MALAYSIAN AIRLINES ON THE GO ! ! !: February 2009

About Me!

I am Tanvir, a marketing final year and final semester student from MMU Melaka. I am originally from Bangladesh, a country which is surrounded by the rivers and has SIX significant and magnificient seasons which many people do not beleive. So I say people go and experiene it yourself, may be we are not famous but we will make your trip a memorable one with our heartiest hospitality.

As me, I am a simple guy with lots of dreams. I want to see all my near and dear ones as happy as ever. Unlike many other ambitious persons my dream is not to be an extraordinary person in my field of work, my dream is to be a good son, good father and ofcourse a wonderful husband. I want to make everyone smile around me and morepver I want my family to love me like crazy as I love them all in a same way. I have a wonderful bunch of friends who stand by my side whenever I need them. I love my university as it gave me a lot of things to be proud about. I love watching movies, some of my favourites are A walk to remember, King Arthur, Dark knight, The constant gardener, Sweet home Alabama and many more. I prefer romantic and comedy rather than full throttle meaningless action. I also love music, movies, reading novels, traveling, eating, sleeping...actually I love living life to the fullest, so I find interest in most of the good and fun brewing things.

History of MAS

Malaysia Airlines (MAS)

(Malay: Sistem Penerbangan Malaysia; Chinese: MYX: 3786) is the flag carrier of Malaysia. Malaysia Airlines operates flights from its home base, Kuala Lumpur International Airport, and its secondary hub in Kota Kinabalu. Despite a financial restructuring exercise in 2006, Malaysia Airlines maintains a strong presence in Southeast Asia, East Asia, South Asia, Middle East and on the Kangaroo Route between Europe and Australasia. Malaysia Airlines also operatestransatlantic flights from Kuala Lumpur to Newark, via Stockholm, and transpacific flights from Kuala Lumpur to Los Angeles, viaTaipei. In 1997, the airline flew the world's longest non-commercial, non-stop flight from Boeing Field in Seattle to Kuala Lumpur, flying eastward passing the European and African continents and breaking the Great Circle Distance Without Landing record for an airliner on a Boeing 777-200ER longer than the record held by the Boeing 777-200LR.

Malaysia Airlines non-aeronautical revenue sources include maintenance, repair and overhaul (MRO), and aircraft handling. Malaysia Airlines has two airline subsidiaries: Firefly and MASWings. Firefly operates scheduled flights from its home base Penang International Airport which focus on tertiary cities, while MASWings focuses on inter-Borneo flights. Malaysia Airlines has a freighter fleet operated by MASKargo, which manages freighter flights and aircraft cargo-hold capacity for all Malaysia Airlines' passenger flights. MASCharter is another subsidiary of Malaysia Airlines, operating charter flights using Malaysia Airlines' passenger jets. After recovering from past losses, Malaysia Airlines is keen on merger and acquisition (M&A) activities: particularly airlines in the Asia Pacific region. Malaysia Airlines was ranked second with score 88 in Aviation Week's Top Performing Companies which accurately measures financial viability of an airline.

Since its inception in 1963, after Malayan Airways was separated into two parts, Malaysia Airlines has built up a strong brand name in the aviation industry for service and safety, coupled with numerous awards from international bodies such as Skytrax. Malaysia Airlines is accredited by International Air Transport Association with IOSA (IATA Operational Safety Audit) for its operational safety practices.

It is one of only six airlines to be given a 5-star status airline by Skytrax (the other 5 are Asiana Airlines from South Korea, Cathay Pacific from Hong Kong, Qatar Airways from Qatar, Singapore Airlines from Singapore and Kingfisher Airlines from India). Malaysia Airlines is also listed among Skytrax's Quality Approved Airlines, alongside fellow 5-star carriers Asiana Airlines, Kingfisher Airlines and Qatar Airways

Malaysia Airlines has started its operation on 1987 after the airline changed its name from Malaysian Airline System. It is founded on 1947 by Malayan Airways. Then it transform to Malaysian Airways due to Malaysian independence. After that it changes the name to Malaysia-Singapore Airlines and ceased its operation. After it ceased, it became operational and just being divide to Malaysian Airline System and Singapore Airlines which is being operational currently.

