Fire Department Safety Officer Week 3 - building construction Essay

Fire Department Safety Officer Week 3 - building construction - Essay Example Masonry comprise of brickwork and blockwork. Extreme heat causes masonry to expand and crack. However, this would take considerable time. Bricks are toughened by conflagration, and therefore, are able to withstand fire longer. Concrete is often toughened with steel. If the reinforcement is superficial, the extension of the steel causes the concrete to expand. The expansion causes fissures. Timber is the adversely affected by conflagration. The ignition point of timber is lower than other elements. Exposure to heat and oxygen results in incineration. Combustion starts with the charring of the surface, and thereafter, the structural integrity is compromised. Prolonged fire burns the timber to ashes. Metal is extensively affected by fire. Heat elevates the kinetic energy of the atomic configuration of the metal. The structure weakens and looses strength. At 500 degrees, it may loose 50% of its strength. Further, steel may melt slightly and warp slightly in adverse heat (Dodson,

Religious and Ethnic Diversity Paper Essay Example for Free

Religious and Ethnic Diversity Paper Essay The religious group that I have chosen is Hinduism and the ethnic/racial group that is not my own that I have chosen is Black (African Descent). I have chosen these two to explain how they are similar and how they are different. Hinduism is a religion that most people know nothing about. They are one of the world’s oldest religions as it has no beginning and precedes recorded history. Hinduism is a religion that leads the individual to personally experience the truth within themselves and reach full consciousness where man and God are one. After reading I have found that Hinduism differs from other religious groups because they believe in reincarnation whereas the other religious groups believe that once a person dies they either will go to heaven or hell depending on how they were when they were alive. The experience of Hinduism and others that do not share their beliefs or practices is criticism. They are often judged and criticized because they fail to distinguish between revelations. This religious group has contributed to American culture because they don’t believe in violence. They also contributed to the International Society for Krishna Consciousness. Some examples of prejudice and discrimination against Hinduism would be the Caste system or saying that they all burn their wives as well as discriminate against India where most come from. After reading the information to write this paper I must say it has helped me to understand this religion because I didn’t know that they were so much criticized. From what I read it seems like a very peaceful religion. They believe in reincarnation which I believe is possible, I mean, â€Å"why does a person have to go to heaven or hell†? I think that their religion is against violence which we definitely could have less of. The racial group that I have chosen was Black of African descent. This group differs from others because they have gone through so much over the years. They have experienced slavery which many other religions haven’t as they more so experienced discrimination. Blacks have not had such a great experience with other races because of always being mistreated because of their color. I think that they were brought over for slavery and still experience this even now these days from certain types of other races. Blacks have contributed to American culture though business and through entertainment. Most of the entertainment business is African American as well as sports and now we even have a black president. All very good contributions to American culture. Some examples of discrimination would be things like unequal pay for blacks performing the same work as whites, isolating blacks to only work in certain areas or specific locations, routinely denying black’s promotions, laying off blacks while whites keep their jobs and take on theirs as well. All of these are prime examples of discrimination that blacks go through in the United States. The sources of this discrimination would be whites or other races that were not black. Most of the cases that I read about though were whites still discriminating against black even after all the movements to move past racism. What I learned about this racial group is that even after all these years they are still faced with discrimination more than other racial groups. I can’t really say that I have learned any more than I already knew just because I see this happen regularly. I have a black/Cuban fiance and I have seen jobs do these things to him and now we have 2 boys that are mixed with white and black and have seen them faced with discrimination just because of the color of their skin. In conclusion, I believe that Hinduism and Black (African descent) both experience similar discrimination if the fact that they are perceived by first impressions and by the color of their skin. They are not given the luxury of being spoken with or getting to know them without the preconceived notion of their skin color. Both Hinduism and Blacks contribute to American culture business wise and yet many fail to know that. I can’t really say they are different because these two groups both experience prejudice and discrimination quite often. They are both groups of people that have done nothing wrong and just want to be a part of the world. References Nine Beliefs of Hinduism. (2013). Retrieved from http://www. himalayanacademy. com/readlearn/basics/nine-beliefs Hinduism and the Encounter with Other Faiths. (2008). Retrieved from http://www. worlddialogue. org/content. php? id=59 The Black Factor. (n. d. ). Retrieved from http://theblackfactor. blogspot. com/2008/03/examples-of-discrimination-harassment. html.

Plato and Aristotle Theory of State Comparison

Plato and Aristotle Theory of State Comparison Compare and contrast Plato’s and Aristotle’s accounts of the ideal ‘polis’ or state. Introduction Plato (student of Socrates) and Aristotle (student of Plato); two of the most persuasive rationalists of the splendid time of Greek era; Plato and Aristotle have colossally helped political rationale, aside distinctive domains. This essay will evaluate two diverse methodologies whilst discussing the reasons of comprehension, disagreement and epistemology itself; as regards the cures on the ideal state by both these Socratic academics. A State or polis is more than a legislature that is clear, governments change, but a state perseveres. A state is the method for guideline over a characterized or sovereign domain. It is made up by an official, an administration, courts and different foundations. (https://www.globalpolicy.org/nations-a-states/what-is-a-state.html). Plato was the first Greek scholar to attempt a watchful, deliberate investigation on systematic analysis in political thought. This essay will furthermore examine Socrates impact on Plato. It then takes a gander at Platos the Republic, and considers his model of a perfect constitution. It then concludes with a talk of Aristotles mind boggling and modern examination of political constitutions (Plato to Nato page 18) The ideal state The Ideal simply implies to an origination of something in its total flawlessness (perfection) Thusly, an immaculate state must be an express that is concentrated around a consummated standard. (http://www.oxforddictionaries.com/definition/english/ideal). A State is more than a legislature; that is clear. Governments change, however states persevere. A state is the method for guideline over a characterized or sovereign domain. It is made up by an official, an administration, courts and different foundations. (https://www.globalpolicy.org/nations-a-states/what-is-a-state.html). In their agreement and dis-agreement both Plato and Aristotle recommended what the idealised states should be based upon and how they ought to be. For Plato and Aristotle, the end of the state is good; as value (Justice) is the premises for the ideal state. Rulers= wisdom+ rational, Soldiers= Courage+ spirited, Artisans= Temperance+ Appetitive. The Ideal state ruled by the philosopher was made conceivable through an extravagant and thorough plan of instruction. The hypothesis of philosopher ruler was the linchpin of Plato’s Ideal state. It was gotten from the conviction that the scholar had the knowledge, judgment and training to lead. Decision like any other undertakings required abilities and capabilities. And its point was the general prosperity of all. A good ruler was one who saved the lives of his subjects, as well as changed them as people. A Philosopher is an ideal person to rule, for he wouldnt be enthused about getting wealth for amplification toward oneself. Socrates characterized a philosopher as one who cherished astuteness, had a passion for learning and was dependably and enthusiastic to learn. Furthermore Socrates emphasised on philosophers being individuals who cherished the truth. (A HISTORY OF POLITICAL THOUGHT : PLATO TO MARX, By SUBRATA MUKHERJEE, SUSHILA RAMASWAMY) A philosopher by his grasp of the idea of good was best qualified to rule, implying that knowledge could be obtained only by a select few who had the leisure and the material comforts. Plato shared the general Greek perception of that leisure was essential for the pursuit of wisdom. A philosopher would be able to administer Justice and Act for the good of the community. He would have a good character, a calm disposition and a strong mind. He would have the qualities of a ruler namely truthfulness high mind-ness, discipline and courage. Plato imparted the general Greek impression of that leisure was key for the quest for wisdom. Philosophers would have the capacity to control Justice and Act for the benefit of the community; would have a decent character, a cool manner and a solid personality. A Philosophers would also have characteristics of a ruler to be specific truthfulness high personality ness, order and boldness. (A HISTORY OF POLITICAL THOUGHT: PLATO TO MARX, By SUBRATA MUKHERJEE, SUSHILA RAMASWAMY Socrates analysed the genesis of states and urban communities, and called attention to that they emerged out of two reasons. The primary was common need and the second the distinctions in aptitudes of people was not independent and depend ended on others for subsistence. Plato made two imperative focuses. The principal was that each individual was a useful unit, allotted a specific errand with obvious commitments and privileges, which one was required to perform determinedly and carefully. It likewise underlined the way that nobody was destined to render a particular capacity. Secondly society was imagined as an issue, precise entire, in light of the distinguishment of individual gifts and contributions. . (A HISTORY OF POLITICAL THOUGHT: PLATO TO MARX, By SUBRATA MUKHERJEE, SUSHILA RAMASWAMY Education for Plato was intended to make the best possible environment for the sustaining and advancement of the human soul. In the Republic Plato dedicated more prominent space and attention to group of wives than to property. Since he was dismayed by the optional position ladies held inside the family, restricted to perform house hold errands. The dispassionate plan was focused around the premises that ladies and men were indistinguishable in regular enrichments and workforces. Having illustrated the points of interest of the Ideal state Plato inspected four different sorts of regimes. Timocracy- adoration for triumph and respect, aspiration and enthusiasm in war and cash making, Oligarchy- a state led by the affluent few, people giving more thoughtfulness regarding riches and cash making and less to uprightness, Democracy- was portrayed by permit, inefficiency, rudeness, turmoil and the majority rule man effortlessness more essentialness to his longings and hungers, no request or limitations and Tyranny- is described by the absence of sympathy toward ones subjects and a longing to get each of the one wishes. Each of these regimes had a comparing kind of individual. The inevitable destiny of every single regime was oppression. Despite the fact that Plato portrayed how regimes declined into oppression, he didnt clarify how they could recuperate from oppression. (Democracy As the Political Empowerment of the People: The Betrayal of an Ideal edited by Majid Behrouzi) The impact of Plato on Aristotle was significant and pervasive, Aristotle imparted to Plato on many different perspectives articulated in the Republic, to be specific the hierarchy of individual inclination, Justice as an issue or request among parts, and the certainty of social classes. Yet he likewise separated from his teacher many different ways, specifically on the Ideal state, the measurement of morals and the reasons for revolution. Aristotles standards of the golden mean, support of mixed constitutions, confidence in the white collar class (middle class) lead as being best for guaranteeing a steady and persevering government, and the need of property to guarantee independence and satisfy the sense of possessiveness in the person. Aristotle was censorious of the plan of the Ideal state that Plato illustrated in the Republic. He fought that Platos accentuation on solidarity rather than concordance inside a state, would just prompt extreme regimentation and the suspension of the state as a political affiliation. (. (Democracy As the Political Empowerment of the People: The Betrayal of an Ideal edited by Majid Behrouzi) Aristotle does not by any means concur with Platos evaluation of regimes in the Republic. His Politics is to a great extent a rejoinder of the contentions made in the Republic. Aristotle characterizes three different regimes Kingship, Aristocracy and Polity. These regimes have degenerate of regimes relating. Tyranny, Oligarchy and Democracy. Kingship for Aristotle it is the most wanted regime however because of its capacity to rapidly transform into oppression it is not the best conceivable regime. Kingship is basic, it is the principle by one individual who is best. In the Kingship there is stand out citizen and that is the King himself. This can be contrasted in some way with Platos dialog of the Philosopher King, despite the fact that the King in such an regime require not so much be a Philosopher however not a Tyrant either. Aristocracy is characterised as the same regime for both Plato and Aristotle, the principle by the prudent. Polity is characterised by Aristotle as a mix between Oligarchy and Democracy. Depending upon the rulers it can either be all the more intensely oligarchic or all the more vigorously Democratic. The distinction between the two being that an Oligarchic Polity would be led by a couple of chosen well off people, while the Democratic Polity would be ruled by the individuals. This regime is the thing that Aristotle calls the best conceivable regime on the grounds that it includes the standard by the ordinary class. The ordinary class frequently makes up the above all occupants in a city and in this way the administration which takes into consideration them to be subjects considers the most support in the operation of the city. (. (A HISTORY OF POLITICAL THOUGHT: PLATO TO MARX, By SUBRATA MUKHERJEE, SUSHILA RAMASWAMY) Platos political thought has been compressed as the tenet of the best man – the savant ruler who alone knows the perfect benchmarks for the state. Additionally, governing is an expertise; as the best man must be prepared to run the show. Decision is additionally a perfect. Aristotles decision belief system has been abridged as the guideline of the best laws – a decently requested constitution which involves great legislation. For him, albeit decision is an aptitude and a perfect also; it is likewise a science (despite the fact that Aristotle comprehends governmental issues as a regulating or prescriptive train as opposed to as an absolutely observational or spellbinding request). Plato proposes the abolishment of the family in his socialism, as he says the guardian and the auxiliaries might have no wife of their own, yet in as something to be shared. Kids ought to be differentiated from their guardians during childbirth and raised by the state. Subsequently, there will be more solidarity and less disharmonies. Aristotle differs and maintained that the family is the bedrock of the state and crucial society secured as per the law of nature to give mans every day needs. He scorned socialism, in his words everybody is slanted to disregard something which he anticipates that an alternate will satisfy; as in families numerous chaperons are frequently less helpful than a couple. Democracy- A legislature in which the individuals as entire or a piece of the individuals have sovereign force (regularly through chosen delegates.) (ref:Political Thinkers, David Boucher and Paul Kelly) (Democracy)Majority rules system is considered to be the best accomplishment form of government in aged Athens. It is the only form of government considered to be holding substantial political structures. It can be by large seen to be upheld in today’s society. â€Å"The 2011 Arab Spring activism in Egypt and Tunisia enlivened Syrian dissidents to take to the avenues in shows against Assads regime. Syrians voiced their misery with the stagnant political procedure and were advocates for democratic reformations†. (http://abcnews.go.com/Politics/syrian-civil-war/story?id=20112311) Platos democracy- In Greek Democracy is Demos Kratos; Demos signifying individuals and kratos signifying guideline joined together to mean ruled by the people (ref: A reader by R.Blaug and J.Schwarzmontel 2000) , majority rules system was an arrangement of government wherein the individuals chose their rulers; on account of Athens, it was, pretty much, a direct democracy rule system, where all male nationals voted in a gathering and chose by dominant part administer (chosen authorities were picked by assignments, e.g. Council, Committee, president, magistrates, courts etc) Both Plato and Aristotle saw majority rule government (Democracy) as the most noticeably awful manifestation of government. For Plato, majority rules system was the most exceedingly bad of all legitimate governments and the best of all untamed ones. (The republic Plato). Aristotle’s main criticism of democracy was that there was no one type of democracy, rather they were multiple. The reason behind these mul tiple democracies for Aristotle was due to a wide difference between citizens, e.g. there were crafts men, labourers, farmers etc. All these formed a different combination of the institution that made them democratic. (The politics Aristotle) Plato and Aristotle recommended that the perfect state be little in size, keeping in mind the end goal to achieve flawlessness simpler. The Greek state (Athens) was generally little. Additionally, it happened that the entire of Greece was partitioned into little city states, of which each one had their independent government and decision framework. In spite of the fact that, Plato and Aristotle concede to the idea of a perfect state, in any case they differ on deeper issues. Plato characterized the way of things in hypothetical terms through mysticism, rather than genuine terms (phenomena and ideal). Hence by looking to the higher structures he meant to clarify the capacity of existing information and understandings in the quest for unquestionably reality. However Aristotle was more concerned with the genuine physical gimmicks of nature, generally natural Sciences. Through their diverse methodologies in regards to the way of man, both Plato and Aristotle tried to clarify the relation ship between the individual and society, besides the necessity of government to maintain request and security. Platos perfect city-state, which he alludes to in his dialog in the Republic as the kallipolis, and Aristotles idea of the perfect relationship between the social request and government in a real city state are differentiating not with respect to the end and reason which they looked to satisfy the telos; yet rather over the proposed path in which they tried to meet that telos. . ( ref:HUTCHINSON, D. S. â€Å"Ethics† in The Cambridge Companion to Aristotle. ed) use the uws library eletrone to reference )

