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    Malaysia Airlines PPM Assignment 1

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    ankitajspl
    The curious case of Malaysian airlines.. Despite multiple restructurings what went wrong with the airlines..

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    Malaysia Airlines PPM Assignment 1

    Uploaded by

    ankitajspl
    200 views11 pages
    The curious case of Malaysian airlines.. Despite multiple restructurings what went wrong with the airlines..

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    The curious case of Malaysian airlines.. Despite multiple restructurings what went wrong with the airlines..

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    200 views11 pages

    Malaysia Airlines PPM Assignment 1

    Uploaded by

    ankitajspl
    The curious case of Malaysian airlines.. Despite multiple restructurings what went wrong with the airlines..

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    You are on page 1of 11

    Malaysia Airlines

    Route Rationalization How this turned the business around a third time
    Ankita Dash 12DM -026 Mayank Singh 12DM-084 Mithila Kanugo -12DM-088 Vishal Godara 12DM-127

    INTRODUCTION - I
    Flag carrier of Malaysia
    Commenced operations as Malayan Airways Limited (MAL) in 1937 when Liverpool

    based Ocean Steamship Company partnered with the Straits Steamship Company and
    Imperial Airways.

    Went public in 1955.

    Changed name to Malaysian Airlines in 1963 when

    Malaya, Singapore, Sabah and Sarawak formed the Federation of Malaysia.

    Changed names again to Malaysia Airlines in 1972 due to political issues with Kuala

    Lumpur and Singapore.

    First period of unprofitability in 1997 due to the Asian Financial Crisis. Reported losses

    of of as much as RM 260 million after earning a record-breaking RM319 million profit in


    the financial year 1996/1997.

    Result : Business Turnaround Plan 1 was implemented .

    INTRODUCTION - II
    Second period of unprofitability in 2005 primarily due to escalating fuel

    costs.

    Result: Dato' Sri Idris Jala appointed as the CEO of Malaysia Airlines by

    the Govt. of Malaysia.

    The second Business Turnaround Plan was rolled out.

    What is BTP2?
    A continuation of BTP1 Business Turnaround Plan 1.
    Called Transformation . Goal was to transform MAS into the worlds Five Star Value Carrier (FSVC).
    Requirement of turnaround plan was to get results fast!
    RRPK Revenue per Revenue Passenger Kilometer
    RASK -Revenue per Available Seat Kilometer

    Source : http://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/corporate-info/Business%20Transformation%20Plan%20(BTP%202).pdf

    Premium Segment - MAS under pressure from


    full service carriers (FSCs)
    FSCs have first class products, new and modern
    aircraft and more routes.
    Low Cost Carrier (LCC) Segment competition on
    fares.
    Hence challenge for MAS to reinvent itself.
    Source : http://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/corporate-info/Business%20Transformation%20Plan%20(BTP%202).pdf

    MAS implemented a hub and


    spoke strategy t increase the
    feeder traffic onto the trunk lines.

    Source : http://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/corporate-info/Business%20Transformation%20Plan%20(BTP%202).pdf

    The story today:


    After the success of the BTP 2, Malaysia Airlines found itself in the grips of yet another
    downturn, the worst they have experienced till date.

    In 2012, MAS posted a meagre profit as compared to their expectations. (USD 16 Mil)
    The culprit was the rising fuel prices coupled with inefficiency creeping into the routing
    system.

    MAS found themselves operating at the costs associated with a Full Service Carrier (FSC)
    even though their revenues were those of an LCC.
    The high competition from Air Asia , Emirates and Singapore Airlines did not help
    matters.
    In addition , the competition intensified when Lion Air Groups affiliate Malindo was
    launched in March 2013. They have since encroached on the LCCs domestic market in
    Malaysia.

    Source : MAS

    These figures highlight the start of the downturn

    The Way Forward:


    MAS should increase their Asia focus as these markets are experiencing tremendous growth and are more profitable.
    The APAC (Asia Pacific region) is currently leading in terms of adding high net worth individuals.
    Selective route optimization required for Europe. The unprofitable routes should be phased out.
    Existing fuel inefficient carries should be phased out in preference to newer fuel efficient versions of Boeing 737-800
    and Airbus A330s.
    Routes in Africa and Argentina which are unprofitable should be cut.
    Focus should be on new premium carriers to focus on international destinations within South -East Asia.

    Source: MAS

    THANK YOU!

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