Skip to content

What next for Malaysia Airlines?

2014 August 7
Comments Off
by Passer over Perilous Ways

To lose one plane is an accident,
to lose two …

Malaysia airlines logoAn old joke runs something like this. A man, down on his luck, drives up to a cliff edge and says he’s going to drive right over it. All the people there take pity on him and have a collection to get him back on his feet. “Who where those people?” someone asks. “The passengers on his bus” comes the reply.

Given the popular suicidal pilot theory for the disappearance of Malaysia Airlines flight MH370 in March this year, one presumes this driver didn’t share his problems with his passengers first.

 

Red and Blue

Another tired old joke is the one about the struggling flag-carrier airline; loss-making year-on-year and only surviving through being propped up by the state. Malaysia Airlines comfortably fit this mould before the unfortunate and tragic disappearance of MH370 in March and the shooting down of MH17 in July. Stories of imminent bankruptcy tend to surround these struggling airlines like flies surround a pile of poo and they have risen in recent months in inverse proportion to this carrier’s appalling bad luck.

Airline passengers are a surprisingly forgiving (i.e. forgetful and penny-pinching) bunch though. All airlines have passenger-impacting problems from time-to-time – accidents, strikes and mechanical issues – that leave thousands of incensed people screaming they’ll never fly with them again. A few months go by, a few cheap deals are offered, a few competitor airlines piss off their clientele too, and things generally return to normal. Following MH317 in March, the airline’s reported load factor by June  was down by only around 7% on a year earlier.

Airline passengers are a surprisingly forgiving (i.e. forgetful and penny-pinching) bunch
Airlines can unquestionably survive these sorts of problems relatively unscathed and the bankruptcy reports circulating them often smack of “invented news”.

But is this the case with Malaysia Airlines at the moment? Though reports indicate it has plenty of cash to keep it going for the next year something could well be afoot in this case. The airline has not made many official announcements about it’s penurious situation but it did respond to press reports of a potential privatisation in early July with “…such a decision is in the hands of MAS major shareholder and the Government of Malaysia”

Something could well be afoot.

But what?

 

Red and Black

The media seems to like the “taking it private” story and since, only three weeks after the shooting down of MH17, the airline’s share price has already recovered to its post MH370 levels it suggests the market likes it too (or even perhaps knows something it shouldn’t)

And the story does have much to recommend it. Bankruptcy of a flag-carrier is embarrassing and potentially disruptive, and Malaysia is not constrained by the sort of state support rules that perhaps precipitated the demise of Sabena and Swissair, and which seem largely to be ignored in the ongoing survival of Alitalia.

The airline is also nearly 70% owned by Malaysia’s sovereign wealth fund and, trading at around its net asset value, bankruptcy wouldn’t appear to offer much financial benefit –  especially if the government is going to end up intervening to save it anyway.

But there’s more than one way a government can intervene and more than one way to cut its losses. I wonder if the privatisation-bulls may be a touch too sanguine.

 

Black and white

It does appear that the fate of Malaysia Airlines largely rests with the government, but governments don’t have a great track record of running profitable airlines. Malaysia’s choice is between buying the remaining 30% of the airline and potentially bankrolling its ongoing losses, or taking an up-front loss on the 70% they do own.

Many national airlines have entered bankruptcy only to emerge leaner, fitter and stronger. Take the aforementioned Sabena for example, now flying as Brussels Airlines and 45% owned by Germany’s Lufthansa, or the aforementioned Swissair, now rebranded Swiss and 100% owned by Germany’s Lufthansa.

Hmmm, there’s a pattern here.

 

Black and blue

Many years ago I was working for a small IT startup which went titsup and called in the receivers. Within a day a buyer had been agreed for its assets; a buyer who intended to re-launch the service itself. By any measure this was suspiciously quick work on the part of the administrators and suspiciously quick planning on the part of the buyers. And there was very little that loss-making creditors (like myself) could do about it.

If a buyer has been found before bankruptcy happens then embarrassment and disruption aren’t problems at all
Given the odds against a government making a profit by taking a national carrier private, I can’t help thinking Malaysia’s might prefer an up-front loss whilst securing new ownership for its flag carrier. And since recent reports suggest the airline has a year’s worth of cash and equivalents to keep it going, the government has time to pull that off. Bankruptcy need only be embarrassing and disruptive for the period between a company declaring it and a fire-sale buyer being found; if a buyer has been found before bankruptcy happens then embarrassment and disruption aren’t problems at all.

A bankruptcy filing followed by an, er, impressively quick announcement of another airline – a gulf carrier such as Etihad or Emirates for example – buying the assets (on the cheap compared to buying it as a going concern) with a commitment to keep the brand alive and the staff on the payroll sounds like a rather more sensible approach to me. The Malaysian government saves its airline, saves the jobs, relieves itself of the burden of trying to make it profitable and minimises the losses to its sovereign wealth fund.

