Couple of days after I'd written about Singapore Airlines (SIA) losing market share, the company shocked the business world today by reporting that Q1 profit dived 82% from a year ago.
I don't like to say this but hey... I told you so!
As usual, they said fuel prices were to blame. Which airline isn't affected by it?
And seeing that they, together with subsidiary Tiger Airways, have been appointing "foreign talents" to head up operations, we would expect them to do better.
Instead, competitors like Emirates and Cathay Pacific have been steadily chipping away at SIA's market share.
Former Straits Times journalist Rodney King's book "The Singapore Miracle - Myth and Reality" threw doubts on the PAP's claims of "cutting-edge efficiency, global competitiveness, economic freedom and transparency."
A must read for anyone concerned about our future sustainability as an economic success. While it may not be as ubiquitous as a certain other politician's books, you should be able to find it at Kinokuniya at Ngee Ann City and Select Books at Tanglin Shopping Centre. And there's always Amazon.com.
When ex-SDP candidate and current Presidential hopeful Tan Jee Say introduced his S$60 billion National Regeneration Plan (NRP) during the lead up to the May Elections, many PAP Ministers including his former employer Goh Chok Tong rushed to shoot it down.
The reason is simple.
This plan benefits Singaporeans, not PAP.
Part of it involves training another 30,000 teachers and building 300 more schools. The aim is to bring down class room size which has remained the same (40) since I was in primary education in the early 80s!
It will also save Singaporean parents the unnecessary grief of the daunting balloting for primary school places.
Another part of it advocates a regeneration of our manufacturing industries and move towards higher productive and higher valued service-related industries. Currently, the MNCs and Government Linked Companies are enjoying huge amounts of tax breaks, rental subsidies etc but are creating lower quality jobs for Singaporeans. Many MNCs are also guilty of exploiting the lax foreign labour laws and hiring foreigners to occupy the better positions.
Why is the PAP so apprehensive of the NRP? Afterall, it is endorsed by a former British Head of Civil Service. (The British incidentally were responsible for many of our institutions, including our Civil Service)
- MNCs might start to pack up and leave. This reduces demand for foreign workers and affects population growth. GDP is hit and Ministers lose some of their bonuses.
- GLCs may be dismantled much like what happened to the Chaebol. With so many of the party's fraternity related to these GLCs, it's anathema.
- They will have to start spending more on healthcare, education and social services. Which leaves little for Temasek and GIC to play with.
In 2008, a political storm swept across Malaysia resulting in Barisan Nasional's worst electoral showing ever.
And to this day, the storm hasn't let up.
This minor democratic success served as a wake up call to the country's ruling elite culminating in the Economic Transformation Programme (ETP).
Call it funny, creative, cheesy or anything else, its exactly what Singapore needs. Malaysians may already have surpassed our quality of life. The ETP should help them race ahead one day.
Showing posts with label Singapore Airlines. Show all posts
Showing posts with label Singapore Airlines. Show all posts
Saturday, 30 July 2011
Monday, 25 July 2011
MAS loses money, SIA losing share
It's that time of the year again. Nope I don't mean Christmas.
National Day is approaching and our PAP ministers have taken out the huge banners of themselves and pasted them all over the country.
This is probably one of the two occasions where our million dollar MPs are generally seen. The other is General Elections.
I say this because the Monetary Authority of Singapore (MAS), currently helmed by Tharman Shanmugaratnam, PAP MP for Jurong GRC, made a record S$10 billion loss in FY ended March 2011 and blamed it on external factors.
Quoting Ravi Menon, Managing Director of MAS, "The translation loss is not a factor. It is just a reporting phenomenon where you report in Singdollar, the strength of the Singdollar diminishes the value of the reserves. Like I said, if we had reported our results in foreign currency or US dollar, this is not an issue."
Firstly, any commercial or government entity anywhere in the world reports in local currency.
Secondly, any of such organisations invested in foreign assets is susceptible to foreign currency movements.
Thirdly, most Asian currencies have steadily appreciated against the US dollar since the 2008 global financial crisis. And the current wrangling in Congress over the debt ceiling is reinforcing the weak sentiment for the dollar.
To pin the blame of the huge loss on currency strength is nothing short of lame. Hedging Mr. Menon?
Also, currency translation DOES affect the bottomline. It is not just a reporting phenomenon because it translates into real profits or losses.
In any case, Hong Kong Monetary Authority netted HKD 79.4 billion in profits in the same FY.
This incident brings to mind MAS' inept handling of the minibond crisis. MAS basically told investors to seek their own redress despite the fact that they are tasked to regulate all elements of monetary, banking and financial aspects of Singapore.