Dystopia in Aldous Huxleys Brave New World :: Brave New World

Dystopia in Aldous Huxley's Brave New World It's hard to imagine yet somehow so extremely close to us is the possibility of a world of ideal perfection where there is no room or acceptance of individuality. Yet, as we strive towards the growth of technology and improvement of our daily living we come closer to closing the gap between the freedom of emotions, self understanding, and of speech and the devastation of a dystopia. A utopia, or perfect world, gone awry is displayed in Aldous Huxley's provocative novel Brave New World. Dystopia is drawn on "political and emotional events, anchoring its vision of a nightmarish future in contemporary fears of totalitarian ideology and uncontrolled advances in technology and science" (Baker 22). It is the situation that costs a piece of an unhealthy environment for human beings, is the theme of the novel. The dystopian setting is brought about by technology and by higher authorities. As technology increases, the use for human beings in the work force decreases leaving an overwhelming amount of depression among humans. Therefore, a way to continue the production of technological findings is by bringing up humans from day one to accept their unhappiness as normal. By "breeding" human beings to accept the fact that they are born to do a specific group. Higher authorities know the illimination of humans' emotions is useful to stabilize what they think to be a utopian society. Huxley portrays a "perfect dystopia" where scientists "breed people to order" in a specific class (Baker 2). The purpose of this paper is to shows that Aldous Huxley clearly introduces a river of cases and incidences, which adds to the dystopia in his science fiction novel Brave New World. Aldous Huxley was born on July 26, 1894 in England into a family of novelists and scientists. Leonard Huxley, Aldous's father, was an essayist and an editor who also was a respected, leading biologist in the time of Darwinism. Both his brother and half-brother worked in the science field. Huxley received an extensive training in both medicine and in the arts and sciences. Huxley was described by V.S. Pritchett as "that rare being-the prodigy, the educable young man, the peremial asker of unusual questions" (Introduction to Aldous Huxley 1). Huxley wrote a series of novels and essays as his career progressed. Two of his best known novels are Brave New World and Island. These two novels depict a world of dystopia. In Brave New World it's author "shifts his mildly satiric observations of a limited group of people to a broader and more ironic satire of a utopian society" (Introduction to Aldous Huxley

