Kudos To Idris Jala

When Idris Jala was appointed CEO, I was skeptical whether he could turn around the culture at MAS. Things have gotten so bad that MAS was better known as the airline that won't take off on time, or arrive on time, and is likely to be the most expensive carrier. One thing though, I do agree that its Business Class is one leg above the rest. Jala has done wonders on things financial. Culturally, it still a work-in-progress, and hopefully Jala will be able to inject the necessary changes there as well.

Malaysia Airlines managing director Datuk Seri Idris Jala has been named Orient Aviation Person of the Year 2008 for the being the driving force behind the national carrier's "amazing comeback."

While many had once written the airline off, Jala managed to return the company to profitability, compared to when it was facing record losses when he took over in 2005, according to a statement from the airline released today.

In 2007, Malaysia Airlines recorded a profit of RM851 million, its highest in 60 years of operation and is only one of the 6 airlines in the world recognized as a "5-Star airline" by Skytrax, UK, an accolade that it has won for three consecutive years, 2006-2008.

Jala said: "I am pleased and honoured to accept this award. My team and I have worked hard to turnaround our airline. Now, we are embarking on a business transformation journey in pursuit of our vision to become the World's Five Star Value carrier. I am blessed with a great team of people who are passionate about the airline."

Orient Aviation Chief Executive, Mr Barry Grindrod said: "Jala has changed the way the company does business. He acts speedily and decisively.

In the last three years, he has slashed US$500 million off costs at MAS. He is on target for additional cuts of US280 million (RM980 million) in operational costs this year.

Significantly, he has also restored morale at the carrier, which was rock bottom when he arrived.

"Jala's stewardship at MAS is an object lesson for any struggling airline management team. And word travels fast.

He may be a relative "new boy" to aviation, but there is no shortage of people wanting to hear about his turnaround miracle. He has quickly become one of the most highly respected CEOs in the industry worldwide.

Orient Aviation, one of the most respected aviation magazines in the Asia Pacific region, presents the Person of the Year award each year to the airline Chief Executive judged to have done the best job in managing his carrier in the previous 12 months.

Previous winners of the award, which was established in 1999, include Chew Choong Seng, Singapore Airlines; Geoff Dixon, Qantas Airways; Jaime Bautista, Philippine Airlines; Kanok Abhiradee, Thai Airways International and David Turnbull, Cathay Pacific Airways.

p/s photos: Zhou Wei Tong

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.