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Malaysia Airlines In Malaysia, there are actually 3 different Malaysia airlines companies which are providing airline services to its customers. These 3 airline companies are Malaysia Airline, Air-Asia and Berjaya-Air. In reality, these 3 different airline companies provide different kind of services for their customers with different needs. For now, let’s take a closer look at these 3 companies individually.
First of all, Malaysia Airline System or better known as MAS, is Malaysia’s premium airline service with a fleet of 111 aircrafts in its network covering more than 100 destinations across 6 continents. Malaysia Airline is actually very renowned around the world, this is due to the reason where Malaysia Airline has been voted and awarded for the Best Cabin Staff for 4 consecutive years from year 2001 until year 2004. Despite the fact where Malaysia Airline does provides domestic and international flight services, majority of the customers of Malaysia Airline are international flight customers.
There are actually a few reasons why most people choose other airline services when flying domestic and one of the main reason is because the cost of the domestic flight for Malaysia Airline is relatively more expensive compared to Air-Asia or Berjaya-Air. Although flying with the other 2 airline company is cheaper but less comfortable, most of the people still opt to choose the 2 latter companies is because most of the domestic flight in Malaysia are short distanced flight (less time spent on airplane).
However, when it comes to international flight, Malaysia Airline is always the first choice for most of the people simply because Malaysia Airline is one of the world’s best and most comfortable airline services. When it comes to domestic flight, the first company most people in Malaysia would think of is Air-Asia and not Malaysia Airline System. Air-Asia is actually established on year 2001 when Tune Air Private Limited takes over Air-Asia from DRB-Hicom. As of year 2004, Air-Asia now has 18 aircraft flying across Malaysia and few other neighboring countries such as Indonesia, Thailand, China, Philippines and Singapore.
Actually, many believe that the main customers of Air-Asia are people who are taking domestic flights. This is because compared to Malaysia Airline, Air-Asia offers very cheap ticket price for domestic and as well as international flights. Therefore, most of the people traveling with Air-Asia are budgeted travelers like students returning home or backpackers going backpacking in neighboring countries. Due to the reason where Air-Asia is considered as a young company, there are times where some problems may occur within Air-Asia such as delays in flights due to improper scheduling.
However, despite of the above reason, people still choose to fly with Air-Asia because of the cheap air fare where no other airline companies can offer within Malaysia. Lastly, the 3rd airline company in Malaysia is Berjaya-Air. Just as the name of the airline suggest, this airline company is fully owned by the Berjaya Group, a diversified conglomerate public limited company in Malaysia. Berjaya-Air operates the DeHavilland Dash 7 aircraft where this aircraft is designed specifically for destinations with short airstrips.
Because of this reason, most of the flight destinations in Berjaya-Air are to different island in Malaysia, such as Pangkor Island and Tioman Island although occasionally, Berjaya-Air still flies to places like Singapore. Therefore, Berjaya-Air is the first option in most of the cases where the customer needs to fly to Tioman or Pangkor Island. Actually, due to the reason where all these 3 companies have different targeted customers, these 3 airline companies in Malaysia can co-exist with each other without eating over each other’s profit margin.
Fortunately, because of this reason, the people in traveling around within or outside Malaysia now have more choices to choose from compared to the good old days. In these 3 airline companies, we choose Malaysia Airline System as our group project. In our group report, we touch on background of the company, internal and external analysis, generate strategies, choose strategies and recommend strategies for the company. In internal analysis part, we are looking for strengths and weaknesses of the company but in external analysis part, we are looking for threats and opportunities of the company.
For external analysis part, we spread to 2 parts which are general environment and industry or task environment. Then based on internal and external analysis, we generate strategies for the company which include strengths, weaknesses, opportunities, threats, strengths and opportunities’ strategies, strengths and threats’ strategies, weaknesses and opportunities’ strategies and weaknesses and threats’ strategies. Then based on generated strategies, we choose strategies. Basic for us choosing strategies based on vision, mission, resources and synergies.
After that, we will give recommend strategies for the company and the last one we will make conclusion for whole the report. 2. 0 BACKGROUND OF MALAYSIA AIRLINES SYSTEM Malaysia Airlines (MAS) (Malay: Sistem Penerbangan Malaysia; Chinese: ???????? ; MYX: 3786) is the flag carrier of Malaysia. Malaysia Airlines started its operation on 1987 after the airline changed its name from Malaysian Airline System. It is founded in 1947 by Malayan Airways. Then, it transformed to Malaysian Airways due to Malaysia gaining its independence. After that, it changes its name once more to Malaysia-Singapore Airlines and thereafter ceased its operation.
It was then divided into Malaysia Airlines and Singapore Airlines. 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 operates transatlantic flights from Kuala Lumpur to Newark, via Stockholm, and transpacific flights from Kuala Lumpur to Los Angeles, via Taipei.
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. 2. 1 SHAREHOLDERS INFORMATION 2. 2 GROUP STRUCTURE ; INVESTMENT IN ASSOCIATION % Ownership| | Companies| | 100%| | Malaysia Airlines Cargo Sdn Bhd
MAS Aerotechnologies Sdn Bhd Syarikat Pengangkutan Senai Sdn Bhd MAS Golden Boutiques Sdn Bhd MAS Golden Holidays Sdn Bhd MASkargo Logistics Sdn Bhd MAS Academy Sdn Bhd FlyFirefly Sdn Bhd (formerly known as Kelas Services Sdn Bhd) Malaysia Airlines Capital (L) Limited Macnet CCN (M) Sdn Bhd Malaysian Aerospace Engineering Sdn Bhd MASWings Sdn Bhd FlyFirefly Holiday Sdn Bhd (subsidiary of FlyFirefly Sdn Bhd)| | 80. 0%| | Abacus Distribution Systems (Malaysia) Sdn Bhd| | 60. 0%| | MAS Catering (Sarawak) Sdn Bhd| | 51. 0%| | Aerokleen Services Sdn Bhd| 49. 0 %| | Aerofine Meat Sdn Bhd| | Investment in Associates % Ownership | | Companies| | 30%| | Honeywell Aerospace Services (M) Sdn Bhd GE Engine Services Malaysia Sdn Bhd LSG Sky Chefs – Brahim’s Sdn Bhd (Formerly known as MAS Catering Sdn Bhd)| | 49%| | Hamilton Sundstrand Customer Support Centre (M) Sdn Bhd| | 23. 53%| | Pan Asia Pacific Aviation Services Limited| | 20%| | Taj Madras Flight Kitchen Limited| | 2. 3 BOARD OF DIRECTORS Non-Independent Non-Executive Chairman TAN SRI DR. MOHD. MUNIR BIN ABDUL MAJID Tan Sri Dr. Mohd.
Munir bin Abdul Majid is Chairman of MALAYSIA AIRLINES. He also sits on the Board of Saujana Resorts (M) Berhad. He obtained a B. Sc(Econ) from the London School of Economics and Political Science (LSE) in 1971. Here he also obtained his Ph. D in International Relations in 1978. He taught at the Department of International Relations in LSE from 1972-1975. He was research analyst for Daiwa Europe NV in London from 1975-1978. Tan Sri Dr. Mohd. Munir joined the New Straits Times Press (NST) in 1979 as leader writer and progressed to become Group Editor.
