Beruflich Dokumente
Kultur Dokumente
1.0 INTRODUCTION
Malaysia Airlines System (MAS) was opened in 1947 doors with just one
twin engine Air Consul that sat only five. However, it has become an award-
winning airline with a fleet of more than 100 aircraft, spreading its wings
across six continents and servicing more than 100 different destinations.
Malaysia Airlines System Berhad is a corporation that provides a transport
service that ranks among the best in terms of safety, comfort and
punctuality, distinguished and loved for its personal touch and
warmth. Furthermore, MAS also aim to set new world standards continually
with our enhanced in-flight services, reliable ground support and excellent
infrastructure and to respond to consumer demand for worldwide coverage.
1.2 Objectives
The objectives of our assignment are to find out the problems that Malaysia
Airlines System (MAS) is facing now such as the debt of MAS and the main
competitor of MAS. MAS is facing financial problems currently and many
solutions had been taken to solve this problem. Is it this problems can be
solved? Or their financial problem will become more terrible? Moreover,
MAS is also facing their main competitor in the industry of airlines. What is
MAS going to do to ensure that it will be the winner in this “competition”?
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Additionally, MAS are using packages and promotion to attract public using
their services. MAS unique packages are designed to suit their traveling
style. Whether it’s a trip that gives the freedom to plan their own fun or one
with a well-planned itinerary, just browse through packages that had
provided by MAS and they will find the one that is just perfect for them.
Besides, to price flexibility, each fare segment has its own set of rules and
regulations covering aspects like ticketing deadlines, refunds, cancellations,
no-shows, advance purchase eligibilities and fare restrictions.
Service
Malaysia Airlines’ world-class service is found in the air and also on the
ground. From the state-of-the-art training facility of Malaysia Airlines
Academy to Ground Operations and Engineering Services, MAS
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1. Engineering
2. Ground Handling
3. MASkargo
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Promotion
Malaysia Airlines System Bhd. (MAS) clearly has its strength as a “5 star”
airline with a highly reputable brand backed by a highly service oriented
staff. More importantly, MAS specialize in making long distance travel not
just comfortable, but luxurious. This expertise has been rewarded with
international awards for best signature dish, best airline lounge, best
business class, and overall best airline. The heart of their service, their cabin
staff, was even named "World’s Best" for three consecutive years.
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Pricing
Malaysia Airlines today implemented a new “micro-segmentised” fare
system for its rationalised domestic network covering 23 routes, in line with
the ‘Flying to Win Customers’ thrust of MAS Business Turnaround Plan,
will see the introduction of 2 business class and 5 economy class segments
one-way fares offered through both Malaysia Airlines offices (Call Centre
and ticketing) and travel agents. These fares and other two-tier economy
class segment one-way fares are also offered online. In addition to price
flexibility, each fare segment has its own set of rules and regulations
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fares and all other discounts. However, during the implementation of the
‘micro-segmentised’ fare system effective today, Malaysia Airlines will
continue to honour all transactions paid at the previous fares. To ensure
transparency of transactions, all fares offered effective immediately will be
reflected on the tickets or transaction slips for customers, in line with the
airline’s recent cut over to nett fares display on tickets.
Place
For the destinations, MAS fly to over one hundred destinations across six
continents and look forward to flying with their customers. They fly over
not only in Malaysia but also foreign countries that includes North America,
South America, Europe, Africa, Middle East/Asia, Austria/ New Zealand
and so on. Malaysia Airlines also known as one of Asia's Premier Airlines
that offers company an intensive network to more than 100 destinations
across 6 continents around the globe. Additionally, the Malaysia Airlines
Corporate Nett Fares Programme which is very competitive and attractive
designed for all corporations that travel extensively on Malaysia Airlines
international sectors.