Islamic Political Thought Essay

The division of spiritual and temporal in Christianity has taken a long time to be enacted into the political theory of the occidental mind. There is a long history of church rule behind today’s secular political thinking. Which recognizes religion as of no significance in the eye of the state. They have taken the sovereignty from God and put it into the hands of the people. In doing so they have declared collective human conscience as their guide and have rejected all sorts of scriptures of divine nature. This is leading these societies to moral ruin. Approval of homosexuality as a legal practice by the legislatures of some western countries is an indication of the moral collapse that awaits them. Although Islam has no division of spirit and mundane but still does not support theocracy or any other form of autocratic rule. It has taken a middle course, which can best be explained by the word â€Å"autonomous†. Giving the absolute power and responsibility of guidance in the hands of God, Islam lets the, Muslims to exercise unlimited sovereignty within the limits of Quran and Sunnah. Introduction This topic seemingly look very simple and the one which can have a straightforward answer. But actually it required a great insight into the historical and the political perspective of Islamic world at large. This proposition can be tackled at a number of levels. One scheme of addressing this question could be to go to the theological injunctions, that is, to argue from Quran and Hadith. The second approach could be of digging into the history and bringing out the relevant examples. There is yet another way of going through this riddle and that is to examine the evolution of political ideology in the world of Islam and comparing it with the political evolution of the other nations or rest of the world. We may adopt any of the above methodology. But in order to get a better view of things and comprehensive answer to this question. We analyze it at all the three above-mentioned levels. This will certainly render us a better understanding of not only this question but also of many other aspects of related political problems confronting the modern Muslim societies. Before beginning with our discussion it is useful that we first determine what sovereignty is? Oxford Advanced Learners Dictionary describes sovereignty as: the highest power or fully independent and self-governing. Similarly Webster’s dictionary gives the following meanings to this word: â€Å"supreme leader or the one who exercise authority in a limited sphere†. Quranic Interpretation As for as simplest mind, which goes through the Quranic text, it cannot ignore the fact that the God, that is Allah, is omnipotent, all powerful and all governing. This is the first and the last impression, which Quran leaves on any mind, no matter how naive it may be. Contrary to many doctrines, Quran declares Allah to be the sole authority on every thing that is present not only in this world but the whole of the universe. Many Quranic verses can be quoted in this context. Blessed is the Lord who holds control over all and is Omnipotent. † (Al-mulk) And again: â€Å"Exalted is the One who controls every thing and to Him you shall resurrect. † (Ya-seen) This makes very cleat that every thing lies with Allah. It flows from thence unto His creatures. Same is the case with authority and sovereignty. Allah has send man on this earth as his vicegerent. Allah has given man sovereignty to reign on this world. As Quran says, â€Å"(remember) When your Lord said to angels that indeed I shall appoint a vicegerent on Earth. † (Al-baqarah) Thus, man rules earth on the behalf of his Lord. Therefore he can exercise sovereignty with in certain limits, prescribed by Allah. Once established that sovereignty is a reign were man has been given access. We find out whether men have been given some right to make decisions for themselves or not. Is a ruler selected by Allah and imposed on men or they are encouraged to exercise their sovereign right by some collective means? Now this is an arguable question. Some section may say that a king or some sort of ruler, imposed on the society by one way or the other, has the right to exercise the sovereignty that Allah has bestowed upon men. And we also find such a precedent in the Quran, from the story of Talloot and Jalloot in sura al-baqarah we come to know that kings were imposed on men without their will and consultation, what so ever. One may cite this example from the Holy book to give weight to his argument. But one thing must be kept in minds of the people that it was the practice of Allah for the people of Israel, usually referred to as Banu-Isreal in the Quran. Who were in a stage of evolution that was to culminate at the advent of the last Prophet Muhammad (P.B. U. H)? For us i. e. the ummah of the last prophet, this rule has changed. And the new scheme under which the sovereignty has to be exercised is given in the following verse: â€Å"And they conduct their affairs with mutual consultation. † (Shura) Thus we see that Quran encourages its followers to adopt a scheme of exercising their sovereignty over themselves by a way, which hinges itself over some system of broader consultation. Of the two views, latter is the one, which seems to be accurate and closer to the rationale thinking. From the above discussion, we have reached a conclusion that Quran does recognize the sovereignty of Muslim citizen in an Islamic state and they have to device such a methodology or system, which makes it convenient for them to achieve broader consultation. Quran, similarly, rejects a single person’s claim to sovereignty and authority. Who so ever becomes a ruler of a muslim state must take the views of the society while making decisions? Now the Quran does not let loose Muslims after giving them right to sovereignty. There are a number of responsibilities that the Quran puts on their shoulders. And Quran, in its own brief but effective manner, puts them as: â€Å"Those to whom we give power, must establish the system of prayers and charity and they ask the people to do good and forbid from doing evil. † Guidance from Sunnah Sunnah i. e. Prophet’s life and actions is the biggest source after the Holy (Quran). There fore, we refer our self to this source. As the Quran says, â€Å"Consult Allah and the Prophet in a matter of discord. † At another place it is mentioned: â€Å"Surely there is the best guidance for you in the life of the prophet. † We see that the early part of the Prophet hood of Prophet Muhammad (P.B. U. H) does not give us any clue of the relation of citizens and state. It is only the latter part of his Prophet hood i. e. Medina period, in which he established a city state that we find some form or structure of a government. Now we can have any debate on the question of citizen’s sovereignty in the eye of Islam basing our investigations on this period of Prophet Muhammad (P. B. U. H)’s life. It has become convenient, for at the very beginning of Medina period there is a record of a political agreement between all the cross-sections of population of Medina. This political document in itself, otherwise, is a very important and valuable document. It gives an insight into the political situation of the Muslims in particular and Medina and it’s surrounding in general. Coming back to the question we are confronted with. We investigate this document to find if it sheds any light on this particular question. The first clause, which defines the parties to the treaty, adequately addresses the sovereignty of the citizens. 1. This is the treaty between the Prophet Muhammad (P. B. U. H), Aus and Khazraj (the helpers) and Jews of Medina and its surroundings. . Above-mentioned parties would be one group for the defense of Medina. 3. Every body is independent to practice ones religion. 4. Disputes among Jews would be settled according to their laws. It was an unprecedented treaty in respect of its very liberal approach towards communities of other religions. The point, which is very important for our thesis, is that everybody in Medina was treated as an equal party in this treaty. This was going to be the future constitution of that state for the rest of the life of the Prophet Muhammad (P. B. U. H). Although the Jews broke this accord and had to pay its price. We do not talk about Jews as is mentioned above that they were left to their own laws. But the Divine laws governed Muslims. Which were revealed to the Prophet (P. B. U. H. ) from time to time. Thus we see that Prophet Muhammad (P. B. U. H) in that state was the sole source of legislation. All the laws came from him. Many people misunderstand this phenomenon and they equate this authority of making laws by the Prophet Muhammad (P. BU. H) (that were revealed) as a precedent for authoritarian government by a single man. No, this approach is essentially flawed and contrary to the practice of the Prophet Muhammad (P. B. U. H). If we examine his political life and circumstances prevalent at that time more carefully and keenly. Then we get to a conclusion rather different from the misunderstanding that has been indicated above. As we know that Prophet Muhammad (P. B. U. H) was sent to a people who were totally ignorant, had never experienced any form of collective government and, therefore did not have laws and legislations. Further more, Prophet Muhammad (P. B. U. H)’s, messaged was meant for all times to come. Thus Prophet Muhammad (P. B. U. H) was sent to such a neighborhood where he could construct a model beginning from scratch and having no influence of any previous system whatsoever. Now it was Prophet Muhammad’s (P. B. U. H) job to introduce to them a system of laws and governance based on the divine guidance, and through them he was to demonstrate it to all people for all times to come. Laws were of course revealed and Muslims had and have to obey them as such. But when it comes to governance, we have ample examples to quote; Prophet Muhammad (P. B. U. H) mostly used the method of consultation. And this is what the message is that after the discontinuation of revelation, Muslims have to run their affairs in the light of revealed guidance by mutual consultation. To quote few examples from Prophet Muhammad’s (P. B. U. H) life, in order to support the notion that citizens of an Islamic state do have some rights to exercise sovereignty over themselves, we refer to the following instances from the Prophet Muhammad (P. B. U. H) life: 1. As mentioned previously, in the very beginning of political history of the state of Medina general public i. e. Muslims were made an equal part in the matters of the governance. Prophet Muhammad (P. B. U. H) did not make himself the sole representative of the whole Muslim community. 2. Prophet Muhammad (P. B. U. H) appointed twelve representatives (Naqeebs) among the Ansar to represent them. 3. Before the battle of Badr Prophet Muhammad (P. B. U. H) consulted Muhajreen as well as Ansar. 4. In the battlefield of Badr, the camping place of the army was selected on the advice of Habbad-bin-Munzir. 5. At the time of Uhad , Prophet Muhammad’s (P. B. U. H) own opinion was to fight within the city but the general opinion was to fight outside the city, and that was followed. 6. In the battle of Ahzaab, the strategy of digging a trench for the defense of Medina was again an idea presented by Salman. 7. The method of calling the faithful to the prayer was again a matter sort out by mutual consultation. Hence at end of this chapter we conclude that Prophet Muhammad’s (P. B. U. H) life adequately provides us the evidence that in an Islamic state the power to rule and govern lies with the citizens and not with a single person or family or some creed. Rather it is the right of the people to govern themselves as they please, but of course not violating the Quranic limits set upon them. Those to whom we give power, must establish the system of prayers and charity and they ask the people to do good and forbid from doing evil. † Islamic History and Muslim Scholars We have come out of an academic discussion. Now we shall be analyzing historical events and political realities. As we enter into a new phase of discussion. It will be very useful that we revise and redefine the question we are confronted with. So when we ask this that â€Å"are people sovereign in Islam? † What do we actually mean to imply? What are the other questions, which confront us when we say, â€Å"yes people are sovereign†? Having proved that sole source of power and strength is the Allah Almighty; do we mean to say, that Allah and His angels are physically involved in the governance of a state? Of course not, is the obvious answer. It is the men themselves who shall be arranging for any type of government. After placing theoretically all powers in Allah, when sovereignty is given to citizens it means following things. 1. Any government that is formed will be only due to the consensus of the majority of people. 2. Whenever there is some decision to be made, again it will be referred to people. Whatever a government or the rulers do is accountable to public. 4. As the government or state has functional powers, thus checks and balances on it to safeguard people against any sort of tyranny or exploitation. Now we shall examine different types of governments in Islamic history on the basis of these above points. To begin with, we first analyze first four guided caliphs. Abu Bakr (R. A) was made caliphs and presented him in front of public. His first address is very suitable example. It encompasses almost all the above four points. He said: â€Å"O people! I have been made caliph against my will.

Stonewall Riots of 1969

Introduction The stonewall riots of 1969 happened consecutively for 3 days, it all started on June 27th in Greenwich Village, New York at the Stonewall Inn. During the 1960’s it was common for the police to raid gay bars, and when this would happen the gays and lesbians would try to sneak out the back door. The police would arrest the patrons and drag them off to jail, their names were written down and published in the newspaper by the next day and as a result they would be fired from their jobs. â€Å"The 1960s was a time of revolution.The Civil Rights Movement was in full swing and people took to the streets to protest the war in Vietnam. It was only a matter of time before gays and lesbians stood up for their rights as well. †(A history of Gay and Lesbian Pride) June is now the month known as Gay Pride month, a time when all gays and lesbians prance and parade to celebrate. Setting/Background Living in the 1960’s as a gay and or lesbian was very difficult in f act the only way to be safe was to be â€Å"in the closet†, not openly gay to the public.Police took it up as their duty to arrest gay patrons who were seen kissing each other, dancing with one another, or even holding hands with one another. â€Å"Generally just being present was enough in their minds to warrant an arrest. Of course when this appeared in the newspaper they were tabbed as having committed a Crime against nature. †(The history and impact of the Stonewall Riots) Issues Involved/Causes During the 1950’s – 1990’s gay couples were not allowed to touch or dance with one another; it was also illegal for women to dress up in men’s clothing and men to dress in women’s clothing.If three known homosexuals were sitting at a table together then it would be illegal to serve an alcoholic beverage to them. â€Å"If the gay’s didn’t comply with the laws then they were faced with a fine, a night in jail, and the next mor ning they would have their names printed the daily newspapers and have a record under criminal activity†. (The history and impact of the Stonewall Riots) Event On June 27th police raided a gay bar in Greenwich, New York at the Stonewall Inn.Police demanded identification papers from costumers, they escorted them outside on to the sidewalks were they were pushed off and others were put into a paddy-wagon. That’s when some of the lesbians and gays started to fight back. They Chanted â€Å"Gay Power† all while throwing bottles and rocks at the police. â€Å"Riot veteran and gay rights activist Craig Rodwell says: â€Å"A number of incidents were happening simultaneously. There was no one thing that happened or one person, there was just†¦ a flash of group, of mass anger. (The stonewall riots-1969) Crowds soon began to grow outside the Stonewall Inn. Every time the police would have the crowd spilt up it would just start again right behind them and again they would start to chant. Thirteen arrest had been made on the first night of the riot many of the protesters were singled out and beaten and then later were arrested. With about two thousand protesters and only about four hundred police officers, the tactical patrol force was called in to disperse the riots but with a failed attempt the riot continued on.Outcome/Effects/Aftermath Effects of the Stonewall Riots were that the gay community in new York united in the fight against discrimination and June became known as a gay month to celebrate their pride in homosexuality. The gay liberation front was organized. Gay people learned to take a stand for themselves and to fight back. Reflection Though gay issues are still a problem today in America, the Stonewall Riots was the first step toward uniting the gay community to start taking a stand for what they believe is right.I believe that if it wasn’t for the Stonewall Riots then life for gays and lesbians would still be the same as it was then. It was the Stonewall Riot that led to gay liberations and for the gay community to start working together to make life easier for them. I don’t believe that the police should have gone as far as they did with raiding gay bars, but it was there ridings that led up to the Stonewall Riot so actually I’m glad that they did that otherwise the gay liberation front may have never been formed.