During his time at the NST, he published numerous articles on national and International politics and economics. He left NST in 1986 to become CEO of a small merchant bank, Pertanian Baring Sanwa (PBS), whose name he changed to Commerce International Merchant Bankers Berhad (CIMB) which was then transformed into one of Malaysia’s leading merchant banks. He was invited by the Government of Malaysia to establish and become the first and founding Executive Chairman of the Securities Commission in 1993, where he served for two terms until 1999.
In 1997, he received the Cranfield Management Excellence award. After leaving the Securities Commission, he served as Senior Independent Non-Executive Director of Telekom Malaysia Berhad for 4 years until June 2004, and was Chairman of its mobile subsidiary Celcom (M) Berhad from 2002-2004. In June 2004, Dr. Mohd. Munir joined the Malaysian Airline System Berhad Board of Directors and later in August 2004 was appointed as Non-Executive Chairman of Malaysian Airline System Berhad.
He has served on various governmental boards and committees, such as Malaysian Industrial Development Authority (MIDA), Bursa Malaysia Securities Berhad (formerly known as The Kuala Lumpur Stock Exchange), Foreign Investment Committee (FIC), as well as various private sector companies and organizations such as Kuala Lumpur Options and Financial Futures Exchange (KLOFFE), Council of the Association of Merchant Malaysia (AMM), Malaysian International Chamber of Commerce and Industry (MICCI).
He is the founder President of the Kuala Lumpur Business Club and recently was appointed by the Malaysian Institute of Management to be a member of its Court of Fellows. Tan Sri Dr. Mohd Munir presently also occasionally lectures for the Toronto Centre for Leadership in Financial Market Regulation where he sits on the Advisory Board for Securities Market Regulation. He is a member of the International Institute for Strategic Studies (IISS) in London. He also writes a weekly column for the New Sunday Times and hosts a TV programme, Fast Forward, on Radio Television Malaysia (RTM)1.
Born in Penang in 1948, Dr. Mohd. Munir received his early education at St Mark’s Primary School in Butterworth and the Bukit Mertajam High School. He received his upper secondary education at the Royal Military College in Sungei Besi near Kuala Lumpur where he was awarded the Commandant’s Prize for being the best all-round student in 1967. He left for London the next year. Married with three children, his hobbies are: reading (novels, history and biographies), theatre, music (classical and opera), swimming, golf and, now mostly passively but still with some fanaticism, soccer, tennis and cricket.
Independent Non-Executive Deputy Chairman DATO’ N. SADASIVAN A/L N. N. PILLAY Dato’ N. Sadasivan a/l N. N. Pillay graduated in 1963 with a Bachelor of Arts (Hons. ) in Economics from University of Malaya, Malaysia. He began his career with the Economic Development Board, Singapore as Economist/Chief, Industrial Facilities Division in 1963. From 1968 to 1995, he was attached to Malaysian Industrial Development Authority (MIDA) where he held various management positions from Director of Division to Deputy Director – General before being promoted to the position of Director – General in 1984.
Upon retirement in 1995, he set up his own consultancy firm, SKA Management Consultants Sdn. Bhd. Non-Independent Managing Director/Chief Executive Officer DATO’ SRI IDRIS JALA Idris Jala was appointed Managing Director and CEO of Malaysia Airlines in December 2005, in the aftermath of the company’s biggest financial loss in its corporate history. In February 2006, Idris announced the airline’s Business Turnaround Plan (BTP 1). From a 9-month loss of USD400 million in 2005, Idris succeeded in turning around the company in less than 2 years, with the airline achieving a record profit of USD260 million in 2007.
Building upon its successful BTP 1, Idris announced Malaysia Airlines’ 5-year Business Transformation Plan (BTP 2) in January 2008. The BTP 2 features bold profit targets of up to USD630-USD950 million per annum by 2012. Under BTP 2, Malaysia Airlines aspires to achieve its profit targets by transforming into the World’s Five Star Value Carrier, while offering 5-Star products and services at affordable prices. Prior to joining Malaysia Airlines, Idris spent 23 years at Shell. Between 2002 and 2005, Idris was the Managing Director, Shell MDS (Malaysia) and Vice President, Shell Malaysia Gas & Power (Malaysia).
Idris successfully led the business turnaround of Shell MDS, the first Gas-to-Liquids commercial plant in the world and also the sole supplier of clean diesel fuel for the 2004 Olympics in Athens. Between 2000 and 2002, Idris held the position of Vice President, Retail Marketing, Shell International, based out of London. He was also Vice President, Business Development Consultancy where he led a team of top notch internal consultants on radical business improvement projects, and revamped the Shell global retail business model in order to achieve profitable growth.
Between 1998 and 2000, Idris was the Managing Director of Shell Sri Lanka, where he helped to shape the turnaround of Shell’s LPG business in Sri Lanka. Idris also actively participates in industry related activities. He sits on the Board of Tourism Malaysia which is responsible for the strategic planning and development of the local tourism industry. In 2006, Idris was appointed as a member of the IATA Board of Governors which oversees the strategic issues and developments impacting the global aviation industry.
In addition, in 2007 Idris was appointed as Adjunct Professor, University of Technology Malaysia (UTM) where he regularly lectures undergraduates and graduates specialising in business and management studies. In view of Idris’ contribution towards nation building, he has received a number of national awards and titles, namely the prestigious national award from the King which carries the title “Datuk”, the state award from the Governor of Sarawak which carries the title “Datuk” and also the state award from the Sultan of Pahang which carries the title “Datuk Seri”.
Idris holds a Bachelor’s degree from Universiti Sains Malaysia and a Masters degree from Warwick University, United Kingdom. Non-Independent Executive Director/Chief Financial Officer TENGKU DATO’ AZMIL ZAHRUDDIN BIN RAJA ABDUL AZIZ He was appointed to MAS Board on 23 August 2004, then as Executive Director on 23 August 2005 and later as Executive Director/CFO on 1 February, 2006. He was the Managing Director/ Chief Financial Officer of Penerbangan Malaysia Berhad (PMB) prior to that.
Before PMB, he was with Pricewaterhousecoopers in their London and Hong Kong offices, where he was in the Audit and Business Advisory Services division, specialising in Banking and Capital Markets. While in Pricewaterhousecoopers, he was involved in a number of audit and advisory assignments involving risk management advisory, IPOs, structured transactions and derivatives products. He graduated from the University of Cambridge with double first class honours in Economics.