Hong Kong's Chief Executive Donald Tsang in contrast, vowed to bring the people responsible for saga to justice.
His government's resolve, coupled with the strong consumer movement, forced DBS to return Hong Kong investors most of their money. Singaporean investors on the other hand, were told to f**k off, despite the fact that DBS is a Singapore bank!
Well actually Singapore bank in name. DBS has been run by a string of come and go foreigners like John Olds, Phillipe Paillart and Jackon Tai. Even Piyush Gupta, the latest head honcho, is an Indian.
Retired politician Lee Kuan Yew reiterated his penchant for foreigners by saying they are "vital" to Singapore.
I'll accept if he said they were important. But "vital"? What is he on?
I suppose local universities like NUS and NTU have been screwing up so badly that no Singaporean is qualified to head the country's own financial institution.
Malaysian CEO and founder of Air Asia, one of the world's fastest growing airlines questioned Singapore Airline's faith in locals when they keep hiring "foreign talents" to lead the business. Air Asia's commercial head is Singaporean!
Incidentally, Air Asia made record profits of US$500 million in 2010, fast catching up with SIA's US$800 million. That's why they are rushing to set up a low cost-long haul carrier to compete with the former.
The points I'm trying to make in this entry are:
1) Singaporeans are a clever bunch. Ministers and GLCs can no longer hogwash their way into explaining poor performance.
2) Because 1) is true, Singaporeans can and should lead their own national companies. Furthermore, there is no empirical evidence to suggest that foreigners have raised the standard of business in the country.
In any case, let's take off with Asia's first and leading low cost long haul airline.
National Day is approaching and our PAP ministers have taken out the huge banners of themselves and pasted them all over the country.
This is probably one of the two occasions where our million dollar MPs are generally seen. The other is General Elections.
I say this because the Monetary Authority of Singapore (MAS), currently helmed by Tharman Shanmugaratnam, PAP MP for Jurong GRC, made a record S$10 billion loss in FY ended March 2011 and blamed it on external factors.
Quoting Ravi Menon, Managing Director of MAS, "The translation loss is not a factor. It is just a reporting phenomenon where you report in Singdollar, the strength of the Singdollar diminishes the value of the reserves. Like I said, if we had reported our results in foreign currency or US dollar, this is not an issue."
Firstly, any commercial or government entity anywhere in the world reports in local currency.
Secondly, any of such organisations invested in foreign assets is susceptible to foreign currency movements.
Thirdly, most Asian currencies have steadily appreciated against the US dollar since the 2008 global financial crisis. And the current wrangling in Congress over the debt ceiling is reinforcing the weak sentiment for the dollar.
To pin the blame of the huge loss on currency strength is nothing short of lame. Hedging Mr. Menon?
Also, currency translation DOES affect the bottomline. It is not just a reporting phenomenon because it translates into real profits or losses.
In any case, Hong Kong Monetary Authority netted HKD 79.4 billion in profits in the same FY.
This incident brings to mind MAS' inept handling of the minibond crisis. MAS basically told investors to seek their own redress despite the fact that they are tasked to regulate all elements of monetary, banking and financial aspects of Singapore.
Hong Kong's Chief Executive Donald Tsang in contrast, vowed to bring the people responsible for saga to justice.
His government's resolve, coupled with the strong consumer movement, forced DBS to return Hong Kong investors most of their money. Singaporean investors on the other hand, were told to f**k off, despite the fact that DBS is a Singapore bank!
Well actually Singapore bank in name. DBS has been run by a string of come and go foreigners like John Olds, Phillipe Paillart and Jackon Tai. Even Piyush Gupta, the latest head honcho, is an Indian.
Retired politician Lee Kuan Yew reiterated his penchant for foreigners by saying they are "vital" to Singapore.
I'll accept if he said they were important. But "vital"? What is he on?
I suppose local universities like NUS and NTU have been screwing up so badly that no Singaporean is qualified to head the country's own financial institution.
Malaysian CEO and founder of Air Asia, one of the world's fastest growing airlines questioned Singapore Airline's faith in locals when they keep hiring "foreign talents" to lead the business. Air Asia's commercial head is Singaporean!
Incidentally, Air Asia made record profits of US$500 million in 2010, fast catching up with SIA's US$800 million. That's why they are rushing to set up a low cost-long haul carrier to compete with the former.
The points I'm trying to make in this entry are:
1) Singaporeans are a clever bunch. Ministers and GLCs can no longer hogwash their way into explaining poor performance.
2) Because 1) is true, Singaporeans can and should lead their own national companies. Furthermore, there is no empirical evidence to suggest that foreigners have raised the standard of business in the country.
In any case, let's take off with Asia's first and leading low cost long haul airline.
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