Everyone’s a winner (well, except perhaps for the other 30% shareholders)

But then common sense and national airlines don’t often go hand-in-hand. There’s a reason for old jokes and most probably Malaysia’s sovereign wealth will soon be the lucky 100% owner of a loss-making airline after all.

 

Can finish, won’t finish

2014 July 7
Comments Off
by Passer over Perilous Ways

A not-so-wet dream has me pondering both the predictive power of our sleep-time show-time,
And the waning power of my libido

A limp weinerWet dreams are of course most readily associated with the hormonal holocaust of adolescence. When a fortysomething like myself wakes up in a damp patch it’s far more likely to be an early visit from the incontinence fairy. But, though they are something of a rarity for me in these days of my dotage, I will admit to still waking up from time-to-time to find that I’ve shot my load in my shorts.

The trigger is always the same; a dream in which I’m having sex which suddenly feels partly real, in which the mental division between pure fantasy and physical sensation short-circuits and pretty quickly jolts me awake. Not always though, quickly enough.

Wet-dreams are rare enough to have just some novelty value for me now and I’ve been round the block far too many times to be embarrassed by them. They’re somewhat “as-per”.

Only I recently had one which was not “as-per.” A wet-dream in every single respect bar one, a sexual dream which suddenly seemed real and jolted me awake, only it wasn’t a wet dream but a dry one.

I didn’t come in reality because I couldn’t come in my dream.

 

Can come

I’ve never had this problem in real life (no, honest!) I get sex far too rarely to be in any way jaded by it and I’m a long, long way from pestering my quack for some Viagra or one of its bathtub variants. Hell, I’m still working on stopping myself from finishing too soon, let alone not being able to finish at all.

Which makes me wonder where this dream came from (no pun intended). Our dreams are a by-product of how our brains work; using its night-time down-time to take stuff from its inefficient short-term memory and mapping it into its long-term memory. It’s a process where our mind hunts for patterns, rules and relationships between our entire life’s experiences and the events, preoccupations and worries of our immediate experiences. It throws up some bizarre images, but when you look into the few you might be able to hang onto the following day you can usually find some logic and sense to them if you dig deep enough.

So, as a man not especially preoccupied with my aging, not suffering from an obviously waning libido, who’s only problems with sex are getting it and keeping it going long enough to have a chance of getting more of it, and who hasn’t had any recent conversations with friends about sexual inadequacy or read about it or seen films or TV shows relating to it, I am at something of a loss to explain why I would be dreaming about humping a hot eighteen year old for two straight hours and tapping the mat only when she’d fallen asleep and wouldn’t know that I didn’t get off.

Where the hell did this come from?

Unfortunately I can only find one credible explanation.

And it isn’t a comforting one.

 

Won’t come

More romantically disposed people than myself (i.e. idiots) may believe in a certain mysticism surrounding dreams; that they can predict the future or that they hold messages for us from beyond this world. To a realist like me this is total horseshit. Dreams are a by-product of our experiences, both near and far. They may reflect back to us aspects of our reality that we’re consciously ignorant of, and in this regard they can surely have some value, but they are firmly rooted in who we are as a person and where we’ve been as a person.

My dreams became sexualised before I consciously became sexualised myself
But this glib little summing up isn’t entirely accurate. Our dreams can sometimes be ahead of the curve too.

I hit puberty in the eighties, well before the sex-everywhere days of near-pornographic music videos and easily accessible Internet smut that we live in now. When I hit puberty, I was totally and utterly naïve; my knowledge limited to a single sex education lesson at high school that I didn’t remotely understand.

Yet, before I detected puberty happening to me and well before any experiences sprung from it to fuel my dreams, I was nonetheless having sexualised dreams. I didn’t understand why I was suddenly obsessed with girls and fantasising about seemingly bizarre situations with them, yet I was. My dreams became sexualised before I consciously became sexualised myself.

 

Don’t come

So it would seem then that our dreams do reflect more than just our experiences; they reflect our nature and our instincts too, even before we’ve acquired any experiences from following those instincts. Dreams can’t predict the future in the crystal ball sense of that phrase but they can act as harbingers of the future by reflecting changes in the natural life-phase we are in, even if we don’t yet know we’re in it.

Our dreams do reflect more than just our experiences; they reflect our nature and our instincts too
As an adolescent I dreamt about girls far before I had any real understanding of why and far before I had any material for such dreams. As a middle-aged man I find myself dreaming about a waning sex drive far before I have any material for such dreams too. Could it be the same thing?

If so, if this is a case of a dream that is ahead of the curve, I hope it’s a long, long way ahead of it!