On 12 October 1937, the Liverpool-based Singaporean Steamshipping Company and Imperial Airways proposed to the colonial governments in Penangand Singapore a scheduled flight service between the two cities. Malayan Airways Limited (MAL) was founded, but the first paying passengers could be welcomed on board a plane only 10 years later, on 2 February 1947. The airline's first flight was a charter flight from the British Straits Settlement ofSingapore to Kuala Lumpur, on 2 April 1947, using an Airspeed Consul twin-engined aircraft.[8] This inaugural flight, with only five passengers, was bound for Kuala Lumpur instead of Penang. Weekly scheduled flights quickly followed from Singapore to Kuala Lumpur, Ipoh and Penang from 1 May 1947 with the same aircraft type.[9] The airline continued to expand during the rest of the 1940s and 1950s, as other British Commonwealth airlines (such as BOAC and Qantas Empire Airways) provided technical assistance, as well as assistance in joining IATA. By 1955, Malayan Airways' fleet had grown to include a large number of Douglas DC-3s, and went public in 1957. Other aircraft operated in the first two decades included the Douglas DC-4 Skymaster, the Vickers Viscount, the Lockheed L-1049 Super Constellation, the Bristol Britannia, the De Havilland Comet 4 and the Fokker F27. Over the next few years, the airline expanded rapidly, boosted by post-war air travel demand when flying became more than a privilege for the rich and famous. By 12 April 1960, the airline was operating Douglas DC-3s, Super Constellations and Viscounts on new routes from Singapore to Hong Kong, and from Kuala Lumpur to Bangkok via Penang. Flights were also introduced from Singapore to cities in the Borneo Territories, including Brunei, Jesselton (now Kota Kinabalu), Kuching,Sandakan and Sibu.

In 1957, the airline became a state-run stock corporation. With the delivery of an 84-seat Bristol Britannia in 1960, the airline launched its first long-haul international flight, to Hong Kong. When Malaya, Singapore, Sabah and Sarawak formed the Federation of Malaysia in 1963, the airline's name was changed, from "Malayan Airways" to "Malaysian Airlines" (though still abbreviated to MAS). MAS also took over Borneo Airways. In 1966, following Singapore's separation from the federation, the airline's name was changed again, to Malaysia-Singapore Airlines (MSA). The next year saw a rapid expansion in the airline's fleet and routes, including the purchase of MSA's first Boeing aircraft: the Boeing 707s, as well as completion of a new high-rise headquarters in Singapore. Boeing 737s were added to the fleet soon afterward.

The differing needs of the two shareholders, however, led to the break-up of the airline just 6 years later. The Singapore government preferred to develop the airline's international routes, while the Malaysian government had no choice but to develop the domestic network first before going regional and eventually international. MSA ceased operations in 1972, with its assets split between two new airlines; Malaysian Airline System (MAS)(now Malaysia Airlines), and Singapore Airlines.

With the Singapore government determined to develop Singapore Airlines' international routes, it took the entire fleet of seven Boeing 707s and fiveBoeing 737s, which would allow it to continue servicing its regional and long-haul international routes. Since most of MSA's international routes were flown out of Singapore, the majority of international routes were in the hands of Singapore Airlines. In addition, MSA's headquarters, which was located in Singapore, became the headquarters of Singapore Airlines.

The initials MSA were well regarded as an airline icon, and both carriers tried to use them. Malaysian went for MAS by just transposing the last two letters and choosing the name Malaysian Airline System, while Singapore originally proposed the name Mercury Singapore Airlines to keep the MSA initials, but changed its mind and went for SIA instead. Acronyms for airline names later became less fashionable, and both carriers then moved on to their descriptive names.

Malaysian Airline System took all domestic routes within Malaysia and international routes out of that country, as well as the remaining fleet of Fokker F27's. It began flights on 1 October 1972. Soon after that, Malaysia Airline System rapidly expanded its services, including introducing long-haul flights from Kuala Lumpur to London.

In the same year, MAS operated flights to more than 34 regional destinations and six international services. In 1976, after receiving its DC-10-30 aircraft, MAS scheduled flights reached Europe, with initial services from Kuala Lumpur to Amsterdam, Paris and Frankfurt.

