Tough times for MAS

[flee 5]

Talk of being No. 1 in Asia is premature, returning to and sustaining profit must be priority.

 

ALL is not well with Malaysia Airlines (MAS) (see MAS: On a wing and prayer). While the situation is dire, it is not impossible for the airline to recover its fortunes but it needs some nifty strategic changes and deft execution.

 

While key officials say they want the airline to be Asia’s top one by 2015, they don’t say clearly in terms of what. MAS is already among the best in the world in terms of service but that does not spell profit with the airline slipping into an operating loss of RM267mil for the first quarter of this year.

 

This airline has been through tough times, slipping into massive losses at several points during its history. With help it has come back from the brink of failure but it has not been able to show the kind of sustained profitability that other airlines such as Singapore Airlines have exhibited.

 

MAS’ fortunes have deteriorated so much that low-cost carrier AirAsia overtook it in terms of market value earlier this year and seems set to widen its lead as it made a profit in the latest quarter while MAS reported a substantial loss.

 

MAS has a good product going by the continuing rave reviews for its cabin services. That alone is not enough to make it profitable. As with any business, you arrive at a profit or loss after subtracting costs from revenue.

 

For an airline, the revenue is dependent on capacity and how much it grows or reduces its routes, the load factor which is a measure of capacity utilisation, and the crucial pricing through which you maximise revenues.

 

This is to be juxtaposed with costs, of which the major and most volatile one is oil prices on which the jet fuel price depends. Sometimes, your cost savings justify a cutback in routes but a prudent airline will also consider the long-term impact of such a move because you don’t want to constrain future growth.

 

Because airlines are so dependent on oil costs, they try to hedge their positions to cap their costs but when wrongly or improperly done, this can wipe out airlines.

 

In fact in 2009 MAS had to provide a massive RM3.95bil in provisions for it’s hedging which nearly oblitereated its shareholders’ funds, requiring it to ask an exemption from de-listing procedures under Bursa Malaysia’s Practice Note 17.

 

In that episode, MAS had hedged at an oil price of US$100 per barrel but what it failed to do was to structure the hedge so as to benefit fully from any fall in the oil price below US$100. Paradoxically, as the oil price collapsed, MAS’ profits collapsed too.

 

For the subsequent quarters, MAS made enormous profits because the oil price rose again, reversing some of the earlier provisions but there were massive operational losses nevertheless.

 

For the latest quarter, MAS again blames rising oil prices for the losses but there is no explanation as to how many other airlines still manage to make profits, albeit at lower levels.

 

One has to suspect that this lies in revenue management. Perhaps it does not have enough business class or first class seats. Perhaps it has got its pricing wrong and is cannibalising some of its own market via cheap offerings and through its low-cost airline, Firefly. Perhaps it has given up too many routes to be able to grow rapidly.

 

Perhaps, MAS has become so obsessed with cutting fares and offering value comparable to low-cost airlines that it is losing its own high yielding market by people who book earlier to take advantage of lower fares.

 

Perhaps the airline is not very clear about where it should stand in terms of the kind of strategy it must adopt to maximise its revenue. You don’t leverage great service by offering value (read low-cost) fares. In fact you do the exact opposite.

 

Yes, one must agree that new airplanes are more cost efficient and that could make the difference between profit and loss, but does that imply that MAS has been negligent in its fleet planning?

 

In terms of broad strategy, MAS should just focus on being an excellent full-service carrier, market it as such and leave low-cost operations to subsidiary Firefly. It should get the best people and systems to manage its fleet and price its fares.

 

It should focus on continued cost reduction in other areas without seriously undermining its service standards, its promotional efforts and its brand reputation and positioning.

 

And it should engage in prudent hedging policies which allow it to take advantage of falling oil prices instead of being locked into high-cost oil when the price of oil is falling.

 

Once it has sorted all this out and is back on the firm path of profit, then it can talk about being Asia’s number one airline in every respect, not just service.