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In October 2005 until December 2005, Malaysia Airlines was reported a final
quarter loss of RM616.4 million and a net loss of RM1.3 billion financial period
in April 2005 until December 2005. Actually, the MAS lose occurs since 1998
and looses are straight away until now. This loses was happened because of the
poor planning and wrong decisions by the management. The loss was occurring
because the cost increases by 28.8 or RM2.3 billion. The factors that the financial
problems was happened are:
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to fuel experimentation and expansion into new frontiers. The 19 routes are
critical because they generate an average of 15,000 passengers annually
connecting to its international network. The unprofitable routes also include
certain destination in China. The routes are direct flight between Kota
Kinabalu and Shanghai and Kuala Lumpur between Chengdu. Beside that,
MAS also have unprofite problem for routes London – Pulau Pinang –
Kuala Lumpur, London – Langkawi – Kuala Lumpur, Sydney – Kuching –
Kuala Lumpur, Kuala Lumpur – Kuching – Pert and Frankfurt – Kuala
Lumpur –Kuching. The low loads of two destinations because of the proper
marketing activities by MAS.
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kilometers. For the each design the airbus can carry 555-840 passengers.
The motif to buy this airbus is to increase the performance in the future.
MAS target that would snatch the title of biggest passenger plane from rival
Boeing's 747. With Malaysia Airlines' selection, Airbus has now 103 orders
and commitments from 10 customers for the A380 programme. Built to the
latest and most stringent certification requirements, the 555-seater A380
embodies the most advanced technologies, providing 15 to 20 per cent lower
operating costs than the largest aircraft flying today and 10 to 15 per cent
more range. Beside that, passengers also can get others benefits as a
spacious cabin and wider seats, including those in economy class while
airlines will reap the benefits stemming from Airbus' unique operational
commonality inherent in its fly-by-wire family of aircraft, as well as from
lower operating costs.
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3.0 SOLUTION
As a solution to overcome the loss and debt facing by Malaysia Airline System,
the company had came out with a business turn around plan. The business
turnaround plan has been carefully sequenced over the next three years to deliver
cash, profitability and growth-in that order of intensity and focus. The Business
turnaround roadmap comprises the following elements:
1) Cash-Flow Survival Actions include a rigorous and disciplined cash
management programme to stop and reduce the cash-burn rate of the
company, both in terms of operating cost and also capital expenditure. It also
seeks avenues to secure immediate short-term cash injection and financing,
including sale of assets. Malaysia Airlines is currently in discussion with the
Government on the modality of such financial support.
2) Profit Turnaround Actions comprise revenue management and cost reduction
initiatives. All routes have been fully analysed into individual Profit and Loss
Statements, better pricing and revenue management techniques and improved
sales channels will be introduced to increase yield and revenue, commensurate
with its 5 star service quality and taking account of competition for each route.
This has to be done very carefully. This is used as the pathfinder for other
routes elsewhere. Various cost reduction programmes are being pursued in the
area of fuels efficiency, procurement savings and so forth.
3) The Human Resource and People Actions are aimed at unleashing the talents
of everyone in Malaysia Airlines to achieve the business turnaround Plan
through leadership, accountability and teamwork.
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3.2 Malaysia Airlines System take what steps had been taken via business
turnaround Plan:
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3.3 Malaysia Airlines System Business in the future, how the solves their
company crisis.
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4.1 STRENGTH
Brand recognition
Malaysia Airlines’ brand equity continues to gain recognition. This is a
major strength to MAS for compete in airlines system compare with other
airlines. In 2005, SkyTrax, the preeminent airline quality monitor, awarded
national airline a “five star” status, one of only four airlines in the world to
be given this accolade. This is a testament to the strong brand equity they
have built over the years, a result of their dedication towards providing the
highest quality service possible. This recognition follows four consecutive
years of Malaysia Airlines winning the “best cabin crew” award also from
SkyTrax. Besides this, Malaysia Airlines was designated the “Best Airline
to Asia” by TTG (2005) and the UK based travel periodical, Travel Weekly
(2006). The recognition of Malaysia Airlines as the pre-eminent airline to
Asia coupled with their strong base of loyal customers should combine to
form the cornerstone on which the new management team can quickly return
the company to profitability.
MAS have very strong technical skills and highly trained cabin crew
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MAS' maintenance staff, flight operations staff and ground crew are world-
class in their technical skills. They strong safety record has much to do with
their staff and crews' attention and capabilities. These skills are not just a
source of strength for MAS, but also a potential source of revenue as MAS
looks to broaden its business activities. Their cabin crew are highly trained
and committed to excellent service and our five-star rating owes much to
their grace and professionalism.