An economic boom in Malaysia during the 1980s helped spur growth at Malaysia Airlines. By the end of the decade, MAS was flying to 47 overseas destinations, including eight European destinations, seven Oceania destinations, and the United States destinations of Los Angeles and Honolulu. In 1993, Malaysia Airlines reached South America when the airline received its B747 aircraft. When Malaysia Airlines introduced its service from Kuala Lumpur to South America, MAS became the first and only airline in Southeast Asia to serve South America via its flights to Buenos Aires, Argentina. Services extended to Central America when Malaysia Airlines began flying to Mexico City in the 1980s, which route was terminated in the 1990s.

Prior to the Asian Financial Crisis in 1997, the airline suffered losses of as much as RM 260 million after earning a record-breaking RM319 million profit in the financial year 1996/1997. The airline then introduced measures to bring its P&L back into the black. For the financial year 1999/2000, the airline cut its losses from RM700 million in the year 1998/1999 to RM259 million. However, the airline plunged into further losses in the following year, amounting to RM417 million in FY2000/2001 and RM836 million in FY2001/2002. With these losses, the airline cut many unprofitable routes, such as Brussels, Darwin, Honolulu, Madrid, Munich and Vancouver.
The airline recovered from its losses in the year 2002/2003. It achieved its then-highest profit in the year 2003/2004, totaling RM461 million.

In the year 2005, Malaysia Airlines reported a loss of RM1.3 billion. Revenue for the financial period was up by 10.3% or RM826.9 million, compared to the same period for 2004, driven by a 10.2% growth in passenger traffic. International passenger revenue increased by RM457.6 million or 8.4%, to RM5.9 billion, while cargo revenue decreased by RM64.1 million or 4.2%, to RM1.5 billion. Costs increased by 28.8% or RM2.3 billion, amounting to a total of RM 10.3 billion, primarily due to escalating fuel prices. Other cost increases included staff costs, handling and landing fees, aircraft maintenance and overhaul charges, Widespread Assets Unbundling (WAU) charges and leases.

The Government of Malaysia appointed Idris Jala as the new CEO on 1 December 2005, to execute changes in operations and corporate culture. Several weaknesses in airline operations were identified as the causes of the RM1.3 billion loss. These included esclating fuel prices, increased maintenance and repair costs, staff costs, low yield per available seat kilometer ("ASK") via poor yield management and an inefficient route network. Under the leadership of Idris Jala, Malaysia Airlines launched its Business Turnaround Plan in 2006, developed using the Malaysian Government'sGovernment-linked company (GLC) Transformation Manual as a guide.
The most substantial factor in the losses was fuel costs. For the period, the total fuel cost was RM3.5 billion, representing a 40.4% increase compared to the same period in 2004. Total fuel cost increases comprised RM977.8 million due to higher fuel prices and another RM157.6 million due to additional consumption. In the third quarter, fuel costs were RM1.26 billion, compared to the RM1.01 billion in the corresponding period in 2004, resulting in a 24.6% increase or RM249.3 million.

Another factor for the losses was high operating costs. MAS substantially lagged its peers on yield. Some of this gap is due to differences in traffic mix,(less business traffic to and from Malaysia than to and from Singapore), but much of it was due to weaknesses in pricing and revenue management, sales and distribution, brand presence in foreign markets, and alliance base. Malaysia Airlines has one of the lowest labor costs per ASK at USD0.41, compared to other airlines such as Cathay Pacific and Singapore Airlines at USD0.59 and USD0.60 respectively. However, despite its low labor cost, the ratio of ASK revenue (millions) to this cost was, at 2.8, much lower than Singapore Airlines, where the ratio is 5.0, and slightly higher than Thai International Airways
There are other factors listed in the Business Turnaround Plan of Malaysia Airlines, all leading to the net loss of RM1.3 billion in the year 2005.

Under the various initiatives, launched together with the Business Turnaround Plan, Malaysia Airlines turned losses into profits between FY2006 and FY2007. When the Business Turnaround Plan came to an end, the airline posted a record profit of 851 million Ringgit (265 million dollars) in 2007, ending a series of losses since 2005. The result exceeded the target of RM300 Million by 184%.
Among the initiatives that turned losses back into profit, route rationalizing was one of the major contributors. Malaysia Airlines pared its domestic routes from 114 to 22, and also canceled virtually all unprofitable international routes (such as Kuala Lumpur-Manchester, that required a 140% load factor to break even). Apart from that, Malaysia Airlines also rescheduled all of its flight timings and changed its operations model from point to pointservices to hub and spoke services.