He is a Chartered Accountant and an associate members of the Malaysian Institute of Accountants and the Institute of Chartered Accountants in England and Wales and also an associate of the Association of Corporate Treasurers, United Kingdom. Independent Non-Executive Director KEONG CHOON KEAT Keong Choon Keat is a member of the Malaysian Institute of Accountants, the Malaysian Institute of Certified Public Accountants and is a Fellow Member of the Institute of Chartered Accountants in England and Wales. He was attached to Bristol Myers & Company Ltd. n Middlesex, England as an Internal Audit Manager in 1968 and left to join Malaysian Tobacco Company Bhd. as an Accountant in 1969. From 1974 to 1999, he was attached to UMW Holdings Group, where he held various management positions from General Manager to Director Group Accounts before being promoted to the position of Executive Director in 1988. Upon retirement in 1999, he joined a consultancy firm providing outplacement and career management consultancy services in Malaysia. Non-Independent Non-Executive Director DATO’ MOHAMED AZMAN BIN YAHYA
Dato’ Mohamed Azman Bin Yahya graduated with a First Class Honours Degree in Economics from the London School of Economics & Political Science of the University of London and is a member of the Malaysian Institute of Accountants and the Institute of Chartered Accountants in England and Wales and fellow of the Malaysian Institute of Banks. He is the founder and Group Chief Executive of Symphony House Berhad, a listed IT and corporate services group. He also serves as a member of the Securities Commission Capital Market Advisory Council and Malaysia Venture Capital Management Berhad. Independent Non-Executive Director
MARTIN GILBERT BARROW Martin Gilbert Barrow gained the Oxford and Cambridge Board Examination “A” levels in Science and Mathematics. He subsequently attended courses in Finance and Marketing. He joined Jardine Matheson, Hong Kong, in 1965. From 1975 to 1980, he was transferred to Japan as Managing Director of the Group’s operations in Japan. He was promoted to the position of President of Olayan Saudi Holding Company, the Group’s affiliate in Saudi Arabia from 1980 to 1983. He returned to Hong Kong as Regional Managing Director, Jardines’ operations in Hong Kong and China, in 1983 and was appointed a Director of Jardine Matheson Ltd. t the Group Head Office from 1989 to 2001. He was also active in public service and was Chairman of the Hong Kong Tourist Association from 1988 to 1996 and a member of the Aviation Advisory Board. He retired from Jardine Matheson in June, 2001. Independent Non-Executive Director DATUK SERI PANGLIMA MOHD. ANNUAR BIN ZAINI Datuk Seri Panglima Mohd. Annuar Bin Zaini graduated in 1977 with a Bachelor of Arts (Economics) Honours from the University Kebangsaan Malaysia. He later obtained a Master of Arts in Law ; Diplomacy from The Fletcher School of Laws ; Diplomacy Tufts University in 1991.
He began his career with the Ministry of Culture, Youth ; Sports as Assistant Director, Research ; Training in 1977 and later became Assistant Director, Psychological Operations ; Warfare activities with the National Security Council Prime Minister’s Department in 1980. In 1981, he joined the Ministry of Home Affairs as the Senior Private Secretary to the Minister and later served as the Principal Assistant Secretary (Documentation) with the Ministry of Energy, Telecom & Post. He was then appointed as the Principal Assistant Secretary (Arm Forces Council), Ministry of Defence in 1986.
In 1987, he was appointed as Principal Assistant Secretary (Personnel), Ministry of Health. In 1991, he served as the Senior Program Coordinator, National Institute of Public Administration and subsequently as the Principal Assistant Director, Economic Planning Unit (Perak). He was the General Manager, Yayasan Perak in 1993 and the Managing Director of Ekatinta Sdn. Bhd. in 1999. In 2000, he joined MRCB as Planner – Social Development attached to the President’s Office. He was appointed Executive Director of Berjaya Group Berhad in 2001 and in 2004, was appointed Chairman of Pertubuhan Berita Nasional Malaysia.
Non-Independent Non-Executive Director TAN SRI DR. WAN ABDUL AZIZ BIN WAN ABDULLAH Tan Sri Dr. Wan Abdul Aziz is a Non-Independent Non-Executive Director of MALAYSIA AIRLINES and is presently serving as Secretary General of Treasury in the Ministry of Finance. In 1975 he graduated with honours in Applied Economics from University Malaya and later acquired a Masters in Philosophy for Development Studies from the University of Sussex. In the early 1990s, he pursued a PhD in Business Economics at University of Leeds.
Already accomplished, he went a step further outdoing himself in the spring of 2004 by attending the Advanced Management Program at Harvard Business School. Tan Sri Dr. Wan Abdul Aziz started his career as Assistant Director of the Economic Planning Unit in the Prime Minister’s Department when he was appointed to the Malaysian Administrative and Diplomatic Service (PTD). 1998 saw him rise as Alternate Executive Director of World Bank Group Washington D. C. USA (on secondment by the Government of Malaysia) representing Brunei Darussalam, Fiji, Indonesia, Lao PDR, Malaysia, Myanmar, Nepal, Singapore, Thailand, Tonga and Vietnam.
From 2001 to 2005 he enjoyed a string of high flying posts as Deputy Secretary in the Economics and International Division, Deputy Director General of Macro Planning Division and Deputy Secretary General of Treasury (Policy) in Federal Treasury. To date, he has garnered enviable awards such as the Public Service Award of Excellence 1994, Prime Minister’s Department Quality Award 1997, Ahli Mangku Negara (AMN) award 1999 and in 2005, the Datuk Paduka Setia Mahkota Kelantan (DPSK) award. Independent Non-Executive Director DATUK HAJI YUSOFF @ HUNTER BIN DATUK HAJI MOHAMED KASIM
Datuk Hj. Yusoff @ Hunter bin Datuk Hj. Mohamed Kassim graduated with a Bachelor in Economics from the University of Adelaide, Australia. He began his career in 1977 as a Trainee in the purchasing department of Kinabalu International Hotel, Kota Kinabalu. In 1979, he switched career to become Assistant Director in the Economic Planning Unit of the Chief Minister’s Department. He was appointed District Officer, Beaufort, Sabah in 1982. From 1984 to 1994, he held various senior positions within the Chief Minister’s Department, and the Ministry of Industrial Development, Sabah.
He then moved to the Ministry of Finance, Sabah to serve as Under Secretary (Budget). Today, Datuk Hj. Yusoff @ Hunter bin Datuk Hj. Mohamed Kassim is the Permanent Secretary of the Ministry of Finance, Sabah. Independent Non-Executive Director DATUK AMAR WILSON BAYA DANDOT In 1972, Datuk Amar Wilson graduated from the University of Western Australia with a Bachelor’s Degree in Economics. In 1985 he went on to garner a Master’s Degree in Development Economics at the University of Sussex, United Kingdom. Datuk Amar has won many accolades and awards between 1986 and 2003.
His highest achievements to date are the Darjah Utama Yang Amat Mulia Bintang Kenyalang Sarawak “Datuk Amar Bintang Kenyalang” (D. A. ) 2007 and the Johan Mangku Negara (JMN) 2007. As a Civil Servant, Datuk Amar has been serving in his homeland of Sarawak for a little over three decades. He began his career as the Assistant Secretary in Agricultural State Planning, and has impressively risen over the years. Today, he holds office as the State Secretary of Sarawak. Alternate Director to Tan Sri Dr. Wan Abdul Aziz bin Wan Abdullah DATO’ PUTEH RUKIAH BINTI ABD MAJID
Dato’ Puteh Rukiah binti Abd Majid graduated from University of Malaya, Malaysia with a Bachelor of Economics (Hons. ) degree and holds a Masters in Economy from Western Michigan University, USA. Currently, she is the Deputy Secretary General (Systems and Controls), Ministry of Finance. In 2000, she held the post of Deputy Under Secretary, Ministry of Finance (Inc. ), Privatisation and Public Enterprise Division and subsequently, until 2006, served as Under Secretary, Investment and Privatisation Division, Ministry of Finance (Inc. ). On 16 August 2007, she was appointed as Alternate Director to Dato’ Dr.