Government support
The government’s decision to remove the floor price for Malaysian Airlines
is a positive step for the market and the local aviation industry. For MAS to
compete with Air Asia, fares have to be competitive in this dog-eat-dog
industry. A low cost carrier must be prepared for competition. Allowing Air
Asia to determine is fares and MAS to adhere to market fares would only
result in the national carrier being on the receiving end. Air Asia is a low-
cost carrier targeting a specific segment of the market while MAS, as a full-
service airline, is targeting a different segment. The government has made
the correct decision. Putting a floor price on MAS would be seen to be
favouring another airline. The government decision that MAS had been
given permission to continue offering discounted fares on domestic routes,
and Government had also decide that the national carrier should also fly the
Johor Baru-Kuching, Kuala Lumpur-Tawau, and Kuala Lumpur-Sandakan
routes which were deemed to have a high volume of business travelers. It
became strength to MAS for increase their market in their future because
customer can prefer use their service more than Air Asia.
4.2 WEEKNESSES
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when the liquidity level is low. Beside that the company is lack of efficient
and effectiveness to control the cost operation due to its profitability of the
business. It can looked that Malaysia airlines System was reported that
have loss in cost management where cargo revenue decrease by RM
64.1m to RM 1.5billion and cost increased by 28.8%,primarily due to
escalating fuel price. Other significant cost increase included staff cost,
handling landing fees, and aircraft maintenance and overhaul charge. The
most substantial factor for the losses of cost management was from fuel
cost.
Despite a low starting point, MAS' costs have risen by over 20% in the last
year and show no signs of flattening. Furthermore, their productivity is at
the low end of their peer group. They need to have much higher
productivity than their peers to be able to survive and prosper in their
smaller revenue environment. As their factor costs rise, will see a
disproportionate increase in costs unless they can become much more
efficient with their resources. Of particular concern is their fixed cost base.
MAS have millions of ringgit invested in some real estate and equipment
through its offices around the world that do not directly contribute to
revenue production. Without strong and decisive action, MAS' losses will
continue to grow. Natural factor cost growth and new obligations such as
new aircraft, facilities and product enhancement, combined with the effect
of new regional capacity on revenue, will cause costs to continue to
increase sharply while unit revenue continues to fall.
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into the scene the national carried had monopolized the domestic sector.
When Malaysia Airlines System failure to manage the domestic route the
government will end the subsidies given to MAS and offer to Air Asia to
share the route with MAS. Today Air Asia becomes affordable and
reliable Airline, that is making a hit among Malaysians and now it has
expanded its operation to cover Indonesia, Thailand and Singapore. The
flight to certain locations can be as cheap as RM9.99 when customer book
very much in advance Even if customer get these dirt cheap tickets ,
generally the price is much lesser than the national carrier MAS. It flies to
major city and towns in Malaysia.
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for airline like MAS that have a strong brand name to improve the service
management.
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through the right opportunities. They are also a company with relatively
little experience with accountability. Based on their internal employee
survey last year, their employees report little confidence in the
management team and their managers report that they do not feel that
there are any repercussions for staff who miss targets and deadlines or
who do not meet key performance indicators (which have recently been
adopted). Further, people tend to be jealous of success, rather than being
inspired by it. Simply put, MAS will require a significant organizational
overhaul to be able to survive in the new world.
4.3 OPPORTUNITY
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4.4 THREAT
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Main competitor
Air Asia is a low-cost airline based in Kuala Lumpur, Malaysia. It
operates scheduled domestic and international flights and is Asia's leading
low fare no frills airline and first to introduce "ticketless" travelling (no
specific seats allocated before boarding). Air Asia has been expanding its
operations extremely rapidly and is very popular, but also infamous for
frequent significant delays. Its main base is Kuala Lumpur International
Airport (KUL). It currently operates from the 1st ever low cost carrier
terminal in Asia at KLIA. In 2003, Air Asia opened a second hub at Senai
Airport in Johor Bahru near Singapore and launched its first international
flights to Thailand. Air Asia has since started a Thai Air Asia subsidiary,
added Singapore itself to the destination list, and started flights to
Indonesia. Flights to Macau started in June 2004, while flights to mainland
China (Xiamen) and the Philippines (Manila) were started in April 2005.
