1. "What I am more worried about is that the carrier does not seem to be reacting fast enough to passengers' needs. They are not doing enough."
2. "One of MAS' main problems is that it adopts a herd mentality when it comes to fuel hedges. There is no real vision and MAS is obviously afraid to take risks,"
3. . "Please try to comprehend that in 2007, MAS Cash and bank reserve was RM 5.25 billions and in 2008 dropped to RM 4.62 billions and end of June 2009 further dropped to RM2.94 billions (a rapid rate of cash depletion of almost RM2.31 billions in a mere 18 months). Don't be ignorant, defensive and take things for granted" masliberators
2. "One of MAS' main problems is that it adopts a herd mentality when it comes to fuel hedges. There is no real vision and MAS is obviously afraid to take risks,"
3. . "Please try to comprehend that in 2007, MAS Cash and bank reserve was RM 5.25 billions and in 2008 dropped to RM 4.62 billions and end of June 2009 further dropped to RM2.94 billions (a rapid rate of cash depletion of almost RM2.31 billions in a mere 18 months). Don't be ignorant, defensive and take things for granted" masliberators
http://us.mc332.mail.yahoo.com/mc/compose?to=presenna@nstp.com.my 2009/06/15
ANALYSTS are mixed about whether Malaysia Airlines (MAS) (3786) is doing the right thing in its fuel contracts, but they agree that the outlook for the national carrier looks sombre."I do not find the mark-to-market losses it posted all that worrying because, it is something that most companies will have to go through come 2010, and MAS did take some measures to mitigate its affects," Maybank Investment Bank senior analyst Khair Mirza told Business Times.
ANALYSTS are mixed about whether Malaysia Airlines (MAS) (3786) is doing the right thing in its fuel contracts, but they agree that the outlook for the national carrier looks sombre."I do not find the mark-to-market losses it posted all that worrying because, it is something that most companies will have to go through come 2010, and MAS did take some measures to mitigate its affects," Maybank Investment Bank senior analyst Khair Mirza told Business Times.
"What I am more worried about is that the carrier does not seem to be reacting fast enough to passengers' needs. They are not doing enough."
"With the second quarter being traditionally its weakest quarter, and the H1N1 flu gathering more intensity, it is hard to imagine the carrier making a profit (in the second quarter of 2009)," he added.Khair estimated that during the January-March period, MAS had lost 30 per cent of its passengers to its competitors.
On Friday, MAS reported a net loss of RM695 million in its first quarter ended March 31 2009, versus a year-ago net profit, largely due to its fuel hedging contracts.Notwithstanding the RM640 million mark-to-market fuel hedging losses, the carrier posted RM138 million in operating loss.It also said it had spent some RM400 million to restructure its hedging contracts into 2011.Standard & Poor's Asian Equity Research analyst Shukor Yusof said MAS' mark-to-market losses is an indication of what to expect from the carrier in the coming months.
For MAS to be a trend setter, he believes that it should take a more proactive approach in its fuel hedging strategies."One of MAS' main problems is that it adopts a herd mentality when it comes to fuel hedges. There is no real vision and MAS is obviously afraid to take risks," Shukor said.The airline could still make a profit in the second quarter, though, albeit not an operational one, again due to the airline's new accounting standard.This is because just as how the airline saw a paper loss of RM640 million in the first quarter, it could see a paper gain of RM1.1 billion on fuel hedging if oil prices average US$66 a barrel in the second quarter.
Meanwhile, in a reply to a local blog posting on Rocky's Bru on Saturday, MAS executive director and chief financial officer Tengku Azmil Zahruddin said any business in which its major cost item doubles to US$180 per barrel in six months, only to fall to US$40 per barrel in the next six months, must take steps to protect itself against such volatility.He added that because airlines typically sell seats six months into the future and sometimes even up to 340 days in advance, the need to hedge against the unpredictability of fuel price is critical."As with other airlines which hedge, MAS only enters into long fuel hedges, where we are buying fuel, and do not speculate by selling short in the fuel market, as may be the case with certain low-cost carriers," Tengku Azmil said.
Source: http://www.btimes.com.my/Current_News/BTIMES/articles/shukk/Article/index_html
More details: here, here and http://www.accessmylibrary.com/coms2/summary_0286-38103006_ITM
Source: http://www.btimes.com.my/Current_News/BTIMES/articles/shukk/Article/index_html
More details: here, here and http://www.accessmylibrary.com/coms2/summary_0286-38103006_ITM
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