Free Essays on Effects Of Television On Children

What has happened to humankind today? Over and over again it seems like everywhere one looks, it’s presence known. It is observant in the streets, back alleys, school, even at home, last but not least television a major source of violence. Appearing in living rooms of homes across the world sits a channel for violence that often goes overlooked. It is the television, and the children who watch it that are pulled into its realistic world of violent scenes with sometimes shocking results. Much investigation has gone into showing why children are so fascinated by this big glowing box and the action that takes place within it. Studies show that television is certainly a major cause of violent behavior in children. The research proves time and time again that rage and television viewing work hand in hand. The truth concerning television violence and children has been revealed. A few are attempting to battle this setback. Others are closing their eyes to it, hoping it will go away. Still others do not even appear to worry. However, the details are undeniable. The studies have been carried out and the outcome leads to one conclusion: Television violence causes children to be violent and the end product can be life-long. The information cannot be unnoticed. Violent television viewing does affect children. The effects have been seen in a number of cases. In New York, a 16-year-old boy broke into a cellar; when the police caught him and asked him why he was wearing gloves he replied that he had learned to do so, so he would not leave fingerprints and that he discovered this on television. In Alabama, a nine-year-old boy received a bad report card from his teacher. He suggested sending the teacher poisoned candy as revenge as he had seen on television the night before. In Califo rnia, a seven-year-old boy sprinkled ground-up glass into the lamb stew the family was to eat for dinner; when asked why he did it he replied that ... Free Essays on Effects Of Television On Children Free Essays on Effects Of Television On Children What has happened to humankind today? Over and over again it seems like everywhere one looks, it’s presence known. It is observant in the streets, back alleys, school, even at home, last but not least television a major source of violence. Appearing in living rooms of homes across the world sits a channel for violence that often goes overlooked. It is the television, and the children who watch it that are pulled into its realistic world of violent scenes with sometimes shocking results. Much investigation has gone into showing why children are so fascinated by this big glowing box and the action that takes place within it. Studies show that television is certainly a major cause of violent behavior in children. The research proves time and time again that rage and television viewing work hand in hand. The truth concerning television violence and children has been revealed. A few are attempting to battle this setback. Others are closing their eyes to it, hoping it will go away. Still others do not even appear to worry. However, the details are undeniable. The studies have been carried out and the outcome leads to one conclusion: Television violence causes children to be violent and the end product can be life-long. The information cannot be unnoticed. Violent television viewing does affect children. The effects have been seen in a number of cases. In New York, a 16-year-old boy broke into a cellar; when the police caught him and asked him why he was wearing gloves he replied that he had learned to do so, so he would not leave fingerprints and that he discovered this on television. In Alabama, a nine-year-old boy received a bad report card from his teacher. He suggested sending the teacher poisoned candy as revenge as he had seen on television the night before. In Califo rnia, a seven-year-old boy sprinkled ground-up glass into the lamb stew the family was to eat for dinner; when asked why he did it he replied that ...

