from the public discovering his weakness and shortcomings. 1 day he will fall flat, just like others who have done things so arrogantly. Karma. Wait for it.

  4. Scheiss.Geist says:

    MAS is doing national service by providing rural air services in Sabah & Sarawak – services AirAsia gave up on.

    Workers have the right to form unions. Does AirAsia respect that right?

    MAS may need tighter controls over financial mis-management, such as in terms of prices they pay suppliers of services, etc. but it should not make the workers pay.

    If MAS lays off those workers as Tony wants, is he prepared to give them jobs in AirAsia instead? If not then shut up.

    This man is a neo-liberal and I despise all neo-liberals.

    • MatRodi says:

      Whether he is a neo-liberal or neo The Matrix is my less concern. :-p But the fact that he made his first million or hundreds million thanks to the generous govt and MAHB policy. Why suddenly he become so brave in twitter and made scathing remarks to MAHB? Is he thinks that the cost of operating airports need to be subsidised so that AA can benefit from the lower airport charge? Yet at the same time he hates when taxpayers money have been used for MAS survival. Nonsense.

  5. Corbulo says:

    Mat Rodi – you have overlooked Richard Branson who recently criticized the Australian government and Qantas.

    And I think that you have misunderstood what corporate ethics is all about.

    What Tony Fernandes said about MAS may be in bad taste, but at least he has the guts to state his opinions openly and not hide behind a cloak of anonymity, unlike certain commentators that we know!

    If the Australian government is unwilling to bail out a national icon like Qantas (and Holden before that), what signal does that send to the Malaysian government? That there are better uses for public funds than bailing out (again) a national “icon” that has lurched from crisis to crisis.

    If you take an unsentimental look at the global airline industry, how is MAS (given it’s strategy of slashing fares in the interest of putting bums on seats) going to compete against the LCCs on the one hand and full-service competitors like SIA, Cathay Pacific and the Gulf Airlines (Emirates, Etihad and Qatar Airways)?

    Do Malaysians have a compelling reason to fly on MAS when there are so many other alternatives out there?

    • MatRodi says:

      The fact that Richard Branson is doing the ‘Tony’ doesnt mean Tony was right.

      My point is- everyone can criticise MAS. Be it politician or people on the street. But it is really strange for someone who is your direct competitor to say nasty things on you. Have you ever heard Maybank CEO comment on CIMB performance? Petronas to Shell’s shale gas losses? Celcom to maxis’ dismal performance lately? No.

      MAS’ strategy ‘load active, yield passive’ is not that great idea but given current competitive market, what choice do they have? The main issue is MAS operating cost is higher than any other airlines. They have registered a load factor about 81%- higher than SIA. They already cut cost about 16% and stop flying to loss-making routes. But the problem is yield is lower than the cost where the bulk of it come from the bloated organization.

      MAS is offering the same quality product like Emirates and SIA (in fact I personally believe these are the only two airlines in the same class like MAS. The rest are just below the MAS standard.)

      So if MAS is going to sell the seat higher than Emirates and SIA, you and I will run away. But if they choose to be competitive such as slash a bit its fare, they are not going to make a profit.

      Damn if they do, damn if they don’t.

  6. […] I can agree with Mat Rodi – asking where is his corporate ethics.  I also can agree and understand as to why MAHB has to give a response towards Tony […]

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