MAS - Hitting The Nail On The Head (Finally)

As reported in the New Straits Times today, Malaysia Airlines has invited employees to report corruption, security risks and other bad practices at the national carrier under a new "whistle-blower" policy. The airline's new managing director Idris Jala has encouraged employees to report any knowledge of graft, negligence, safety and security issues or abuse of power to an independent committee. "This policy is being introduced to provide a safe and acceptable way for you to raise your concerns about malpractice affecting MAS without fear or repercussions," Jala said in a circular to the staff. "It allows you to raise matters in an independent and unbiased manner," said Idris. Idris said employees would not be expected to prove their allegations, and vowed to protect those who passed on information. "Any attempt to retaliate against, victimise or intimidate a whistle-blower making a good-faith report is a serious violation and shall be dealt with by way of disciplinary action," he said.

Idris has been tasked with turning around the airline, which ended 2005 in a troubled state after two consecutive quarters of losses which triggered calls for costs to be slashed. Even though I have often trashed MAS, its because of the "unhealthy corporate practices" that abound and seemingly allowed by previous management. Before everyone start jumping on the bandwagon to trample on MAS based on very bad financials for its last 2 quarters - the bulk of the losses came from not managing their fuel oil exposure well enough. Operationally, MAS still rank well in airline/cabin crew surveys. So, all is not that bad, nobody will focus on the "wrong doings and thievery" in MAS if they hedged their fuel properly.

I think Jala has hit the nail on its head. MAS looks to be a splendid recovery play. The items noted in Jala's speech indicates that he understands the crux of MAS' problems. The rest should just fall into place if the graft, abuse of power, negligence, safety & security issues are being addressed. Just hope that Jala has the management vision and political will to push through the needed changes. If I was Jala, that's what I would do immediately, not that he doesn't know what is "wrong" with certain corporate practices - he does, but by using this method, he avoids pulling the trigger himself and can collectively gather muscle and political will to make the necessary changes. The other big thing which dragged MAS down was fuel oil exposure, and that's probably the main reason he was scouted from Shell. Giving him the benefit of doubt, he is on the right path. Political will is on his side too as everyone is putting in their two sen worth on how to run MAS and on what is wrong with MAS. The powers to be no longer see MAS as a "plaything", it has become political and those concerned will NOT be willing to protect their turf to stop MAS from proper restructuring.

But before everyone starts waving flags for a heroic Jala, the whistle-blower policy is almost exactly like the one imposed by the new GLC-sanctioned-Khazanah-approved "Kristal" memo to all Telekom Malaysia staffers back in October 2004. So, this is not the brainchild of Jala, but at least he is borrowing the right stuff to use.