Malaysia Airlines Business Plan Essay Example

Malaysia Airlines Business Plan Essay Example Malaysia Airlines Business Plan Essay Malaysia Airlines Business Plan Essay Business Plan Our Way Forward December 2011 Confidential 5 December 2011 Malaysia Airlines is in crisis. Our combined losses in the first three quarters of 2011 have already exceeded RM1. 2 billion, and the final numbers for the year will not improve upon this. The core passenger airline business is chronically challenged. The new Board and Management team, in place for three months, has been hard at work on a plan, referred to as the Business Plan, for Malaysia Airlines. This Business Plan outlines our near-term recovery plan to move us to profitability by 2013, as well as a set of ‘game changers’ to sustain our performance and create a platform for continued growth for Malaysia Airlines’ future. Executing this plan is key to our recovery. It will require complete focus and commitment to make hard and difficult decisions in the next 24 months and the strongest determination to see these initiatives succeed. To the Malaysia Airlines Team, all our stakeholders and customers, I ask for your unwavering support, patience and continued patronage in this time of challenge and opportunity. Ahmad Jauhari Yahya Group Chief Executive Officer Confidential Page 2 Page 2 Executive Summary Current Situation Our Recovery Plan Game Changers: Sustaining Our Performance Foundations Our Commitment 4 13 21 31 38 42 DISCLAIMER This Business Plan document is issued to Malaysia Airlines staff and external stakeholders with the purpose of disclosing a balanced and objective management view of the current situation, as well as the plan for recovery and our future growth. In the spirit of transparent management practice, we share some financial information as part of the discussion. For all intents and purposes, the financial information and figures pertaining to the future should not be construed as forecasts, projections or estimates of future profitability or representations of the company’s future performance. These figures are merely a set of aspirational targets which are aligned to the Company’s strategy as outlined in this Business Plan. This document and its contents have been approved by Malaysia Airlines’ Board of Directors, but are not to be considered as estimates, forecasts nor projections reviewed by external auditors. Page 3 Executive Summary Page 4 CURRENT SITUATION Malaysia Airlines is in crisis. We have incurred a net loss of RM1. 2 billion in the first three quarters of 2011 alone. More than 40 percent of our routes are loss-making and our unit cost position is 10 – 15 percent above corresponding revenues. In fact, we are in a much more tenuous position than we were in 2006 when we were in a similar crisis. The aviation market has become even more competitive with the rapid increase of the low cost carrier (LCC) segment, continued growth of the Middle Eastern full service carriers and revival in the fortunes of Asian full service carriers such as Garuda, Japan Airlines (JAL) and Thai Airways. Meanwhile, Malaysia Airlines has not focused adequately on the premium segment of the market, and our product quality has fallen. Our marketing efforts have been predominantly focused on tactical sales promotions rather than brand-building. With such adverse odds, our intensifying sales efforts could only generate low yields insufficient to cover an increasingly uncompetitive cost structure. Thankfully, we are still flying high in service standards, due to the valiant efforts of our superb Malaysia Airlines team. Yet the demand outlook for Asian aviation is strong. Across Asia, there is huge growth in disposable income, ramped-up access to credit cards and the Internet, and increased cross-border trade. Southeast Asia, in particular, with its combined population of over 500 million, myriad islands and underdeveloped road and rail infrastructure, is well-placed for aviation growth. Indeed, we expect ASEAN passenger demand to double by 2020. This is rightfully an exciting market for all participants in the aviation industry. This strong demand outlook is however clouded by both possible near-term shocks and certain longterm trends. Irrational exuberance in aircraft orders by Asian airlines is engendering a situation of capacity over-supply and excessive price competition. We expect the current Southeast Asian regional fleet to triple in the next decade. Increasing liberalisation also makes it easier for airlines to compete outside of their home markets. In the US and Europe, this combination of overcapacity and liberalisation has invariably yielded market consolidation, with only the strongest airlines surviving in their original form. Page 5 To make an already bad situation worse, there is the near-term possibility of a global recession emanating from Europe, and stubbornly high jet fuel prices conspiring to create the perfect storm of immediate turbulence. Without question, our current trajectory is unsustainable and nothing short of dramatic action will reverse our fortunes. Our weekly cash losses are in the millions of Ringgit. If we maintain our current business model, we will be out of cash by the middle of the second quarter of 2012. We will be bankrupt. Beyond the loss of 20,000 jobs, this would mean an indefinite end to connectivity with the many global hubs to which we are connected today. It is unthinkable and yet it is entirely possible. With new, expensive aircraft entering our fleet next year, our financing costs will increase markedly. While these new aircraft are larger and generally enable us to fly at a lower per-passenger cost, we must fill these aircraft to realise the savings. Indeed, if we do not fundamentally reengineer our commercial function, our losses in 2012 could easily top RM2 billion. To pay for our new aircraft and to cover our certain near-term losses, we must show investors that we are serious about changing our game. We have no other alternative. This is the greatest challenge we have ever faced as a business; a fundamental and radical overhaul is required to put us back on the path to sustained profitability. Here is our flight plan. Our vision is to become the preferred premium carrier, well-positioned for the coming consolidation of the Asian aviation marketplace. While Malaysia may be relatively small in the Asian arena, we will harness the country’s geo-economic centricity in ASEAN, emphasise our natural cost-competitiveness as a hub and utilise alliances and partnerships to significantly ‘punch above our weight’. Using a combination of tie-ups, we will achieve ‘virtual scale’, expand our network, coordinate our commercial functions and synchronise operations with similarly-minded airline partners. We will also exploit Malaysia’s competitive cost position to lower our costs. This will create the broadest array of network options for our customers and deliver an industry-leading cost position. We will follow a two-step approach in achieving this vision. In the near term, we are relentlessly focused on five initiatives to achieve a recovery to profitability for the 2013 financial year. We will then focus on a set of ‘game changers’ that will help us build a robust and sustainable business for the future. Page 6 OUR RECOVERY PLAN Enabling our ambition of becoming the preferred premium carrier must begin with a fundamental remodel of our core business. There is nothing revolutionary about this; it is the sheer simplicity of focus, and going back to basics. We will follow the playbook used by other airlines in their successful turnarounds but adapt it effectively to our unique context. The hard truth is, there will be some difficult decisions to be made to achieve a successful recovery. We will make these decisions in the best interests of our employees, shareholders, customers, business partners and Malaysians at large, and we count on the support of all stakeholders in this process. 1. Smaller yet profitable network. Going forward, our network shall include routes where our premium travellers will want to go, and where we can win in terms of competitive position and home advantage. We are shrinking to grow, and as we get back on firm financial footing, we shall expand our network to cover the world’s major economic regions and hubs. 2. Win back customers. We will take delivery of 23 aircraft in 2012, each with state-of-the-art passenger amenities. As we introduce these products, we must also reinvigorate our sales and marketing functions. We must win back the hard-earned loyalty of customers, especially those in Malaysia, and convince them of the superior value of our enhanced services. We also need to optimise our revenue management to enhance yields. 3. Relentless cost focus. As we take on new aircraft, we must quickly realise the savings from their improved efficiency. Lower fuel bills and maintenance expense reductions must be locked in early. We must also focus on keeping overhead and discretionary expenditure to a minimum. Finally, we will achieve savings in procurement through the collaboration with AirAsia and AirAsia X, subject to full compliance with global anti-trust legislation. 4. Keep it simple. We have become a very complex business with a number of different operating entities – core full service airline, MASholidays, MASkargo, MAS Aerospace Engineering (engineering and maintenance), training, catering, and ground handling. We need to de-clutter to ensure proper focus on our core business: flying our customers. We also need to give the ancillary businesses sufficient freedom to achieve their full potential. We therefore intend to commence the process of spinning-off our ancillary businesses starting with ground handling, training and engineering maintenance. Page 7 . Bridge the funding gap. Given the aircraft deliveries we are receiving in 2012, we acknowledge the funding gap that must be bridged. This bridge has five pillars of support: a. Achieve positive quarterly operating cash flow by the end of 2012. We shall ‘shrink to grow’ and consequently make resultant hard decisions to materialise reductions in costs and cash outflow b. Capital expenditure funding for our new planes through debt financing and leasing arrangements c. Working capital boost via the return of pre-delivery deposit payment (PDP) upon delivery of our new aircraft d. Proceeds from the potential spin-offs of our ancillary businesses e. Unwavering support from our major shareholders, whose support keeps our balance sheet robust despite a relatively high gearing Strong shareholder support is understandably conditional on Management undertaking all necessary measures including difficult and unpopular decisions to assure a positive operating cash flow performance. We shall indeed commit to do everything in our power to redeem the faith and support of our major shareholders. Page 8 GAME CHANGERS: SUSTAINING OUR PERFORMANCE Beyond the recovery, we will pursue a series of ‘game changers’ that will fundamentally overhaul our business model and sustain our performance. These strategic initiatives are sheer necessities to maintain relevance in a dynamic and ever-changing airline landscape. 1. Launch of a new regional premium airline. In the first half of 2012, we will launch our new shorthaul brand, flying an entirely new Boeing 737-800 fleet. Given a clean slate, a new business model can be designed from inception for sustainable commercial success without any inertial drag of legacy airline models. The relatively smaller size of the Boeing 737 means the airline can fly to more places where our customers want to travel, at times convenient to their schedules. We also intend to create a separate management structure to focus on the unique customer needs of regional premium travellers. This new airline shall set new standards for product and service quality, cost efficiency, and operational excellence. It will therefore set the template for airline success. 2. Alliances and partnerships. By the third quarter of 2012, we will be the newest member of the oneworld alliance. We are excited to join this extensive global network and look forward to increasing traffic via our combined networks and infrastructure. To augment our alliance membership, we intend to enter into material partnerships with major airlines to link our respective geographic strengths into a unified international presence. This will bring obvious mutual benefits to the parties involved as jointly, the whole will be in a much stronger competitive position than the sum of the parts. 3. Collaboration with AirAsia. On 9 August, we signed a Collaboration Agreement with AirAsia and AirAsia X. The Agreement provides all three airlines with a step-change improvement in operations through best practice sharing in select areas (such as fuel efficiency) and lower procurement costs (such as in fleet, ground handling and engineering maintenance services). Collaboration will also allow our customers to travel between more destinations than previously with an introduction of connecting services across the respective airlines’ networks. Without question, the collaboration is an essential element of Malaysia Airlines’ overall recovery and will further enable our sustainability going forward. Page 9 We recognise the vision and sacrifice of our principle shareholder, Khazanah, in making this collaboration possible. Importantly, the collaboration exercise is and will be done in full compliance with global antitrust and other regulatory requirements. 4. Ancillary business spin-off. With the successful spin-off of non-core businesses in our recovery plan, we can better focus on the core airline business and ensure a long-term competitive cost position for supporting services such as engineering maintenance, ground handling and training. In addition, we can ensure the full development of these ancillary businesses by attracting thirdparty specialists as strategic partners. Malaysia’s competitive cost position means we can build regionally competitive ancillary businesses with Malaysia as a hub. FOUNDATIONS To execute on our Recovery plan and achieve a sustainable performance, we will need to further develop three foundational elements. 1. Branded customer experience. Our customers are our top priority. In addition to the gradual rollout of our new product, we will improve customer satisfaction at every touch point – pre-flight, inflight and post-flight. Malaysia Airlines will deliver on its brand promise consistently, across all touch points, channels, national borders and at all times. In the months ahead, we will be making investments in a number of tools and processes, as well as mobilising the organisation across functions and layers to align and execute on the Malaysia Airlines brand promise. 