Additionally, the airline started Project Omega and Project Alpha to improve the company's network and revenue management. Emphasis has been placed on six areas: pricing, revenue management, network scheduling, opening storefronts, low season strategy and distribution management.
Malaysia Airlines has been involved in discussions for new aircraft purchases, using its cash surplus of 5.3 billion Ringgit to eventually purchase 55 narrow-body aircraft and 55 wide-body aircraft.

Malaysia Airlines took an unprecedented move with its “Everyday Low Fares” (ELF) programme on May 6, 2008 which offers 1.3 million RM 0 for all domestic routes operated by Malaysia Airlines and Firefly. According to the managing director of Malaysia Airlines, Datuk Seri Idris Jala the Everyday Low Fares programme will create new demand for people who do not fly with Malaysia Airlines.
The Everyday Low Fares programme offers a maximum of 30% of the total seats on every flight which are unsold due to the average load factor of 70% on each flight. Thus, Malaysia Airlines is generating income for the airline through fuel surcharge, administrative fee and airport tax. By May 14, 2008, Malaysia Airlines has sold more than 150,000 seats since the launch of the programme and 50,000 tickets has been sold in the first two days. Malaysia Airlines is also extending the programme to all Asean routes operated by Malaysia Airlines.
However, the Everyday Low Fares programme launched by Malaysia Airlines has been strongly opposed by Asia's largest low cost carrier, AirAsia which claims that Malaysia Airlines is competing directly with AirAsia's business model but at the same time not allowing the budget carrier to compete against the national airline.

Malaysia Airlines is listed on the stock exchange of Bursa Malaysia under the name Malaysian Airline System Berhad (MYX: 3786). The airline suffered high losses over the years due to poor management and fuel price increases. As a result of financial restructuring (Widespread Asset Unbundling) in 2002, led by BinaFikir, Penerbangan Malaysia Berhad became its parent company, incorporated in 2002, in exchange for assuming the airline's long-term liabilities. On the operational side, the Government of Malaysia appointed Idris Jala as the new CEO on 1 December 2005, to execute changes in operations and corporate culture. Under his leadership, Malaysia Airlines unveiled its Business Turnaround Plan (BTP) in February, 2006, which highlighted low yield, an inefficient network and low productivity (overstaffing). The airline headquarters building in downtown Kuala Lumpur was sold. The new corporate headquarters is now at Sultan Abdul Aziz Shah Airport in Subang, Petaling.

Malaysia Airlines Boeing 777 flight MH138 docked at Adelaide Airport awaiting departure

Following the Widespread Asset Unbundling (WAU) restructuring of Malaysia Airlines, Malaysian Government investment arm and holding company,Khazanah Nasional's subsidiary, Penerbangan Malaysia Berhad [21] is the majority shareholder with a 52.0% stake. After Penerbangan Malaysia Berhad, the second-largest shareholder is Khazanah Nasional, which holds 17.33% of the shares. Minority shareholders include Employees Provident Fund Board (10.72%), Amanah Raya Nominees (Tempatan) Sdn Bhd (5.69%), State Financial Secretary Sarawak (2.71%), foreign shareholders (5.13%) and Warisan Harta Sabah (2.4%). It has 19,546 employees (as of March, 2007). Malaysia Government has been reporting that the government's holding company, Khazanah Nasional is keen on selling shares of Malaysia Airlines to remain globally competitive in an industry which is fast-consolidating.

Malaysia Airlines has diversified in to related industries and sectors, including aircraft ground handling, aircraft leasing, aviation engineering, air catering, and tour operator operations. It has also restructured itself by spinning-off operational units as fully-owned subsidiaries, to maintain its core business as a passenger airline. Malaysia Airlines has over 20 subsidiaries, with 13 of them fully owned by Malaysia Airlines.

The evolution of MAS logo, part-II...

7:50 PM / Posted by Socialist Inc. / comments (1)

Good day to all my blog readers. In this blog of mine I am going to continue talking about the logo evolution of Malaysian Airlines. In my previous blog I talked about three logos that Malaysian Airlines used before they got to this point where they designed a whole new logo to express their promises to their customers.