Wan Abdul Aziz bin Wan Abdullah. Presently, she sits on the Boards of Perbadanan Aset Air Berhad, Perbadanan Usahawan Nasional Berhad, Pelaburan Hartanah Bumiputera Berhad, Penerbangan Malaysia Berhad and Tenaga Nasional Berhad. Alternate Director to Datuk Haji Yusoff bin Datuk Haji Mohamed Kassim DATO’ HAJI ABDUL RAHMAN BIN HAJI ABDUL GHANI Dato Haji Abdul Rahman Bin Abdul Ghani is a Malaysian and is an Alternate Director to Datuk Haji Yusoff @ Hunter bin Datuk Haji Mohamed Kassim. He graduated with a Bachelor of Arts from the University of Queensland, Australia in 1977.
He began his career in the civil service as Penolong Penguasa Kastam at the Royal Customs and Excise Department in 1977. Thereafter, he served in the State Civil Service, holding various senior positions in both government and statutory bodies and agencies during the last 23 years. He was Government Printer at the Sabah Government Printing Department before he joined Warisan Harta Sabah Sdn. Bhd. , a wholly owned investment holding company of the State Government of Sabah, as Chief Executive Officer with effect from April 17, 2000. Alternate Director to Datuk Amar Wilson Baya Dandot DATUK HAJI MOHAMAD MORSHIDI BIN ABDUL GHANI
He graduated with a Bachelor’s Degree in Economics from University Kebangsaan Malaysia and after that pursued further studies in Pennsylvania, USA. He holds a Master of Science in Human Resource Administration from the University of Scranton. He started out as Management Executive in Petronas in the 80s and later became Director of Kuching’s North City Hall for close to a decade. From there, he transitioned to the Chief Minister’s Department, becoming Director of Human Resources, Human Resource Development and Quality and later Permanent Secretary for the Ministry of Social Development and Urbanisation.
He is currently Deputy State Secretary of Sarawak. 2. 4 TOP MANAGEMENT TEAM Dato’ Sri Idris Jala Managing Director/Chief Executive Officer Dato’ Sri Idris, aged 50, holds a Bachelor degree from Universiti Sains Malaysia and a Masters degree from Warwick University, United Kingdom. He joined MAS in December 2005 as the Managing Director/CEO and steered the airline out of its financial crisis via its Business Turnaround Plan. From a full-year loss of RM1. 3 billion in 2005, Idris managed to turnaround the company and achieved a record full year profit for 2 consecutive years – RM851 million in 2007 and RM244 million in 2008.
Idris also sits on the Board of Tourism Malaysia and on the IATA Board of Governors. Prior to joining MAS, he held various key positions in the Shell group of companies, including Managing Director of Shell MDS, Vice President of Shell Gas & Power (Malaysia), Vice President, Retail Marketing & Business Development Consultancy (Shell International, London) and Managing Director of Shell Sri Lanka. Tengku Dato’ Azmil Zahruddin bin Raja Abdul Aziz Executive Director/Chief Financial Officer
Tengku Dato’ Azmil, aged 38, holds a double first class degree in Economics from the University of Cambridge. He is a Chartered Accountant and an associate member of the Malaysian Institute of Accountants and the Institute of Chartered Accountants in England and Wales. He is also an Associate of the Association of Corporate Treasurers, United Kingdom. Upon graduating, he was attached to the Audit and Business Advisory Services Division, PricewaterhouseCoopers in London and Hong Kong specializing in banking and capital markets.
In 2002, he took up the position of Chief Financial Officer in Penerbangan Malaysia Berhad (PMB), and subsequently as its Managing Director/ Chief Executive Officer in 2004. On 23 August 2005, he joined MAS on a full time basis, relinquishing his position at PMB. He sits on the Investment Panel of Kumpulan Wang Persaraan (Diperbadankan) and is a member of the Issues Committee of the Malaysian Accounting Standards Board. Dato’ Abdul Rashid Khan bin Abdul Rahim Khan Commercial Director Dato’ Rashid Khan, is the Commercial Director of MAS, managing the functions of Network and Revenue Management and Sales, Distribution and Marketing.
He has been with MAS for more than 36 years, having held various positions in the national airline’s home base as well as in Saudi Arabia, USA, Thailand and Germany. He currently serves senior roles in the industry’s most prominent and influential organisations including Chairman of Board of Airline Representatives (BAR) Malaysia; Pacific Asia Travel Association (PATA), Malaysia Chapter; ASEANTA and member of the National Tourism Committee Malaysia, and has previously served in an advisory capacity in the Tourism Committees of the Malaysian states of Sabah, Sarawak and Penang. He s a member of Harvard Business School Alumni Club of Malaysia and the Asian Institute of Management. Dato’ Tajuden bin Abu Bakar Director of Operations Dato’ Tajuden joined MAS in 1976 and is responsible for the airline’s operations networkwide. A licensed aircraft engineer by profession, he also holds a Master of Science degree in Engineering Business Management from the University of Warwick. Aside from engineering and maintenance, his previous experience included aircraft production inspection, line station management, joint venture project management and airport operations.
Before becoming the Director of Operations in 2007, he was the Vice President of Engineering ; Maintenance in 1999, Senior General Manager Technical ; Ground Operations (2001) and Senior General Manager Operations Control in 2006. Dato’ Tajuden represents MAS in the Technical Committee of the Asia Pacific Airlines Association (AAPA), the International Federation of Airworthiness (IFA) and is in the Board of Directors of Pan Asia Pacific Aviation Services Pte. , Hong Kong and MAS Aerospace Engineering Sdn. Bhd.
He is also the Board Chairman of GE Engine Services (Malaysia) Sdn. Bhd. , Hamilton Sundstrand CSC (Malaysia) Sdn. Bhd. , Aerokleen Services Sdn. Bhd. and MAS Catering Sarawak Sdn. Bhd. Dato’ Captain Mohd. Nawawi bin Awang Senior General Manager, External Relations Dato’ Nawawi, an airline pilot by profession, is a member of the Chartered Institute of Logistics and Transport (CILT) and holds a Master of Business Administration from the University of Strathclyde, Scotland. He joined MAS in 1975 after 5 years of service with the Royal Malaysian Air Force.