 

• Managing editor P Gunasegaram is willing to bet that Malaysia Airlines will not meet its own target of becoming Asia’s top airline by 2015. Any takers?

 

Source: http://thestar.com.my/columnists/story.asp?file=/2011/6/11/columnists/aquestionofbusiness/8881549&sec=A%20Question%20Of%20Business

 

MH's response to The Star's editorial piece:

 

MAS on the path of transformation

We refer to the article, ‘Tough times for MAS’ in StarBizWeek dated, June 11 2011 and are pleased to share our response.

 

Malaysia Airlines (MAS) is clear and focused in terms of its direction and strategy moving forward, especially in terms of maximising revenue, sustainable profitability and sound operations. On track with the Business Transformation Plan 2 (BTP2) , we are continuing with our product enhancement plans and cost efficiency exercises, targeted at being operationally sound, with a focus on safety and customer experience at the core.

 

To be clear, our focus is on the full service market, and although there is encroachment from the low-cost carriers (LCCs), the very price sensitive traveller is not our target market segment.

 

We have begun our fleet renewal process, with the new B737-800 and A330-300 aircraft being delivered. The product we have on both the new fleets is a big improvement on our existing aircraft and demonstrate our commitment to high quality experience for our guests.

 

We have improved many aspects of our service elements, such as the food on board and in our lounges. We introduced a new check-in experience for our First and Business Class customers in KL International Airport. For First Class and Enrich Platinum passengers, we have Chef on Call, which provides them with a diverse menu selection that includes items such as lobster and caviar as well as local favourites such as nasi lemak and roti canai.

 

We have improved our service on the ground, such as at our check-in counters, incorporating elements of training from our world renowned cabin crew.

 

New on the table is the introduction of a concerted branding campaign aimed at being a preferred brand among the airline’s target segments. While this is being done externally, an internal customer-oriented culture is being nurtured among all our 19,500 employees to maintain our unique service delivery to our customers. A series of training and motivational programmes are being rolled out to achieve this aim.

 

At MAS we aspire to be the No. 1 Airline in Asia by 2015. We want to be the preferred carrier in Asia in terms of products and services, and we are not far off to achieve this – we already have the World’s Best Cabin Crew and would have one of the youngest fleets in the world by then. Being No. 1 here is not in terms of size. We do not aspire to be the biggest airline in Asia, but one of the most successful.

 

We have indeed come a long way. We are on track with our BTP2 initiatives and have embarked on an internal transformation exercise and an external brand building campaign.

 

The turnaround plan was focused on short-term measures which gave quick results but were not necessarily sustainable. Our focus in the transformation plan is to put in place initiatives that may take longer to execute but which will have a more sustained impact to the company.

 

Being perhaps one of the few truly international business entities in Malaysia, MAS is impacted by most global events, more so than any Malaysian carrier.

 

Let’s look at the numbers for the first quarter (Q1) of 2011. Capacity was planned for 11% increase at a time when the fuel costs were US$90 per barrel. When we planned the capacity increase last year, we had planned for a fuel price increase, but the Middle-East crisis raised the fuel costs unexpectedly to US$130 per barrel. Foreign currency movements, which accounts for more than 60% of MAS’ revenue, had impacted our top line. Despite all these factors, our non-fuel unit cost was down by 6%.

 

Our commitment to improve efficiency and eliminate wastage continues and without this, we would not have been able to reduce our unit costs to this extent.

 

As capacity increases, the new capacity introduced will take time to mature and fulfil its potential. In the short term, load factors and/or yield for the additional capacity will be lower than average but will improve over time.

 

Despite this 11% capacity increase, our unit revenues were stable with a small 1% drop. However, given the significant increase in fuel prices, we were badly impacted.

 

Revenue management is an important area for us, and our efforts to improve this area continue. One of our key initiatives is to introduce a new method of doing revenue management (origin and destination revenue management) which is expected to boost revenue by over 1% per annum.