 

 

The case for change, in your change

2014 June 22
Comments Off
by Passer over Perilous Ways

Are there more Scottish banknotes in circulation in the run-up to the independence vote?

Scottish bank notesAs someone regularly engaged in a spot of missionary work north of the border I’m well used to the odd Scots’ fiver or tenner passing through my wallet.

Most Brits are aware that Scotland (and for that matter Northern Ireland and on a subtly different legal basis Gibraltar) have their own banknotes. Even those who have never travelled to the outskirts of the Union will have been landed with one at some point in their lives and been greeted with grumbles and rolling eyes (or even flat refusals) when trying to pass them to a tradesman or shopkeeper outside of their country of origin.

Fortunately I visit Scotland often enough to avoid this particular “sport” (and, both knowing and loving the Scots’ sense of humour, I wonder if it’s the only reason they print them in the first place). I visit Scotland often enough to be able to hold onto them ’til the next time I’m up there.

I also visit Scotland often enough to notice a change in those ethnic fivers and tenners recently.

There seem to be an awful lot more of them.

 

Historical facts

According to the Committee of Scottish Bankers the first Scottish bank to issue banknotes was The Bank of Scotland in 1695. According to the Bank of England’s latest Scottish and Northern Ireland Banknote Issuance report they have been regulated by the British Government since 1845 and have been under the purview of the Bank of England since The Banking Act of 2009. Currently there are three Scottish commercial banks who print their own banknotes – The Bank of Scotland, The Royal Bank of Scotland and Clydesdale bank – and current legislation allows them to do so on the condition that they hold sufficient assets to back their issue.

Of particular note to the conspiracy theorists amongst us is that the issue of Scottish banknotes is not within the power of the devolved Scottish assembly, nor for that matter the British government, it’s entirely down to the commercial banks themselves. This perhaps partly accounts for the anomaly that, whilst they are legal Sterling currency they are not legal tender – not even in Scotland where no currency technically enjoys the status of legal tender; their acceptance is entirely at the discretion of whomsoever one is trying to pass them to.

 

Statistical facts

The Committee of Scottish Bankers website states that “The majority of banknotes circulating in Scotland are issued by the Scottish banks.” It is therefore not surprising that I’m well used to a regular stream of these fivers and tenners passing through my hands when exchanging a crisp English twenty pound note for a Starbucks or a takeaway when I’m up that way. Of late though I seem to be getting back Scottish banknotes almost exclusively and, with the independence referendum just round the corner, that this particular symbol of nationhood seems more prevalent has my spidey-sense tingling more than somewhat.

Scottish Banknotes in circulation - June 2011 to June 2014 (source: Bank of England)

And the Bank of England’s regulatory reports, available online for the last four years, seem to suggest my suspicions may not be entirely groundless. In the three years between June 2011 and June 2014 when these reports are issued, there has been around an 18% increase in Scottish banknotes in circulation, from approximately £3.5bn to the current £4.1bn.

This is hardly a smoking gun of course, but that’s still well ahead of price inflation or GDP. And bearing in mind that they are printed by commercial banks rather than the government – hardly a flourishing sector at the moment – and that they must be backed by assets in order to be printed, that increase does seem something of an, er, achievement to me.

And while the Scottish Nationalist majority in the Scottish Assembly might not have direct control over their printing (at least not yet!) that doesn’t mean a little soft-power isn’t being wielded somewhere.

 

If I were a Scotsman…

On September 18th 2014 Scotland will vote on independence from the United Kingdom and, without wishing to appear dismissive, as an Englishman I don’t really care much which way the vote goes. I mean, for me, what really changes? It’s not like Sultan Salmond will be sawing Scotland off at Carlisle and towing it away the minute he’s freed from the imperial yoke. Scotland belongs to the Scots; if they vote for independence then the best of luck to them and if they vote to stick with the UK, hey, that’s just great too.

If I were a Scotsman I’d be sorely tempted by the idea of independence. As a man who has been self-employed for most of his life the notion of going it alone and doing better for yourself is deeply ingrained in me. Yet, and in spite of that, I would most certainly vote to stick with the Union.

At least under the current system the Scots and the rest of the Brits are sharing the cost of a smaller pool of these bozos
Because countries aren’t run by people like me. Countries are run by politicians; the sort of people who inspire the thoughts of spin, gamesmanship and backroom deals that make me instantly suspicious when I notice an increase in the number of Scots banknotes I’m getting in my change. Like most of my compatriots I wouldn’t trust them as far as I could throw them.

And therein perhaps lies the most pragmatic and overarching argument for sticking with the Union. Independence means two smaller administrations and the law of economies of scale states that the sum of those parts will be greater than the current whole. We’ll all end up paying more money for more politicians and more civil servants.

At least under the current system the Scots and the rest of the Brits are sharing the cost of a smaller pool of these bozos.