2. Continuous operational improvement. In line with our vision to be the preferred premium carrier in the region, we will be making substantial changes to our operations to excel on three key dimensions: commercial effectiveness, flight operations and cost management. In terms of commercial effectiveness, we intend to seek continuous improvement in areas such as revenue management, direct sales and in the use of social networks for marketing. As we take delivery of our new fleet, we aim to set the new benchmark for excellence – for both aircraft and airport operations. Finally, while Malaysia Airlines has always had the potential to be the lowest cost player in the full service segment, we lag labour productivity benchmarks and are not best-in-class in areas such as procurement. We intend to bridge the gap with our peers in the region through continuous improvement programmes. Page 10 3. Winning organisation. Malaysia Airlines’ loyal and dedicated staff are a huge asset. However, we have to make a fundamental shift to a more performance-based culture. We wish to work collaboratively with our union and association partners to create a pay-for-performance compensation approach and culture. We have started to simplify our organisation structure to accelerate decision-making and create more accountability. We shall assemble the right people for the senior leadership of Malaysia Airlines and we shall not shy away from taking key decisions to effect this. And given the necessity ‘to shrink to grow’, we will have no choice but to right-size the organisation for the greater good of Malaysia Airlines’ survival. A leaner and meaner organisation will quickly become an agile, competitive and winning organisation. These actions will ultimately be the turning point on whether we can achieve and sustain acceptable financial performance. We expect to achieve a significantly reduced loss for 2012. Our ‘base case’ target for 2012 performance is a Group loss of approximately RM165 million. With an accelerated recovery, our ‘stretch target’ is for the Group to achieve a modest profit of up to RM238 million in 2012. We plan to sustain increasing levels of profitability and aspire to generate a profit after tax of over RM900 million by 2016. Page 11 OUR COMMITMENT A commercially sustainable flag carrier airline is vital to the broader eo-political and macroeconomic national objectives of global connectivity and trade linkages for Malaysia. However, our very existence is at stake given the internal and external factors combining to create the perfect storm. We must first take hard and potentially unpopular decisions – simply to survive, in order to then have the possibility to thrive. We therefore take a pledge of full commitment to undertake all necessary measures as outlined in this Busine ss Plan to first and foremost secure our survival, and ultimately to achieve our vision of being the preferred premium carrier. This radical flight plan will allow us to fly more satisfied customers to more places, build rewarding careers for our employees, and build a global brand that will make all Malaysians proud. We ask for your unwavering support, patience and continued patronage in this time of challenge and opportunity. The Preferred Premium Carrier 1 2 3 4 5 Smaller yet profitable network Win back customers Relentless cost focus Keep it simple Bridge the funding gap A Launch of new regional premium airline 1 Alliance and partnerships 2 Collaboration with AirAsia 3 Ancillary business spin-off 4 Branded customer experience B Continuous operational improvement C Winning organisation Page 12 Current Situation Page 13 Figure 1: Forecast demand growth Available Seat Kilometres (ASK) billions 1,068 ASEAN to/from mature markets 542 ASEAN to/from rest of Asia 2010 Source: OAG MARKET OUTLOOK The demand outlook for the Asian aviation sector is strong, fuelled by a burgeoning middle class and increased global and intra-regional trade. Long-term trends Based on forecasts of GDP growth, trade flows and other factors, we anticipate a doubling of demand over the coming decade (Figure 1). This presents a 2020 sizeable opportunity to all airlines in the region, and we are not alone in making sizeable aircraft Existing aircraft New narrowbody aircraft New widebody aircraft Figure 2: Planned capacity Aircraft ‘low cost’ 449 422 347 277 orders to fill the demand. By our count (Figure 2), 1,000 new narrow-body jet aircraft have been contracted for delivery over the next decade, an effective tripling of the commercial aviation fleet, likely outpacing the speed of demand growth. ‘full service’ ‘low cost’ 220 176 89 59 189 155 174 At the same time, aviation markets in the region are being liberalised, with most ASEAN countries 71 te Ca Gu s lf th ay A i r Pa ci fic Li o Ai n rA si In a di G Je o ts ta r Ti ge r C eb u M AS Et ih ad Em ira SI A targeting completely ‘open skies’ by 2015. This will allow carriers from any country to serve passengers in more overseas markets. Source: Press reports In other regions, this combination of overcapacity and deregulation has led to dramatic consolidation. In the US and Europe, the top three airlines account for 40 – 60 percent of the market. In Asia, they account for only 20 percent. Consolidation will inevitably come to Asia as well. Success in such challenging environments depends on the creation of a differentiated approach. This can be earned through building a leading cost position or by creating a unique value proposition to customers. We will do both. To thrive in this increasingly challenging market, we have to relentlessly pursue our vision of becoming the preferred premium carrier, well-positioned for the coming consolidation of the Asian aviation marketplace. We need to fundamentally remodel our core business and to put in place ‘game Page 14 hangers’ that will keep us ahead. Success of these efforts rests on the foundation of three elements: branded customer experience, a culture of continuous operational improvement and a winning organisation. We will fail if we do not deliver on all components of our flight plan. Perhaps more so than in other markets, we are also witnessing a rapid segmentation of the market, with carriers differentiati ng themselves along two dimensions: ‘low cost’ versus ‘full service,’ and ‘short haul’ versus ‘long haul. ’ Increasingly, airline owners are looking to place their chips in multiple segments (Figure 3). More than clarifying product tradeoffs to customers, this segmentation drives dramatic focus and simplification in airlines. The low cost carrier model (LCC) in particular has become immensely successful for those who can secure the absolute lowest unit cost in their relevant market. For those who cannot achieve rock-bottom costs, the challenge is to compete on service levels to customers more inclined to the ‘full service’ experience. Demand for ‘in between’ service levels (competing both on price and service) is disappearing, as customers largely target one particular product type. Recognising this, Malaysia Airlines is charting our future strongly in the full service, long-haul segment, with plans for extended participation in the full service, short-haul segment as well. Figure 3: Business model segmentation Short-haul Full-service Long-haul Low cost/value CCF* ASIA AUSTRALIA/INT’L Note: *CCF: Comprehensive Collaboration Framework between Malaysia Airlines, AirAsia and AirAsia X as announced on 9 August 2011 Page 15 Short-term shocks More so than other industries, airlines are vulnerable to macroeconomic events which create ‘demand shocks. In 2011 alone, there were two such shocks with the devastating earthquake/ tsunami in Japan and the floods in Thailand. Airlines must build business models able to withstand such external shocks. Figure 4: Profit/loss of Firefly business RM Turbopropbased business Jet-based business In 2012 , we must be prepared for the possibility of a global recession, brought on by Europe’s sovereign debt crisis, and a continued high cost of jet fuel. 2010 Source: Malaysia Airlines 2011 Figure 5: Skytrax annual ratings Ranking 1 2009 2010 2011 OUR RECENT PAST Over the past decade, Malaysia Airlines has lost its focus on the ‘full service’ portion of the market, which has historically been our bread-and-butter. 2 3 4 5 6 We launched our Firefly ‘low cost’ subsidiary in 2007. While the turboprop aircraft portion of the business has done well, the jet business launched last year has not yielded the returns we anticipated (Figure 4). 7 8 9 10 Source: Skytrax In an effort to fill aircraft, we priced seats well below our breakeven cost target. Though our cost situation would have improved with increased scale, it would have been insufficient for sustained profitability. We have since closed the Firefly jet business whilst focusing on growth of the profitable turboprop business for 2012 and beyond. With resources diverted to the ‘low cost’ segment of the market, we under-invested in the customer experience that is key for success in the ‘full service’ business. We are left with one of the oldest fleets in the region, which contributed to our removal from the Skytrax ‘top ten’ list of carriers. (Figure 5) Page 16 As product quality has fallen, we have lost the Figure 6: Unit revenues 2011 year-to date, Sen per ASK hard-earned loyalty of many Malaysia-based fliers. Last year, we lost more than 40 percent of KL-based passengers flying a ‘full service’ competitor airline to a city served by Malaysia Airlines. Our network, too, remains focused on the flows of a previous era, with a significant portion of our capacity concentrated on serving the highlySource: Company reports competed ‘kangaroo route’ connecting Australia to Europe. The declines in relative product quality and customer loyalty, combined with this overFigure 7: Unit costs 2011 year-to date, Sen per ASK 28. 5 25. 6 25. 0 29. 5 30. 5 representation of capacity on highly-competed routes have weakened our yields. Our unit revenue levels are now 15 25 percent below regional peers (Figure 6). 10. 4 11. 8 Our cost position is also not sufficiently lower than our competitors (Figure 7). As a result, our unit revenues have remained stubbornly below our unit costs. Source: Company reports Part of our poor cost position is due to the age of our aircraft. Just as the ageing fleet has driven down our pricing power, so too has it increased our costs. For every flight flown, we pay 15 20 percent more for fuel than does a competitor airline flying a more modern aircraft. Page 17 Unfortunately, the larger issue on the cost side is inadequate labour productivity (Figure 8). In Figure 8: Labour productivity 2010, No. of airline employees per aircraft seat the months ahead, there will be a need to overhaul our organisational structure. 0. 77 OUR STRENGTHS 0. 50 0. 43 Notwithstanding our internal challenges, there remains several assets in our arsenal. This includes strong technical capabilities and our well-trained cabin crew who continue to win awards (Figure 9) and is the hallmark of our Source: Company reports Malaysian hospitality. The crew’s dedication is to be credited for the strong brand equity we continue to enjoy. Both at home and overseas, the Malaysia Airlines Figure 9: Skytrax cabin crew ratings brand remains associated with our unique heritage and high-quality service. Rank 2008 2009 2010 2011 1 This positive predisposition to the Malaysia Airlines brand will receive a boost from our 2 new fleet additions and upgrades. Twentythree state-of-the-art aircraft will be delivered over the next 12 months, each with the latest 3 Source: Skytrax passenger amenities. Only through the foresight of previous management would we be in so fortunate a position to replenish more than half of our fleet of aircraft in a three-year period. These improvements will help reduce our fuel and repair bills, as well as convince our once loyal customers to return to our fold. Page 18 Signed in August 2011, our Collaboration Agreement with AirAsia and AirAsia X is a critical achievement. We are in discussions to coordinate our ground services, training and engineering maintenance functions, as well as to launch a joint procurement venture that will allow us to realise the combined benefits of scaled purchases. We estimate the cost savings to Malaysia Airlines alone will be more than RM100 million per year. 5,991 5,251 Figure 10: Malaysian competitive cost position 2011, Monthly wages, RM 11,856 In addition, we are close to finalising a connecting service that will enable passengers on either airline to seamlessly connect between carriers on nonoverlapping routes. Source: JETRO, Euromonitor Sydney Hong Kong 1,228 940 Beijing 846 Bangkok 588 Jakarta Singapore Kuala Lumpur Of course, any discussion and implementation of initiatives will be subject to full compliance with global anti-trust and other regulatory requirements. Our full entry into oneworld in the third quarter of 2012 will considerably enhance our network while providing baseload demand from our fellow oneworld members. In the months ahead, we will announce a series of additional partnerships that will drive increased commercial scale. These partnerships will be critical for us in the years ahead. Finally, our home remains Malaysia and that is our most defendable asset of all. Going forward, we must continue to realise all natural cost advantages (Figure 10) available to us to ensure we can profitably offer the best value in the sky. Page 19 STATUS QUO IS NOT AN OPTION A bold revision of our Group is necessary to avoid the failure of Malaysia Airlines as we know it. Weekly cash losses are in the millions of Ringgit. Without radical efforts now, we anticipate bankruptcy in the middle of the second quarter of 2012. Indeed, without action, our losses in 2012 could easily top RM2 billion. Preventing such an outcome requires a variety of efforts, but at the core must be a reversal of this loss-making. Securing funding for future operations requires evidence to new investors – be they through debt or equity – that a dramatic change in fortunes is possible in the very near term. The challenge is immense but, we believe, recovery is within our grasp. Firm and decisive actions will have to be taken now. Page 20 Our Recovery Plan Page 21 In approaching our recovery, we are focusing first and foremost on our primary, core business: the passenger airline. True sustainability means our passenger aircraft will be able to fly profitably whatever the broader economic and market conditions. To be clear, there are exciting opportunities for our ancillary businesses – engineering and maintenance, cargo, and training, to name a few – but success of the core business must be the cornerstone of the Group’s broader performance. There are five steps to our recovery. The first is to aggressively reduce capacity on routes that have generated losses over many years. As Figure 11 (page 23) shows, over 40 percent of our routes today lose money. Second is the effort to fill aircraft on our remaining network with loyal, satisfied customers. Next, we must relentlessly cut costs in all areas where it does not reduce the customer experience or our commitment to safety. Simplifying the business by spinning-off ancillary units is the fourth step. Fifth is to fund this recovery. This is by no means a small feat. Smaller yet profitable network 2 Win back customers We will suspend services on routes where we are substantially loss making. This will account for approximately 12% of our ASKs. It is our desire to return to the markets that we are exiting in the near future after we have stabilised our business. We will take delivery of 23 aircraft in 2012, each with state-of-the-art passenger amenities. As we introduce these products, we must also reinvigorate our sales and marketing functions. We must win back the hard-earned loyalty of customers, especially those in Malaysia. We also need to optimize yield through better revenue management and tactical sales programmes. 