 

Given that our annual revenue is over RM10bil per year, a 1% boost is significant. This method is being used by many carriers such as Lufthansa, Singapore Airlines and Cathay Pacific and we are implementing this in 2011.

 

The airline has in recent years pushed the envelope which resulted in us achieving many technological innovation “firsts” such as the MHmobile (which allows booking and checking using a 2D barcode and Enrich status enquiries among others) and MHBuddy (the first social media application that allows on-line bookings and check in on Facebook, as well as sharing travel itinerary with friends).

 

Similar enhancements using various channels and social media tools were also introduced for better customer experience such as augmented reality applications, MHdeals and Going Places (the monthly in-flight magazine) on the iPad.

 

We are proud to have been given rave reviews for more than just our cabin crew. Among the recent ones were the “World’s Leading Airline to Asia”, “Asia’s Leading Airline” and “Asia’s Leading Business Class Airline” awards by World Travel Awards 2010, United Kingdom. However, we are focused not so much on awards but on the overall experience for our customers.

 

We were recently invited to join the acclaimed oneworld alliance, and are now a member-elect. Oneworld does not have as many members as some of the other alliances, but is more selective and emphasises quality rather than quantity of members. We expect this alliance membership to bring significant benefits to MAS and also to the country as a whole.

 

From a customer standpoint, there will be more seamless connections to destinations where MAS does not fly and foreign customers can connect on MAS’ flights more easily. This will encourage more travel on MAS.

 

Oneworld customers will get frequent flier points on MAS as well as other member airlines. The same applies to Enrich members, who will get points while travelling on any oneworld airline.

 

Thai Airways and Singapore Airlines who are already part of an alliance have been using their member airlines to bring in foreign tourists into their countries. With the oneworld alliance membership of MAS, tourism into Malaysia will be enhanced and Kuala Lumpur will be considered more as a hub.

 

Market share increases

 

Firefly was more of a strategic move. While MAS is focused on the full service segment, the introduction of the jet service for Firefly is intended to give the group a foothold on the price sensitive segment of the market.

 

Firefly already has a good franchise in Malaysia and although it is competitively priced, it provides a good customer experience for this segment of the market. It is growing quickly and gaining a lot of momentum.

 

As the market develops, we will see Firefly gaining more market share at the expense of the incumbents, including MAS. What is important for us is that the group’s market share increases, and since Firefly jet operations started in January, we have seen that steadily happen.

 

From a group perspective, MAS concentrates on a more premium segment whereas Firefly covers the price sensitive segment.

 

We were clear from the beginning that the operational management of Firefly is done separately so that MAS is not trying to do both and that both brands are clear on which sectors they are targeting.

 

MAS has clearly stated that it is aiming to be the preferred airline of its customers by 2015. This target is aimed at being No. 1 in the hearts and minds of our customers, not in terms of market share or the largest fleet.

 

In its quest to become a preferred brand, MAS has embarked on studies to understand its customer segmentation and focus on their needs.

 

This move enables us to focus on delivering many advantages to our target segments. In this way, not only are we able to please our target segments, we become more efficient and focused, while maintaining our own unique identity.

 

As for sustainable profits, the airline is on track with its strategies to transform the airline to become consistently profitable. In the background, many transformations are taking place.

 

Enhancing IT systems, reviewing processes and introducing structural changes will slowly but surely strengthen the airline’s operations and people.

 

In the short term, we are reviewing our capacity and our sales and revenue management strategies in order to return to profitability.

 

The difference between turnaround and transformation is that turnaround is fast but does not last. A transformation takes more time to implement, but it either leaves a lasting impact or creates a lasting change. Therefore, the latter is harder to do, takes more time but creates more impact in the long run.

 

There are many suggestions out there on what MAS should do or is not doing. We appreciate suggestions and it demonstrates the extent to which Malaysians care about MAS. Here are the facts:

 

·MAS is focused on carrying out the BTP2 plan. Re-fleeting and alliance is part of the transformation plan

 

·MAS and Firefly jet operations target different segments. As a group, our market share in domestic travel has increased since the jet operations started in Firefly. This is at the expense of other airlines in the domestic market.