The new corporate logo of Malaysian Airlines was designed by Mara Institute of Technology (Malay: Institut Teknologi Mara) later known as Mara University of Technology (Malay: Universiti Teknologi Mara) was introduced on 15th of October 1987, retaining the essence of the moon kite, with a sheared swept-back look. Along with the new corporate logo, a new type style - MALAYSIA, was created. It is italicized to slant parallel with the logo to accentuate speed as well as direction. Within this corporate type style, the letters MAS bear red clippings to denote the initials of the statutory name of the airline, Malaysian Airline System (MAS), and were added after the original design was rejected by former Prime Minister Tun Dr. Mahathir. The introduction of blue to the original red logo has national significance. The red and blue divides equally in the middle to denote the equilibrium the Airline company i desired to express. And this is how the company got the latest logo which is existing till recent dates. In my previous blog I put black and white pictures of the logos, but in this blog I put coloured logo pictures to fulfill my discussion on the Malaysian Airlines logo with a clearer picture of the logo evolution. I know it is a bit small but it emphasizes on the colours and that is my focus here as black and white can not show a lot of things.

What I wanted to focus on my last two blogs is that along with the small and medium service companies, big airlines company like Malaysian Airlines has also focused on consumers' perception rather than stressing themselves out by expressing their strength like they did before with the winged tiger logo. Customers like to see the reflection of promised care and nurture by the companies even in the companies' logos, I know this because I am also a customer of the airlines industry. The companies are also understanding the standings of the customers and restructuring their marketing efforts according to that understanding. In my upcoming blogs I am going to focus on the other marketing efforts of this airline company and my personal feedback on them. Stay tuned to be up-blog-dated!

The evolution of MAS logo, part-I...

1:32 PM / Posted by Socialist Inc. / comments (1)

Hello everyone! I am back with my blog about Malaysian Airlines. As a member of the marketing students of MMU, I did a brief research on this airlines's historical efforts on marketing. A logo is a very big aspect of any company. If it is a logo of a big airline company like this then a lot of effort should be put in it. I myself find Malaysian Airlines logo very mild and inviting. But it is a result of a long series of evolution of logo designing by Malaysian Airlines. I would like to talk very briefly about the history of this evolution in my next two blog.

The history of the airline started in 1937, when Malayan Airways Limited was registered as a company. Flying operations started in 1947, with the aircraft bearing the symbol of a Winged Tiger. In 1963, the airline was renamed Malaysian Airways Limited, when the Federation of Malaysia was formed.

Subsequently, Borneo Airways Limited was absorbed by Malaysian Airways Limited. In 1965, with the political separation of Singapore from Malaysia, there was continued participation by the governments of Malaysia and Singapore in the airline. In 1967, the company changed its name to Malaysia-Singapore Airline Limited (MSA), which was the joint national air carrier for both countries, and a new logo was introduced.

In 1971, Malaysia-Singapore Airline Limited was separated into two airlines, each with its own policies and objectives, leading to the birth of Malaysia's flag carrier, Malaysian Airline System (MAS), on 3 April 1971. The name was chosen because, in abbreviated form, MAS (as in EMAS) in Malay means gold, to symbolize quality service.

In my next blog I will talk about the last edition in the evolution process in the logo design of Malaysian Airlines. Till then have a nice week folks!

The happening of something that never happened before!

9:23 PM / Posted by Socialist Inc. / comments (5)

Hi all, this is Tanvir. I am a proud and male student of Multimedia University studying Bachelor of Business Administration majoring in Marketing Management. This is the first time I am writing my thoughts in words for public viewing as I never wrote any blog in my whole life, so I was kinda nervous at first about how to connect my thoughts with others through this blog. But then I realized we are all from the same planet, so it will not be that bad as I think I can connect my thoughts with others in some level. Therefore, here I am! Making something happen which has never ever happened before.

I chose Malaysian airlines as my subject of research for this blog for many reasons. First of all, in my two years of study I have never done any assignments about any of the airline company, so I wanted to do it this time. Secondly, the airline industry has become more competitive from the last two years and it is very interesting to see how they approach with their newer strategies to fly every time with maximum passengers in their aircrafts. Finally, as a traveler I keep on searching for the best offers time to time to limit my expenditure on the flight fare which is always a big one for international students like us; and personally, I have travelled most of the time with Malaysian airlines, so I want to talk about this airlines rather than any other in this blog.

My page is kinda boring now without any graphical works on it, but I promise I will be back in no time with eye catching design and mind blowing discussions. Till then ciao folks!

Labels: The beginning; 18th February 2009.

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The evolution of MAS logo, part-II...

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The happening of something that never happened before!

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