MAS revealed

Working with several large multi-nationals over the course of my career, one of the common features i've noticed is that large organizations rarely do things cheaply when there is a more expensive route to take.

Paying a consultant RM5 million to tell us what we already knew. Throwing more good money at a project that has lost a lot of great money already. Paying RM5 to do something RM1 would have done.

A terrible amount of operational and organizational inefficiencies seem to be the hallmarks of large organizations -- it looks like MAS is no different. It was revealed in the NST that 76 MAS routes across the globe were not profitable, and still they ran those routes.

Airline officials told the New Straits Times that MAS registered losses of nearly RM500 million on 76 international routes, while breaking even or making money on 39 other routes. The most unprofitable routes were those covering the Orient and North America, where losses were RM167 million, followed by Europe/Middle East (RM151 million), Australia/New Zealand (RM91 million) and Asia (RM40 million). Of the 37 Orient and North American routes, only nine were profitable. Of the 19 Europe/Middle East routes, only three were profitable.

via NST.

You just can't help but wonder why did MAS persist with these routes, in the process losing RM500 million over the years. Was it to maintain appearances? Was it due to dogged stubborness? Was it because the routes were inherently profitable but major screw-ups in the organization made it impossible to get a profit off them? Its just mind-boggling the amount lost by doing something you knew was losing you money.

Sometimes, i reckon you should allow these big companies be run by small businessmen -- for them the rule is so much more simple: every day, make more money then you spend = profits. How hard can that concept be to understand?

Idris Jala is doing the right thing, so far. Liquidating assets, cutting costs, building up a war chest of cash (with the help of the rakyat's money of course) -- but some more tough decisions need to be made soon, like cutting the workforce down in size.

Its still not too late for our flagging air carrier to turn things around. The next few months will be interesting for MAS.