Alternate Business Model For MH

[KK Lee 5]

Since this forum has been pretty quiet after MH A33E debate cooled down, so why not little fire and fuel for some fun, and keyboard warrior to exercise

 

Few will dispute MH has been losing market share to AK, EK, EY, etc in the last few years. As MH has much higher cost base than AK, MH profit is unlikely to be worthwhile in the current form.

 

Frequent travelers (normally higher yield) in the U.S., Europe, Singapore, etc cited frequency as the top priority in choosing which airline to take. Most MH routes that are not daily (intercontinental) or multiple daily (regional) are low yield. Increase these routes frequency with MH current and planned fleet may not be economical.

 

Believe MH should consider smaller aircraft like CRJ/E170/175/CS100 to complement 738, 787 to compliment A333/772. This strategy may not be popular in Asia but is proven in the U.S. and Europe. With CRJ/E170/175 MH could cover more secondary destinations in Indonesia, Thailand, Philippine to feed the main lines.

 

Some old school will argue; CRJ/E170/175/CS100, 738, 787 and A333/772 still need the same number of set of tech crews for each type, cheaper crew cost per seat for larger aircraft and operating smaller aircraft is less prestige. But history has shown, low yield is less likely to profitable even at cheaper cost per seat mile.

 

[Leong Chuo Sheng 0]

*This is assuming MH has all the $$$ for this exercise and an ideal operating environment (i.e. no gov't interference)*

 

I think this model would work:

 

Domestic

MH could use Embraer 190/195 for Peninsular and intra-Sarawak flying and B738 for the Sabah/Sarawak and Peninsular links or even a hybrid of both (as traffic would dictate). This way, MH can use the faster turnaround times for the E190s as well as benefit from lower fuel burn and possibly more frequency if they want to capture the crucial business market. If necessary, the minimum level of frequency should be the 8am/12pm/5pm (thereabouts) weekdays and perhaps a 10am/4pm on weekends. A slick 100 seater would be easy to fill as well as able to compete effectively against AirAsia as the E-jets are wonderful from a passenger point of view - winning back the businessman as well as passengers who like a little "extra" should be MH's strategy to remain a profit leader in the domestic front.

 

The E-190s should have the leather seats, GCC as well as individual PTVs with a few good channels as well as good in-flight product, ala SilkAir.

 

Regional

Utilise the B738s for near regional routes (SIN,BKK,MNL,CGK, ASEAN as well as east India?) with ideally a double daily service - one in the morning and one at night for the crucial kangaroo route feed. A 4x daily SIN shuttle could cut it for KUL as well as the strategy of either bracketing (sandwiching the competitors route timing) or avoidance (if the competitor goes in the am, then we get in during the pm). I prefer the first strategy as it can pressure the competition as well as increase frequency.

 

International

Get into SkyTeam!!! Perhaps create a BA/QF strategy at SIN, with planes continuing direct from LHR/CDG/FRA/AMS-KUL-SYD/MEL/AKL with the minimum turnaround time possible. Either way, MH can capitalise on the kangaroo route with possibilities of double daily at either end of the route and perhaps can be done with 8 to 10 widebodies?. The minimum turnaround time increases aircraft utilisation (which MH's widebody fleet is so poor at). An enduring marketing strategy is crucial, something like "Going Beyond Expectations" was a good one...I think the "Malaysian Hospitality" one can be better improved by making it more constant and visible rather than the FSVC direction.

 

A fleet of A380/B748i, B773ER/A350 and B787/A33E would be able to service MH's international routes nicely. A380/B748i for heavy routes (AMS/LHR/SYD/MEL), B773ER/A350 for near destinations (DXB/NRT/IST/FCO/JNB/CPT/EZE) and the B787/A33E for supplemental frequencies (i.e 3x daily or higher) for main destinations as well as high traffic regional routes (HKG,PEK,CAN,PER,DEL,BOM, etc).

 

I think with this model MH would be very strong in the domestic front as well as being on the counterattack on the regional side. With both up and running the long-haul international routes would be OK as MH can rely on some O & D traffic as well as a strong domestic/regional feed to support those operations.

 

Also entry into SkyTeam would help tremendously, with help from AF/KL (assuming AF can get over their differences with MH) ensuring high-yield passengers from Europe onto MH's services to Australasia and beyond as well as additional feed for both parties on domestic/regional routes.

 

*Ideal fleet mix: E-190, B738, B787, A350, B748i*

 

My 2 sen...

[Kenneth T 0]

Well, during those time when a friend of mine who was the Captain of MH, there's already talk and proposal to acquire the Embraer but too bad, it's just an empty talk.

[KK Lee 5]

*This is assuming MH has all the $$$ for this exercise and an ideal operating environment (i.e. no gov't interference)*

 

Until fuel derivative contract expire in 2016, MH profit is dependence on oil price, hence credit rating is relative low by itself. However, MH has a very rich uncle that can extend guarantee to creditors for MH to borrow at very favourite rate or absorb almost any amount of rights issue. Hence, MH can has all the $$$ to buy any aircraft.

 

[Tony 1]

Well, during those time when a friend of mine who was the Captain of MH, there's already talk and proposal to acquire the Embraer but too bad, it's just an empty talk.

 

Thank god they didn't buy the Embraers. We have the 170 and 190, but call them the 180 - pushback, taxi, and come straight back to gate. Tech! *scrambles for aircraft change and re-crew*

 

Then again, that was 'back then'. Product should have matured and be better now (hopefully).

[Kenneth T 0]

Well, i think one of the reason they didn't choose embraer is because these type of aircraft can't land in remote airport like Mulu.

[Azreen 0]

I wish MAS' CEO would join this forum and share some insights, where possible, to all of us here.. That would be interesting..

 

I wish MAS' CEO would join this forum and share some insights, where possible, to all of us here.. That would be interesting..

 

I wish MAS' CEO would join this forum and share some insights, where possible, to all of us here.. That would be interesting..