Throughout the years, he has progressed through several senior positions in the airline, including the role of Senior General Manager of Flight Operations prior to being appointed to his current position. Dato’ Nawawi has also represented MAS in a number of industry-level committees, including at the IATA Operations Committee from 2001 to 2004 and currently spearheads the airline’s efforts to ‘Win Coalitions’, proactively engaging with its stakeholders, namely government ministries and agencies, state governments, embers of parliaments, suppliers and business partners. He also leads the airline’s commitment towards Project PINTAR, a GLC-concerted effort in nurturing human capital, which is part of the airline’s Corporate Social Responsibility initiatives. He is also the President of Malaysia Airlines Sports Club (Kelab Sukan MAS) since 2004 and manages 23 sports sub-committees in the Company. Indira Nair Senior General Manager, Communications Indira Nair, aged 53, held a regional role at Ogilvy Public Relations Worldwide prior to joining Malaysia Airlines in February 2006.
At Malaysia Airlines, her remit covers Investor Relations, Media Relations, Internal Communications, Community Relations, Advertising & Promotions, Visual Identity and Customer Response. She has also worked with a number of networks including Edelman Worldwide, Burson-Marstellar and MDK Consultants, as well as the Berjaya Group. Her experience ranges from leading integrated communications campaigns to turning around agency operations and developing/implementing network-wide training programmes. Mohd. Azha bin Abdul Jalil Senior General Manager, Finance
Mohd. Azha Abdul Jalil, aged 42, graduated with Bachelor degree in Accounting (High Distinction) from Indiana University, Bloomington, USA. He joined MAS in July 2007. Prior to joining MAS, he held eight different positions in Shell group of companies within a span of 17 years. The assignments included as General Finance Manager of Shell MDS Malaysia, Senior Analyst (Business Performance & Strategy) at Shell International London, Finance Manager (Commercial) of Shell Malaysia Trading Berhad and several other finance positions at Sarawak Shell Berhad.
He started his career with KPMG Peat Marwick. Effendi bin Abdul Rahman Senior General Manager, Human Resources Effendi bin Abdul Rahman, aged 53, holds a Bachelor degree in Computing Science from Imperial College London and Masters in Business Administration from Ohio University, USA. He was appointed Senior General Manager, Human Resources in April 2006 and has instituted many changes in the airline’s human resources operations and strategy since, including the organisation-wide implementation of the Performance Management System.
Before joining MAS, he was the HumanResources Director in Dutch Lady Milk Industries Berhad. Prior to Dutch Lady, Mr. Effendi held a similar role at Texas Instruments. Mr. Effendi also has extensive business related experience in other management roles at other organisations such as Northern Waste Industries, Proton and Time Telecommunications. Shahari bin Sulaiman Managing Director, MASkargo Shahari Sulaiman, aged 46, graduated from the University of Southern California with a Bachelor of Science (B. Sc) in Aerospace Engineering in 1985.
He subsequently joined Malaysia Airlines and had served 15 years in various technical capacities in Engineering Division. In early 2001, he was brought into MASkargo as a Senior Management team member to turn around the company and has held various key positions over the last 7 years. He was appointed to the current position in September 2007. Mohd. Salleh Ahmad Tabrani Managing Director, MASwings General Manager, Transition Management Salleh, aged 46, graduated in 1985 with an Honors Bachelor degree in Economics from University of Waterloo, Ontario, Canada. He joined MAS in 1986 as a Management Trainee.
Since then, he has held several management positions at various locations within domestic and international network of MAS which includes posting in Malaysia, Brunei, Germany, Holland, USA and Australia. Over the last 23 years, given his wide international experience, he has progressively assumed higher management positions and responsibilities within MAS. His current management responsibilities include being Board of Director for MAS subsidiaries such as Golden Boutique Sdn. Bhd. and Golden Holidays Sdn. Bhd. He is also a faculty member of MAS Leadership Development Program. Mohd. Roslan bin Ismail
Managing Director, MAS Aerospace Engineering Senior General Manager, Engineering ; Maintenance Mohd. Roslan bin Ismail, graduated with a Master of Science (M. Sc), (Transport Planning) from Universiti Teknologi Malaysia (UTM), Skudai, Johor, in 1996 and holds a Malaysian DCA Aircraft Maintenance Engineer’s License. He started his career in MAS as a Licensed Aircraft Maintenance Engineer and has more than 28 years of working experience in the Engineering Division. He is currently a member of the Board of Directors of Malaysian Institute of Aviation Technology (MIAT), Honeywell Aerospace Services (M) Sdn.
Bhd. , GE Engine Services Malaysia Sdn. Bhd. (GEESM) and Hamilton Sundstrand CSC (M) Sdn. Bhd. He is also the Managing Director of MAS Aerospace Engineering Sdn. Bhd. , a wholly owned subsidiary company of MAS. Eddy Leong Chin Tung Managing Director, Firefly Eddy Leong Chin Tung, aged 36, graduated with a Bachelor of Business in Accounting from the RMIT University of Melbourne, Australia and also a member of the Institute of Chartered Accountants in Australia as well as for Malaysian Institute of Accountants.
Prior to joining MAS in 2003, Eddy Leong was in the Audit & Business Advisory and Business & Risk Consulting units in Arthur Andersen (which merged with Ernst & Young in 2002) from 1997 to 2003. He has held various key positions within MAS including Project Director of MAS Hotels & Boutiques Sdn. Bhd. , Head of Project Management Department, Assistant General Manager for Airport & Inflight Operations (Quality Assurance), and Assistant General Manager, Turnaround Management Office until 2007. Currently, Eddy Leong holds the position of Managing Director of FlyFirefly Sdn.
Bhd. , a subsidiary airline of MAS. Dr. Amin Khan Senior General Manager, Network & Revenue Management Dr. Amin Khan graduated from the Cranfield School of Management, United Kingdom, with an MBA and PhD in Management. He is a licensed aircraft engineer and a certified Six Sigma Black belt holder. He has held various key positions in the Company, namely in Engineering, Internal Audit, Network Planning and Revenue Management, Human Resources (Training and Development), Sales and Regional Manager of the China region.
Prior to his appointment to his current position, he was double hatting as the Senior General Manager for Transition Management that leads the development and implementation of the Passenger Services System including eCommerce and the Managing Director of MASwings a subsidiary of MAS that provides rural air services in East Malaysia. He is currently heading the Network, Revenue Management and Distribution in MAS. Dato’ Bernard Francis Senior General Manager, Sales Dato’ Bernard Francis, aged 39, holds Bachelor degree from Universiti Kebangsaan Malaysia and Masters in Business Administration (International Business) from Universiti Malaya.
He was entrusted with the new role of Senior General Manager Sales in overseeing the entire sales function systemwide. Also, he double-hat as the Regional Manager for Malaysia & ASEAN. Prior to the appointment to his current position in November 2008, Bernard headed Network, Revenue Management and Distribution and played a pivotal role in the rationalisation of both the International and Domestic networks, instituted many structural changes to Revenue Management Optimisation since, including Fare Class Realignment and Fare Distributions.
Bernard managed to increase the Company’s yield which resulting an impressive improvement of 39%. Before joining MAS, he was the Regional Director, Route Revenue and Distribution with responsibilities covering AirAsia Malaysia, Thai AirAsia and Indonesia AirAsia. His past experience with YTL Group includes Project Financing and Mergers and Acquisitions related to energy, cement, property, hotels and information technology. Captain Dr. Ooi Teong Siew General Manager, Corporate Safety, Security, Health, Environment Captain Dr.