2012 profit impact: ~RM220 302 mil. 3 2012 profit impact: ~RM394 477 mil. 4 Relentless cost focus Keep it simple In a brutally competitive industry, we need to maintain focus on continually managing our costs down and achieving operational excellence. As we take on new aircraft, we must quickly realise the savings from their improved efficiency. Lower fuel bills and maintenance expense reductions must be locked in. Our overall business structure has become too complex with a number of ancillary activities becoming very large and complex. We therefore intend to ‘spin-off’ some ancillary businesses to ensure greater focus on the core airline business and give these ancillary businesses more freedom to grow and achieve their full potential. 2012 profit impact: ~RM309 392 mil. 2012 profit impact: ~RM255 337 mil. 1. Positive operating cash flow 2. New debt and leasing arrangements 3. Working capital boost via the return of pre-delivery payment deposits 4. Proceeds from potential spin-offs 5. Unwavering support of our shareholders 5 Bridge the funding gap Given the aircraft deliveries of 2012, we acknowledge the funding gap that must be bridged. This bridge has five pillars of support: Page 22 Figure 11: Profit before tax by route 2010, RM profitmaking lossmaking More than 40% of routes are loss-making 100 routes in network Source: Malaysia Airlines 1 SMALLER YET PROFITABLE NETWORK Our network is the heart of the Company and, while we want to serve our customers as well as we can, we recognise that we cannot generate profits on all the routes we are currently flying. Hence, we will, based on Malaysia Airlines’ own independent internal profitability and yield analysis, suspend services from select loss-making routes and will further focus on the core ASEAN region where we are the strongest. We plan to suspend Cape Town, Johannesburg, Buenos Aires, and other loss-making routes. On the other hand, we will increase our frequencies to key regional cities to benefit from the strong growth in regional demand. Successful turnarounds from other airlines, such as JAL (Figure 12) or Garuda, have been based on aggressive network cuts. We believe that, while we are cutting Available Seat Kilometres (ASK) by close to approximately 12 percent next year, we will be able to grow again profitably in the years ahead. Figure 12: Case example: Japan Airlines Capacity (ASK billions) and Net Income (RM millions) pre/post turnaround Profit impact: RM220 302 million Page 23 2 WIN BACK CUSTOMERS In 2012, we will take delivery of 23 new aircraft and phase out the A330-200 and B747-400 fleets. We will continue that effort over the next few years and, by 2015, we will have the youngest fleet in the region Figure 13: Aircraft age Years AirAsia Cathay Pacific Singapore Airlines Malaysia Airlines 13 12 10 9 10 (Figure 13). Our new aircraft will be equipped with best-in-class hardware and we will make significant investments next year to upgrade our meal services on all sectors (Figure 14). 2008 5 3 7 5 5 7 8 2011 2015 Building on our new fleet, we are revamping our approach to branding, distribution and customer loyalty. We are overhauling our commercial approach and revenue management systems to earn our fair share of corporate travel, drive front-end cabin revenue and fully leverage our oneworld membership to generate traffic (Figure 15). Source: Company reports Figure 14: Incoming fleet Figure 15: Sales marketing key business activities planned for 2012 Regional 1 Centralised New product roll-out Increase Frequent Individual Traveller (FIT) mix Connectivity improvement Direct channel push 11 Enrich (loyalty) Malaysia Airlines Corporate Travel (MCT) Programme enhancement Small Medium Enterprise (SME) push Business leisure campaign oneworld alignment 6 7 8 9 programme enhancement 12 Revenue management 13 Route suspension 2 3 4 10 Seasonality management impact 14 Malaysia Airlines 5 Enhanced Advertising Promotion deployment branding revamp Profit impact: RM394 477 million Page 24 Figure 16: Fuel efficiency savings Percent savings per ASK travelled 3 RELENTLESS COST FOCUS In a brutally competitive industry, we need to maintain focus on continually managing our costs down. In the short term, we will realise significant cost savings from our updated fleet deployment, with our state-of-the-art aircraft consuming less fuel. For example, as Figure 16 shows, flying the B737-800 Source: Aircraft manufacturers instead of the B737-400 will save us close to 23 percent of our fuel bill on a typical flight between Figure 17: Maintenance expense savings 2010, Expense per aircraft block hour, RM (Industry benchmark) Kuala Lumpur and Bangkok. In addition, our maintenance costs will decrease as we operate a newer fleet with lower maintenance requirements (Figure 17). However, benefits from our new aircraft deployment will not be sufficient. We have undertaken a comprehensive cost review that has identified RM200 million in 2012 savings Source: Form 41 opportunities (Figure 18). Improvements will come from increased utilisation of assets, early return of Figure 18: Key cost initiatives planned for 2012 Target run rate savings, RM millions 1 Productivity enhancement 70 80 2 3 ircraft and improved cost control over key functions. Strategic procurement of fuel Fuel efficiency from CCF bestpractice sharing Additional procurement initiatives Maintenance cost cap increase Early return of Boeing 747 15 20 30 35 30 35 10 15 25 30 We will realise further savings from the closure of stations in markets where we are suspending services. 4 5 6 Source: Team analysis Profit impact: RM 309 392 million Page 25 Additional infrastructure savings will be achieved once existing operation bases are consolidated to fewer locations. We will further focus on a review of our procurement contracts to achieve critical rate decreases. Finally, we are expecting cost savings through joint procurement and sharing services such as training and ground handling with AirAsia, subject to compliance with global anti-trust legislation. Looking forward, we will conduct a broader efficiency review that will aim at improving our organisation effectiveness and bring our productivity level closer to that of our regional peers. 4 KEEP IT SIMPLE Our overall business structure has become too complex with a number of ancillary activities becoming very large. We need to de-clutter the business to ensure greater focus on the core airline. We therefore intend to ‘spin-off’ some ancillary businesses to give these units more freedom to grow and to achieve their full potential. We intend to start with joint ventures in training and ground handling with AirAsia that will result in capex avoidance and lower costs through enhanced asset utilisation, scale and sharing of best practices. We believe these businesses have the potential to attract more third-party customers and grow into attractive stand-alone companies. The new companies may also consider tie-ups with strategic partners to enhance capabilities, expand geographic reach and access new customers. We also intend to spin-off MAS Aerospace Engineering (MAE) with an intention to create a strong standalone engineering maintenance services provider. We believe these spin-offs will also enhance Malaysia’s competitiveness as a regional aviation hub. Spin-offs will commence in the near-term but the completion of this process will be influenced by the availability of strategic partners and the state of the capital markets. Profit impact: RM 255 337 million Page 26 Short term: Arrest chronic losss include: Drive front-end cabin revenues Ramp-up corporate revenues Implement dynamic and integrated sales marketing programmes Grow direct channels Improvement potential (RM mil. ) 220 302 Win back customers Commercial excellence 394 477 Relentless cost focus Operational excellence Close stations according to own network rationalization Continuous improvement, examples include: Conduct thorough review of procurement costs Implement productivity improvement programme Improvements in on-time performance, aircraft turnaround times and asset utilisation Reduce structural fixed costs; operations consolidation Spin-off training , ground-handling and other ancillary businesses, some with AirAsia, to generate additional third party business Spin off MAE Total 2012 potential profit impact 09 392 Keep it simple 255 337 1,178 1,508 Page 27 SUMMARY Our ‘base case’ target is for the core business (passenger airline without cargo, catering and other ancillary businesses) to generate a significantly reduced loss of approximately RM340 million in 2012. As Figure 19 illustrates, we are targeting further improvement still with a ‘stretch target’ whe re the core business would breakeven in 2012. With estimated core airline losses of approximately RM1. 32 billion in 2011, this represents a one-year recovery of between RM 1,178 – 1,508 million. This is ambitious, but we believe it is achievable. Figure 19: Impact of initiatives to core airline profit 2012, RM millions 255-337 309-392 394-477 (200)-(190) (340)-0 (340) 220-302 (1,318) One-year turnaround worth RM 1,178 – 1,508 million 1 2011 Core airline losses (analysts estimates)* Smaller yet profitable network 2 Win back customers; commercial excellence 3 Relentless cost focus; operations excellence 4 Keep it simple Finance charges 2012 Target Note: All scenarios presume US$130 jet fuel and do not include any potential restructuring costs. Interpolated to arrive at core airline losses from analysts’ estimates of Group performance; figure is purely for illustrative purposes and does not represent MAS’ view of FY2011 losses Source: Team analysis, analyst reports We will begin suspending unprofitable routes early in 2012, which will first limit our losses. Our aggressive fleet plan, with the entry in service of the A380 aircraft on our flagship London rou te, coupled with best-in-class product and key innovations in customer service will drive our yield and load improvements. We also expect significant cost savings from the deployment of this new fleet, both from maintenance and fuel consumption. While those improvements have a cost, we have managed to keep constant some of our key procurement costs. We will also leverage our new fleet to improve the utilisation of our superb crew while still delivering top-notch service and safety. Finally, we will decrease our other fixed costs through a comprehensive review of both external and internal drivers. Page 28 Figure 20: Sources of Group profit 2012, RM millions 978 1,318 (165) (165)-238 102-165 (1,245) 011 Group losses (analysts estimates)* Improvement in subsidiaries profits in 2012 Core airline improvement in 2012 2012 Group target Note: All scenarios presume US$130 jet fuel and do not include any potential restructuring costs *Excludes gains/losses from forex exposure and hedging instruments Source: Team analysis, analyst reports For the Group (core airline plus all ancillary businesses), our ‘base case’ target for 2012 performance is a loss of approximately RM165 million. With an accelerated recovery, our ‘stretch target’ is for the group to achieve a modest profit of up to RM238 million. This is shown in Figure 20. Figures 21 and 22 (page 30) depict the reversal of our targeted cash position. As the ‘business as usual’ scenario makes clear, our current trajectory would almost certainly leave us in bankruptcy. With the Recovery plan, however, we plan to end the year having generated RM 313 – 744 million in cash. Once this recovery is accomplished, we will make aggressive decisions to change the battleground and become a major player in the upcoming consolidation as the preferred premium carrier. Page 29 Figure 21: Operating cash generation 2012, RM millions Figure 22: Cash balance 2012, RM millions Source: Team analysis Source: Team analysis As noted earlier, 2012 will be a key transition year on our path to becoming the preferred premium carrier. While we are beginning our turnaround process, the investments required to update our fleet and generate additional revenues will be massive. We are confident that we have secured a funding plan that will enable us to achieve this vision. This plan rests on 5 pillars: 1. Achieving positive operating cash flow on a quarterly basis by the end of 2012 2. Successful debt financing and leasing arrangements for our new aircraft 3. Working capital boosts from the return of pre-delivery payment deposits upon delivery of our new aircraft 4. Proceeds from the potential spin-offs of our ancillary businesses 5. Unwavering support from our major shareholders, whose support keeps our balance sheet robust despite a relatively high gearing Page 30 Game Changers: Sustaining Our Performance Page 31 OUR VISION While much about the years ahead remains uncertain, the forces of overcapacity, market liberalisation and industry consolidation are certainties. In markets where the consolidation has played out, only the strongest airlines survive in their original form (Figure 23) and maintain profitability. In the US, for example, where liberation began over 20 years ago, a series of mergers has produced a market where the top three players control 60 percent of the market, and only the largest two (Delta and United) appear to have developed a sustainable business. Similar events have played out more recently in Europe and Latin America, with small airlines losing market share and generating significantly lower financial returns – if they are profitable at all. This same scenario will play out in Asia in the coming years. Figure 23: Capacity share of leading airlines in deregulated markets 