Flights to Vietnam and Cambodia followed later in 2005.
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Competition with Air Asia also became threat to MAS because many
passengers prefer use Air Asia service compare than MAS. Air Asia is a
one airline system provides low-cost airlines. The flight to certain
locations can be as cheap as RM9.99 if the customer book very much in
advance. Recently Air Asia has started to fly to several South East Asian
countries; all this was built on their success story of providing incredibly
affordable flight tickets. The emergence of Air Asia has filled a gap in the
customer demand and has even force other major Airlines in the region to
come up with such a service. From Kuala Lumpur Thailand to Bangkok
and customer from Bangkok that using Air Asia can go Chiang Mai,
Chiang Rai, Nakhon Ratchasima, Udin Thani, Kon Kaen and Hadyai. Air
Asia has been able to grow earnings, achieve strong passenger growth, and
reduce unit costs to remain the leading low-cost pioneer in the region. Air
Asia's very success has bred fears among MAS staffers that its seeming
failures vis-a-vis its upstart competitor could lead to policies that could
have a bad effect on the national carrier. Air Asia has one of the lowest
costs in the industry and they can offer the low fares to consumers
irrespective of the oil price. Although, they revenue management system is
very sophisticated and they address to movements in their cost. Air Asia
has encountered and overcome many adversities, including high fuel
prices, in the early stages of its growth. They also will have more expe-
rience than the new LCCs to cope with the new adversities. Air Asia
became main competitor to MAS because they monopoly domestic route.
MAS can’t compete with Air Asia in term of price in domestic route.
Because of this many domestic customer prefer to use Air Asia compare
than MAS. Although Air Asia just monopoly domestic route but it also
became strength to MAS. It is because through domestic route Air Asia
get more profit and successful in industry.
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5.0 CONCLUTION
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6.0 RECOMMENDATION
MAS had taken lot of alternative to solve their problem. MAS used turnaround
strategy to improve their management problem and get profit in their future. Our
group provides some recommendation that MAS can use to make their
management more efficient.
2. Team concept
MAS should create esprit among its cabin crew by divide the staff members
in small units. By flying together with their own team can make more
comfortable and the crew feel like they are part of a team. Flying together,
as a units, allows them to build a strong team work and the team leader will
get to know their strengths and weaknesses well. By this concept, MAS will
have good control to build the excellent management system.
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4. Prepaid System
In order for MAS to eliminate last minute cancellation, the prepaid system is
the best mechanism as customers, such as individual and especially groups
(from travel agents) do not “play around” with the loose MAS system.
Payment must be made 24hours upon departure. Cancellation of tickets 24
hours before departure should be given a penalty. In order to educate
customers to be prudent of their travel arrangement MAS need to be stern.
Flight missed by a customer should not be penalized by imposing fines but
instead automatically be null and forfeited.
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(2).
Abdullah Mat Zaid. Journal of Malaysia Airlines’ Corporate Vision and Service Quality
Strateg. Volume 4 Number 6 1994 pp. 11-15
B. K. Sidhu. (30 March 2006). System revamp to cost MAS RM400mil. New Straits
Times.
Daniel Chan. The story of Singapore Airlines and the Singapore. Girl Journal of
Management Development Volume 19 Number 6 2000 pp. 456-472.
Ionides, N. (April 2006). Malaysia turnaround bullet. Business Source Premier. Vol. 22
(4).
Ionides, N. ( Jul 2006). MAS takes radical steps to downsizes. Airlines Business. Vol.22
(7).
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Mohamed Ali Mirghani. (1996). Aircraft maintenance budgetary and costing systems at
the Saudi Arabian Airlines: Integration business approach. Journal of quality in
maintenance. Vol. 2. (4).
Ragnar Schierholz, et al. (2006). Journal of Mobile Systems for Customer Service
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Wheelen, T.L. and Hunger, J. D. (2004). Strategic Management and Business Policy. 9th
edition. Singapore: Prentice Hall.
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