Ooi, age 55, joined MAS as a cadet pilot in 1972. He became Captain at age of 25 and has held various key management pilot positions for the last 26 years. He holds a Master of Business Administration from the University of Bath and a Doctor of Business Administration from the University of Newcastle. He is an associate lecturer in corporate strategy and change management for the Malaysian Institute of Management. Raja Azura Raja Mahayuddin Chief Internal Auditor
Raja Azura Raja Mahayuddin, aged 36, graduated with a Bachelor of Accounting (Hons) from Universiti Utara Malaysia. Before joining MAS, she had served Arthur Andersen ; Co for 4 years. She is a Chartered Accountant (CA), Certified Internal Auditor (CIA) and has obtained the Certification in Control Self Assessment (CCSA). She has been actively involved with the International Association of Airline Internal Auditors (IAAIA) as a member of the Executive Committee and has recently bee appointed as the Chairperson of the IAAIA for financial year 2008 and 2009.
She is also the Chairman of Whistleblower Independent Committee since the roll-out of the programme in 2006. Prior to the appointment to her current position in March 2005, she assisted the organisation in establishing the Organisation ; Methods Department and participating in several corporate initiatives including developing of Corporate Safety and Security Management Manual (CSSMM), development of Corporate Approving Authority Manual (CAAM), Enterprise Content Management System (ECMS), and Regional Management Development Programme.
Rizani bin Hassan Company Secretary Rizani bin Hassan, graduated from MARA Institute of Technology in 1986 with a Diploma In Law and thereafter, with an Advanced Diploma In Law, he went on to do his post graduate courses and graduated with a Post Graduate Diploma in Syariah Law and Practice and Masters In Comparative Law from the International Islamic University in 1992 and 1994 respectively. He was a Legal Officer with a Government statutory body from 1987 to 1990 before he left the service to join a law firm as an advocate and solicitor.
He joined MAS on 15 July 1994 as a Legal Corporate Counsel and thereafter as General Counsel until 2002 when he was transferred to Group Secretarial Practice as the Group Company Secretary. 2. 5 VISION On 30 January 2008, Dato’ Sri Idris Jala and the management team announced the Business Transformation Plan (BTP 2), a continuation of the BTP 1 (Business Turnaround Plan). Having achieved a record profit of RM610 million, the BTP 2 focuses on profitable growth. Big challenges are looming ahead in the airline industry.
These include overcapacity, intense competition with yields and profit margins eroding as well as liberalisation of ASEAN skies and rising fuel costs. The vision is to become the World’s Five-Star Value Carrier (FSVC) with a mission to be consistently profitable and with the strategy of business transformation. The MAS Way continues to be the guiding principle. However, to achieve the FSVC vision, Malaysia Airlines must reinvent itself and take 5 bold steps that make up the FSVC Virtuous Cycle of Profitable Growth. Step 1: 5-star products ; services Step 2: Lower costs Step 3: Competitive fares
Step 4: Get more customers, more revenue Step 5: Grow network, build capacity 2. 6 MISSION On 27 February 2006, Dato’ Sri Idris and the new management team announced a Business Turnaround Plan (BTP). The BTP was developed using the Malaysian Government Linked Company (GLC) Transformation Manual as a guide. With a clear mission to become a profitable airline, the national carrier pursued a business turnaround strategy which promised to cut losses from RM1. 7 billion (full year) to RM620 million in 2006, achieved a profit of RM50 million in 2007 and a record profit of RM500 million in 2008.
The BTP outlined The MAS Way, focusing on five central thrusts as the framework. 1. Flying to win customers 2. Mastering operational excellence 3. Financing and aligning our business on P & L 4. Unleashing talents and capabilities 5. Winning coalitions 2. 7 BUSINESS MODEL Subang (15 April 2009): Malaysia Airlines launched its MAS Stimulus Package today, offering something for everyone with 9 deals covering first, business and economy class travel. This is good news for the travelling public as the extensive offering covers 7 deals for economy class travel, 1 for business and 1 for business and first class.
In addition, the MAS Stimulus Package covers domestic, ASEAN and international travel. Malaysia Airlines Managing Director/ Chief Executive Officer, Dato’ Sri Idris Jala said, “This is the best time for the public to travel as such incredible offers are given only during a downturn! Customers are the ones to truly benefit during this time as we are looking for innovative ways to boost load factors and revenue. “Never waste a good crisis. While we cannot control the operating environment, we can control the way we run our business. These deals have been tailored to meet what the customers want and stimulate travel demand. Based on the public’s support to us during our travel promotions, we can see that if they are given a choice to fly with us, they will definitely do so as we offer the best value for their money. ” Customers enjoy the benefits of flying with a full service carrier and the service of the World’s Best Cabin Crew. This year, Malaysia Airlines’ crew has won the World’s Best Cabin Crew award by Skytrax for the 6th time and the World’s 5 Star airline award by Skytrax for the 4th consecutive year. During the recent MATTA Travel Fair, Malaysia Airlines’ revenue increased about 3X to RM11. 7 million from RM3. 4 million.
The Malaysia Airlines Travel Fair in February recorded a 36% growth to RM95 million in 2009 compared to RM70 million last years. “The MAS Stimulus Package is in line with our vision to transform into The World’s Five Star Value Carrier. It’s absolutely necessary to change your business model, and you need to change it radically to survive and win in such a tough operating environment. “We have been relooking at everything we have been doing since last year, making radical changes to increase revenue. For example, in May last year, we launched Everyday Low Fares or ELF where our online revenue grew 150%.
We have been following this through with many other initiatives and today, we unveil the MAS Stimulus Package, offering something for everyone,” Jala added. There are 9 deals under the MAS Stimulus Package: First and Business Class 1. Premium Match * Malaysia Airlines will match the price of one’s previous travel on another airline for flights above 3 hours. * This applies for First and Business Class travel. * Asean and International travel 2. Business Companion * 50% discount is offered for your companion’s business class travel. * Domestic, Asean and International travel Economy Class 3.
Economy + * Pay economy class fares but enjoy business class travel privileges including access to the lounges and accrual of Enrich miles. * Domestic, Asean and International travel 4. Balik Kampung * Travel during weekends * Enjoy all inclusive RM69 fares for travel within the Peninsular & within East Malaysia * RM99 for travel between East and West Malaysia * Domestic only 5. Weekend Getaway * Special fares for long weekend travel * ASEAN only 6. Kids Fly Free * For every 2 adult economy class tickets purchased, a child below 12 years old travels for free * Domestic and Asean travel . MHFlex, 1+1 * Purchase 1 economy class ticket, and your companion gets a free ticket on flights operated by Malaysia Airlines * Domestic and Asean travel 8. 80% discounts off domestic & ASEAN * Enjoy low fares when you book online * Domestic and Asean travel 9. Grab-A- Deal * Special fares for selected destinations are available online from time to time * Domestic, Asean and International travel The Grab-A- Deal and Balik Kampung fares which have been available online since March have been very popular amongst customers. In just slightly over a month, sales for Grab-A- Deal and Balik Kampung have hit more than RM17. 5 million – RM12 million for Grab-A- Deal, and more than RM5. 5 million for Balik Kampung. That’s incredible considering the economic situation we are in. This shows that if you give the public what they want – they will travel,” Jala also said. The national carrier is also playing its part in promoting domestic tourism. “7 of the 9 fare options are available for domestic travel. Balik Kampung which is only for domestic travel has been selling like hot cakes, and the seats are sold out for the next 2 months,” he also said.
