MALAYSIAN AIRLINES ON THE GO ! ! !

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.

This blog will talk about Malaysian Airlines in terms of its marketing efforts and the analysis will be from my own perception and experience...it will have some interesting facts about the company that most people do not really know...the blog will be enclosed with my own experience from the journey with MAS...enjoy...!!!

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 May1947 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.