2009, share of market based on RPKs Other Other Other Gol American Airlines/TWA United/ Continental British Airways/Iberia Lufthansa Group Delta/ Northwest TAM Air France/ KLM LAN AirAsia Other Malaysia Airlines Singapore Airlines Cathay Pacific China Southern Top 3 Top 3 Top 3 Top 3 N. America (liberalised in 1980s) Source: OAG Aviation Europe (liberalised in 1990s) L. America (liberalised in 2000s) Asia (liberalisation beginning) Our vision is to shape the future of the industry and be a leader in the consolidation in Asia by becoming the preferred premium carrier. We must achieve capacity leadership amongst ‘full service’ carriers where we can and partner elsewhere to realise the true commercial scale of our business. Page 32 Figure 24: Capacity share of ASEAN-connected markets 2010, Capacity share based on ASKs MAS-Wings Other Other Other Other MAS Other Other Turkish Airlines Singapore Airlines Garuda Indonesia Other Jetstar AirAsia MAS Emirates Thai Airways Qantas MAS Tiger China Southern Garuda Philippine Airlines Vietnam Airlines British Airways Lufthansa KLM-Royal Dutch Airlines Cebu Jetstar Silk Air MAS Thai Airways AirAsia Singapore Airlines Eva Airways Air China China Eastern Vietnam Airlines Air India Jet Airways MAS AirAsia Thai Airways Singapore Airlines ASEAN to/from S. Asia MAS Thai Airways China Airlines Singapore Airlines Asiana Thai Airways Japan Airlines Gulf Air Saudi Arabian Airlines Qantas Airways Etihad Airways Qatar Airways MAS AirAsia Singapore Airlines Thai Airways International AirAsia Emirates Cathay Pacific ASEAN to/from Greater China Korean Air ASEAN to/from N. Asia Singapore Airlines ASEANto/from ANZ Singapore Airlines ASEAN to/from Europe Domestic Malaysia Source: OAG Aviation Intra-ASEAN ASEANto/from Mid East Going forward, we will prioritise our growth in regions where we can offer truly leading connectivity and defendable leadership positions. As Figure 24 highlights, the markets in which Malaysia Airlines competes today are highly fragmented: many airlines operate similarly-sized businesses. Beyond domestic Malaysia, Malaysia Airlines does not have a top two position in any market. The result is a relatively small and fragmented network compared to our competitors, and insufficient frequencies to meet the demands of our sought-after customers. This must change. Leveraging on our game changers, we will use strategic partnerships and alliances to extend connectivity especially to regions where there is a smaller commercial opportunity for operating our own aircraft. This will ensure superior connectivity for our customers while managing financial risks for our shareholders. By ourselves where we can, and with our partners where we must, we will build an increasing number of leadership positions. Our customers and our shareholders alike will benefit. Page 33 1 LAUNCH OF NEW REGIONAL PREMIUM AIRLINE The separation of businesses by aircraft type and distance travelled is increasingly common globally. Airlines including United, Qantas, Lufthansa and Singapore Airlines segment their businesses by aircraft type to some degree. The segmentation allows the airline with the smaller aircraft to focus on commuting and ‘feed’ services to the parent, while the airline with the larger aircraft can focus exclusively on serving long-haul passengers. Starting in the first half of 2012, we will launch our new regional premium airline, a short-haul airline connecting Malaysia to the rest of ASEAN and key cities in South Asia and Greater China. The new carrier will exclusively fly our incoming fleet of Boeing 737-800 aircraft with the latest in passenger amenities. While the early focus will be on key business routes less than four hours from Kuala Lumpur, the airline will eventually fly all domestic and regional routes flown by Malaysia Airlines today (Figure 25). Figure 25: Improved connectivity through regional premium airline To Tokyo To North Asia To Amsterdam To London To Paris New regional premium airline Malaysia Airlines mainline Page 34 Figure 26: oneworld benefits Enhance load factors through additional partner traffic and improved brand awareness Drive hub connectivity to facilitate international expansion and further destinations Leverage relationships to pursue joint purchasing Share equipment and resources for maintenance to reduce variable costs REVENUE EXPERTISE Leverage industry experience, management skills and expertise In the long run, potential advisors may come to Malaysia Airlines to share their international experience COST CAPITAL Alliance will offer us potential additional sources for capital Strengthens capital structure Supports / stabilises client’s valuation Long-term interest / investment in client Partner airlines (full members) 2 ALLIANCES PARTNERSHIPS In the second half of 2012, Malaysia Airli nes will become a full member of oneworld. The move toward an alliance will provide a broader network of international destinations, plus provide a basis for customers to increase their loyalty to our services (Figure 26). Beyond alliance membership, we are exploring the possibility of JVs with select partners in order to serve multiple markets together, while reducing the financial risks of participating individually. We look forward to sharing details of these initiatives in the months ahead. Page 35 3 COLLABORATION WITH AIRASIA The signing of the Collaboration Agreement with AirAsia and AirAsia X in August 2011 was a turning point for aviation in Malaysia. Working together will benefit all of our customers, improve our individual cost structures and grow Malaysia as a hub for tourism and aviation. For customers, collaboration offers opportunities to connect to more destinations seamlessly. In the coming months, the airlines will introduce a connecting service, allowing passengers on one airline to connect on select, non-overlapping routes served by the other carrier. At the same time, this move provides Malaysia Airlines with far broader reach, as passengers in more than two dozen cities around the region can be connected to Kuala Lumpur for their onward long-haul travel. Over the past few months, the three airlines have begun discussions about where joint procurement and consolidation of key activities could lead to greater efficiencies. Importantly, this is not about imposing one business model on the other. Rather, it is about looking for prudent opportunities where consolidated operations will deliver better service at lower costs for all. Fuel purchasing is one such area, where the combined scale of our global requirements can be used to negotiate better terms. For engineering , training and ground services, we can save capital costs by sharing common equipment and increasingly selling reserve capacity to other airlines. Already we have identified approximately RM100 million in annual savings for Malaysia Airlines alone. Ultimately, the collaboration must be about promoting the centrality of Malaysia as a hub for tourism and aviation in the region. With major hubs in Bangkok, Singapore and Hong Kong, we all have a role in ensuring the attractiveness of Malaysia to other airlines and potential travellers. Through collaboration, we have the opportunity to bring more scaled support services to Kuala Lumpur, and work with all government parties to create an environment hospitable to the growth of aviation. All collaboration negotiations and activities will, however, be carried out in full compliance with any regulatory or antitrust requirement. Page 36 4 ANCILLARY BUSINESS SPIN-OFF As documented earlier, we have significant opportunities to improve our productivity and simplify our core business. One element of addressing this will be to empower some of our scale support operations to spin-off and become separate companies in their own right. These new companies will be able to offer services to other airlines transiting in Malaysian cities. Their heightened scale will also benefit Malaysia Airlines, as cost efficiencies are passed back to the core airline. At the same time, separating management will drive more focused attention and will bring all businesses to globally best-in-class operational and profitability levels. Notably, this model has been used successfully by Lufthansa, Singapore Airlines and Cathay Pacific. Consistent with this plan, we will move to a new structure, where a holding company will become our primary listed vehicle. The core airline business and the scaled ancillary businesses will be held under this holding company structure. This will drive improved focus for each of the separate businesses and deliver truly leading cost positions to the airlines, as the spin-offs compete increasingly with their competitors for third party business. Proceeds from bringing on board strategic partners can be used to fund our recovery and broader strategic objectives. Figure 27: Corporate structure Holding Company 100% 100% In future lt; 100% 100% wide-body narrow-body including Firefly Turboprop 100% pilot training/ academy 100% round services Near-term priorities Identify strategic partners for divestment, and assure best-in-class airline support operations Page 37 Foundations Page 38 A BRANDED CUSTOMER EXPERIENCE The Malaysia Airlines of the future will strive to deliver superior customer experience at every touch point: when customers book flights, before, during or after the flights. In the months ahead, we will be making significant investments in tools and processes, from call centres and our website through to the layout of our aircraft to ensure that we are paying attention to all details that matter (Figure 28). Figure 28: Components of Branded Customer Experience Page 39 B CONTINUOUS OPERATIONAL IMPROVEMENT After reaching breakeven in 2012, we will further increase our profitability by making bold moves to align operational efficiency with the highest standards in the world (Figure 29). Our goal is to achieve the highest customer satisfaction while improving our revenues and operating as efficiently as possible. This improvement will come in several steps and will be anchored around three pillars: commercial excellence, best-in-class flight operations and cost optimisation. We know it will take time but we have the core assets to build on. On the people side, our employees have a proven track record of providing industry leading service. On the ‘hardware’ side, we are getting brand new aircraft and ground equipment that will provide us a strong base for improved flight operations. Figure 29: Continuous operational improvement Our revenues per ASK have been lagging those of our competitors. While a major effort will be done in 2012, we need to keep improving our capabilities. We will first revamp our sales and marketing strategies and combine them with best-in-class revenue management systems. We will also target more direct sales through our website. Lastly, we aim at building strong social media capabilities to improve marketing effectiveness. Commercial excellence Best-in-class flight operations Our customers want to get to their destination safely and on time. As we take delivery of our new fleet, we will target an increase in utilisation for all aircraft types. We will also reduce turnaround times and have more efficient engineering services from our MRO JV. We will conduct a thorough review of our fuel cost and investigate innovative ways to improve fuel efficiency. Cost optimisation We will be acting on two key levers to reduce costs. First, we will re-negotiate our procurement costs in catering, ground handling and maintenance. Our second lever is labour productivity. We will undertake a systematic comparison of productivity levels by function and department versus our competitors and strive to close the productivity gap. Where necessary, we will ‘right size’ the organisation to achieve costs in line with our peers. Page 40 C WINNING ORGANISATION A critical requirement to the recovery of Malaysia Airlines and achievement of sustained and consistent performance is to transform ourselves into a high performance organisation. There are a number of areas we need to address to achieve this important goal. Our labour productivity is well below our relevant competitors and our compensation philosophy is not sufficiently performance-based. In addition, our decision-making approach is cumbersome with a lack of clear accountability on key decisions. Because of the reduction in the network, there is a need to review the manpower level. We would like our organisation to be leaner, more nimble, customer-oriented and meritocratic with a compensation approach that ‘pays for performance. As part of this, we will realistically need to make targeted resource reductions. We recognise that this organisational transformation will be quite profound. We therefore commit to undertake this exercise by responsibly engaging with our employees and the Government so as to minimise the adverse impact of these necessary changes. We believe that these changes will make Malaysia Airlines a better place to work thereby enabling u s to attract the best talent and provide greater career advancement opportunities for our employees. Page 41 Our Commitment Page 42 Malaysia Airlines well-being and strength is a major component to the countrys economy. We carry the aspirations and pride of the Nation. Both at home and abroad, the Malaysia Airlines brand remains associated with our unique heritage of giving customers that personal touch. The airline also carries the expectations of all our employees, without whom the airline would not still be flying today, given all the challenges the Company has faced over the years. We are in a crisis and the current situation of the Company is a serious concern for our people, stakeholders, customers and business partners. We recognize that hard and unpopular decisions will need to be made along the way for MAS’ survival and future success. We will treat these decisions with the gravity that they merit, and forge solutions in the best interest of our employees, shareholders, customers and strategic partners. As this journey of recovery has begun, we ask for your support, patience and understanding as we rebuild Malaysia Airlines as the preferred premium carrier. The Preferred Premium Carrier 1 2 3 4 5 Smaller yet profitable network Win back customers Relentless cost focus Keep it simple Bridge the funding gap A Launch of new regional premium airline 1 Alliance and partnerships 2 Collaboration with AirAsia 3 Ancillary business spin-off 4 Branded customer experience B Continuous operational improvement C Winning organisation Page 43 Five-year initiatives Produced by GCEO’s Office at Malaysian Airline System Berhad MAS Complex A, Sultan Abdul Aziz Shah Airport 47200 Subang, Selangor Darul Ehsan Malaysia www. malaysiaairlines. com