The other 6 fare options available for domestic travel are Business Companion, Economy+, Kids Fly Free, MHFlex 1+1, 80% off domestic ; Asean and Grab-A-Deal. MAS Stimulus Package Partnerships and Code Share Agreements Malaysia Airlines has code-sharing partnerships with 25 airlines, including four from SkyTeam, two from OneWorld and seven from Star Alliance. Under the revised Business Transformation Plan unveiled in January 2008, Malaysia Airlines has embarked on a plan to form a network that resembles an alliance without joining an alliance.
The airline requested to join the SkyTeam alliance in 2006, but there is still no outcome from the discussions. Malaysia Airlines signed code-share agreements with Alitalia in Italy and China Southern Airlines in China, both of which are members of SkyTeam, in 2007. Therefore, instead of waiting to join SkyTeam, Malaysia Airlines launched Project MOSAIC together with the new Business Turnaround Plan for the period until 2012. MOSAIC stands for ‘MAS Overall Strategic Alliance Integration Concept’, to reap the maximum value from Malaysia Airlines’ present hub-and-spoke network. 31] The MOSAIC Project’s scope includes identifying high-value code-share partners and Special Pro-Rate Agreement (SPA) partners, increasing agreements with partner airlines, discontinuing non-beneficial code-share partners and optimizing flight connections. In the second quarter of 2008, Malaysia Airlines is expected to sign another two code-share agreements with Jet Airways and Turkish Airlines, from India and Turkey respectively. This is to enable Malaysia Airlines to tap the central Europe and India markets.
Malaysia Airlines code-shares with the following airlines as of 20 March 2008: Malaysia Airlines — codes hare agreements ; interline partnerships| Airlines| Destinations| Air India| Hyderabad, Los Angeles, Melbourne, Mumbai| Air Mauritius| Mauritius, Melbourne| Alitalia| Athens, Barcelona, Frankfurt, Geneva, Madrid, Melbourne, Milan, Penang, Perth, Rome, Sydney| All Nippon Airways| Fukuoka, Kota Kinabalu, Kuching, Langkawi, Narita, Nagoya, Osaka, Penang, Sapporo, Sendai| Austrian Airlines| Vienna| BMI| Belfast, Dublin, Edinburgh, Glasgow, Leeds, London, Manchester| Cathay Pacific| Hong Kong, Penang|
China Southern Airlines| Beijing, Guangzhou, Shanghai-Pudong| Continental Airlines| Special Pro Rate Agreement| Dragon Air| Kota Kinabalu, Hong Kong| Egyptair| Cairo, Kuala Lumpur| Etihad Airways| Abu Dhabi| Garuda Indonesia| Darwin, Denpasar, Frankfurt, Jakarta, London, Medan, Paris, Surabaya, Stockholm, Newark| Gulf Air| Bahrain, Kuala Lumpur, Muscat| Jet Airways| Bangalore, Chennai, Delhi, Hyderabad, Mumbai| KLM| Adelaide, Amsterdam, Auckland, Bergen, Brisbane, Brussels, Copenhagen, Gothenburg, Helsinki, Kota Kinabalu, Langkawi, Melbourne, Oslo, Penang, Perth, Stavanger, Sydney, Stockholm| Korean Air| Incheon, Penang|
Myanmar Airways International| Rangoon| Philippine Airlines| Cebu, Manila| Qatar Airways| Doha| Royal Brunei Airlines| Brunei| SilkAir| Singapore| Singapore Airlines| Singapore| South African Airways| Johannesburg| Sri Lankan Airlines| Colombo, Kuala Lumpur| Swiss International Airlines| Zurich| Thai Airways International| Bangkok, Phuket| Transaero Airlines| Moscow, Kuala Lumpur| Turkish Airlines| Istanbul| Uzbekistan Airways| Tashkent| Virgin Blue| Balina Byron, Broome, Cairns, Canberra, Coffs Harbour, Darwin, Frasers Coast, Gold Coast, Hamilton Island, Hobart, Mackay, Newcastle, Rockhampton, Sunshine Coast, Townsville| . 0 INTERNAL ANALYSIS 3. 1 FINANCIAL PERSPECTIVE | LIQUIDITY| | | PROFITABILITY| YEAR| Current Ratio| Quick Ratio| Cash Ratio| Receivable Turnover| Day’s Sales in Receivables| Net Profit Margin| Return on Assets (ROA)| Return on Equity (ROE)| 2008| 1. 38| 1. 31| 0. 60| 8. 14| 44| 1. 63%| 2. 44%| 6. 08%| 2007| 1. 42| 1. 35| 1. 00| 9. 42| 38| 5. 4%| 9. 4%| 27. 8%| 2006| 0. 76| 0. 69| 0. 31| 8. 85| 41| -1. 2%| -2. 5%| -8. 3%| From the analysis on the financial from 2006 to 2008, there have some conclusion can be made according to the financial status of the Malaysia Airline.
There has strength in some aspect, but there also has weaknesses in some aspect. The strength of Malaysia Airline in financial analysis as follow: a. Higher Liquidity Financial part is one of the important ways to analysis the company. Among the financial perspective, liquidity is one of the essential analysis tools to evaluate the financial status of the company. This is because liquidity can be use to evaluate the ability of the company to paid off the obligation either in the short term period or immediately. From the table show that Malaysia Airline has a strong liquidity in 2007 and 2008 with 1. 2, 1. 38 respectively and sound good in 2006 with 0. 76. Its show that there a strong ability of Malaysia Airline to paid off their debt in the short period even immediately. Malaysia Airline showed a good performance in liquidity able to increase the confidence among the outsiders such as investors to continuing keep investing to the company, customers to continuing be royal to the company, and especially credit traders and suppliers to continuing has a business relationship with the company. b. Higher Receivable Beside, Malaysia Airline has strong in receivable turnover.
This can be determining from 8. 85 in 2006, 9. 42 in 2007 and 8. 14 in 2008. For the day’s sale in receivable, Malaysia Airline has an excellent performance which is roughly 45 in that three. This means that Malaysia Airline has a strong ability to manage their receivable and to collect their debt with the receivers in the short period. The weaknesses of Malaysia Airline in financial analysis as follow: a. Lower Profitability However, Malaysia Airline does not generate a good performance in term of profits either for the company or shareholders.
This can be determining by its Net Profit Margin, Return on Assets and Return on Equity. The worse is Malaysia Airline has negative 1. 2%, 2. 5% and 8. 3% for Net Profit Margin, Return on Assets and Return on Equity respectively in 2006. Even the others two year does not loss, but the profits that generate by Malaysia Airline are very bad except for 27. 8% of Return on Equity in 2007 and then decrease to 6. 08% in 2008.. Net Profit Margin in 2007 is 5. 4% and decrease to 1. 63% in 2008. This trend is similar in Return on Assets which is 9. 4% in 2007 decrease to 2. 4% in 2008. 3. 2 OPERATINAL PERSPECTIVE Operational department play an important role in the whole business process and can be conclude as a core for the business. Whether or not the company able to generate profits is more depend on operational. This is because operational is forward of the business that most sensitive for the profits. That means whatever the changes is made the effect will be first shown in the operational. Therefore, every company are try any effort to create a strong operation to ensure the business to continuing generate a profits.
From the analysis of the Malaysia Airline operational aspect, we are determining some strengths and weaknesses of the company. The Strength of the operational of Malaysia Airline as follow: a. World Best Cabin Staff MAS’ maintenance staff, flight operations staff and ground crew are world-class in their technical skills. MAS’ 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 their five-star rating owes much to their grace and professionalism. b. Good Performance in Systemwide On-Time Departure This was made possible following the Operations Control Centre’s (OCC) effort to improve utilization of its aircraft. The physical centralization of key operating departments was done to enhance communication among the departments to make it more responsive to events such as schedule disruptions. c. Lowest Labor Cost in the Region
MAS have low labor costs, a function of a comparatively low cost of living in Malaysia, is perhaps the most important ‘building block’ and something that they must strive to maintain. Malaysia does not have the large base of business traffic enjoyed by its neighbors to the south and therefore it will be difficult to match them on absolute revenue performance. To be competitive, MAS must maintain a cost advantage. d. Cost Competitive in the Region In cost/ASK, US Cents, MAS has cost competitive which is 4. 1 compare to SIA, Cathay, Thai and AirAsia with respectively 6. 0, 5. , 4. 3, 3. 0. This put MAS at a competitive level with the other top airline company in region. The Weaknesses of the operational of Malaysia Airline as follow: a. Out of Control for the Risen of Cost Operational Despite a low starting point, MAS’ costs have risen by over 20% in the last year and show no signs of flattening. Furthermore, its productivity is at the low end of its peer group. b. Lower of Labor Productivity In ASK million/number of personnel, MAS has a low value which is 2. 80 compare to SIA, Cathay, Thai and AirAsia with 5. 0, 4. 0, 2. 5, 4. 5 respectively.
It consider that MAS has a quite a low productivity in labour which is not good for the efficiency of work. It needs to have much higher productivity than its peers to be able to survive and prosper in its smaller revenue environment. As MAS factor costs rise, it will see a disproportionate increase in costs unless it can become much more efficient with their resources. Of particular concern is their fixed cost base. MAS has millions of ringgit invested in some real estate and equipment through it offices around the world that do not directly contribute to revenue production. 3. 3 MARKETING PERSPECTIVE
Marketing is another crucial element to maintain the profitability of organization. In marketing perspective, there are consist of four important elements which is related each others to ensure the effectively of the organization to run the business. These four elements are pricing, production, promotion and. Each of them will be affect the organization to compete in the market or industries. These four elements might be determine the position of the organization in the market like the price of the product of the company will be as a measurement for the consumers to judged the image of the organization.
From the analysis on the Malaysia Airline marketing perspective, we found certain strengths and weaknesses of the company. The Strengths of the MAS in the Marketing as follow: a. Discimination of the Price MAS have strength in the discrimination of the price with launched new project such as “Firefly” and “MASWings”. “FireFly” has a clear customer value proposition themed “Incredible Value with Low Fares” with emphasis on being an affordable point-to-point fullservice airline. It has also adopted a consumer friendly policy of all-inclusive pricing with no hidden charges as well as complete removal of fuel surcharge in its ticket prices.
Beside, “MASWings” is introduce to in the Sabah and Sarawak to improve the customer value proposition with prepare flight card for travel within Sabah and Sarawwak which offers airfares 30% lower than normal market fare. The Weakness of the MAS in the Marketing as follow: a. MAS current, and future, fleet and product are poorly matched to MAS’ strategic realities The markets in and out of, and around, Malaysia are relatively small. However, the MAS fleet is predominantly made up of some of the largest aircraft in their class, putting it in the league of the leading international airlines.
In addition, they have produced one of the world’s most attractive products by upgrading their cabins—generous seat pitch in economy and business, and a flat bed in first class. Unfortunately, their higher costs have not been offset by stronger yields or loads. Given the limited business traffic, they are more dependent on low yield connecting traffic, and as our aircraft have relatively few seats in them, this drives up unit costs. A MAS 777-200 has only 247 seats in economy, compared with 293 in Singapore Airlines. b. MAS pricing power significantly lags the industry
MAS substantially lags its peers on yield—and this is it’s central issue. 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 is due to weaknesses in it’s pricing and revenue management, sales and distribution, brand presence in foreign markets, and alliance base. 3. 4 HUMAN RESOURCE PERSPECTIVE Human resource is related to the how efficiency of the company to manage their staff to achieve the objective of the company. The main objective of the human resource is to improve productivity of the company.
To achieve this objective, there had many factors there have to take into account such as hiring the staff, provide training to employees, give reward tie-to the performance of employees. From the analysis of MAS, there are some strength and weakness that we founded for the company. The strength of MAS in Human Resource as follow: a. Capable New CEO The MAS new CEO, Dato’s Idris Jala whose was appointed since 1 December 2005 has a very strong background where he had successfully led the business turnaround of Shell Middle Distillates Synthesis (SMDS) Malaysia Sdn. Bhd.
He has proposed the Business Turnaround Road Map to turn MAS from loss of RM1. 3 Billion in 2005 into profit RM798 Million and RM224 Million in 2007 and 2008 respectively. b. Provide Well Employees Benefits MAS is offer the Employees Shares Option Shceme ( “ESOS”) to any eligible directors or employees selected based on the criteria of allocation at the discretion of ESOS committee with maximum of 10 percent of the total issue. 3. 5 Research and Development Perspective Many firms today conduct no R;D, and yet others companies depend on successful R;D activities for survival.
Research and development expenditures are directed at developing new products before competitors do at improving product quality, or at improving manufacturing processes to reduce cost. Research and development is important to improve the competitive advantage of company in market. Those are normally include in compete as low-cost provider of goods or services, compete as high-quality provider and so on. The strength of MAS in Research and development as follow: a. Offer Fare Branding MAS launched value fares which provide customer with value and choice.
In line with practice worldwide, MAS branded their fares and provide full information for each of fares-MHlow,MHbasis, MHsmart and MHflex- to provide the customer with full control of their travel experience. 3. 6 Management Perspective How the management of the company will give impact on the whole company. Even the company has an excellent strategy and plans, there is not use if the manager is failed to mange the company well. The functions of management consist of five basic activities such as planning, organization, motivation, staffing, and controlling.
The strength of MAS in management perspective is as follow: a. Business Turnaround Plan (BTP1) and Business Transformation Plan (BTP2) Business Turnaround Plan (BTP1) is introduced in 2 Fed 2006 which is take 2 year to launched by new Managing Director and Chief Executive Officer, Dato’s Sri Idris Jala