 

·Capacity and route planning is long-term as the airlines sell pre-loads at least 6 to 12 months earlier than travel time. We are subject to shocks such as the Middle-east crisis, which has unexpectedly driven fuel prices up. We adapt, but due to the lead times, results are not instantaneous.

 

·Cost reduction – MAS has already reduced its unit operating cost by 6% for Q1 2011. We are more than confident that our target of a cumulative 15% reduction by 2015 is achievable.

 

Thank you,

 

Tengku Datuk Seri Azmil Zahruddin

 

Managing Director/

 

Chief Executive Officer

 

Malaysia Airlines

 

Source: http://biz.thestar.com.my/news/story.asp?file=/2011/7/2/business/8988526&sec=business

[BC Tam 2]

– we already have the World’s Best Cabin Crew .....

Poof - tada lagi !

Sorry Tengku, try again ?

[flee 5]

The reply may be lengthy, but I don't see anything new being said that we do not already know. So I remain unconvinced that MH has what it takes. Many of us have already criticised the 30" seat pitch on the new B738s as a backward move and not an improvement as the Tengku claims.

 

Perhaps the next plan they will have to implement is a rescue plan!

Edited July 2, 2011 by flee

[BC Tam 2]

..... all our 19,500 employees .....

Could this be an indication of (at least) one ailment ?

[dean hizudy 0]

Poof - tada lagi !

Sorry Tengku, try again ?

this meant they have "once"...doesnt meant they said "currently"

[Andrew K 0]

http://www.youtube.com/watch?v=qcK4-ET53fA

[filipeseda 0]

One has to suspect that this lies in revenue management. Perhaps it does not have enough business class or first class seats. Perhaps it has got its pricing wrong and is cannibalising some of its own market via cheap offerings and through its low-cost airline, Firefly. Perhaps it has given up too many routes to be able to grow rapidly.

 

Perhaps, MAS has become so obsessed with cutting fares and offering value comparable to low-cost airlines that it is losing its own high yielding market by people who book earlier to take advantage of lower fares.

 

 

Quite accurate. MAS is just digging a grave for itself with FY. The market is not big enough to sustain the multitude of LCCs and furthermore, MAS just doesn't know where it stands. What is a 5-star value carrier. MH, you are a premier airline, get that through your head.

 

Yes, one must agree that new airplanes are more cost efficient and that could make the difference between profit and loss, but does that imply that MAS has been negligent in its fleet planning?

 

 

BERTIA 101: Yes it has

[KC Sim 2]

Quote: We have improved many aspects of our service elements such as the food on board ....

 

What??? I thought it went the other way. Or was I booked on MH to LHR last year and flew another airline without realising it?

 

I have to agree with Francis Lee that there is absolutely nothing new in this response, nothing to show that the MH management has grasped the roots of the airline's problems - let alone solve it. And it is still singing the "Best Cabin Crew" song ... talk about being deluded.

 

Now more than ever, I am sceptical about MH's future. While its competitors have moved on to ordering the next generation of airplanes, MH is still highlighting its A330-300 order as a banner for its efforts to become No. 1 airline (in Asia ... no longer in the world?).

 

And about oneworld having fewer members because it is more "selective" . . .

This must certainly be the funniest thing I have heard in a very long time. Qantas is deeply entrenched in all manners of problems and expect some dramatic new strategic directions to be announced on Aug 24. JAL was bankrupt and in the process of turning around, Mexicana was bankrupt, Malev and Iberia are all far from healthy - the latter at least is in bed with BA now. So much for being selective.

 

If not for all the threats of penalty, JAL would have left oneworld to migrate over to Skyteam. The airline had actually already made that decision before all the threats came flying in all directions.

 

It would be great to archive this thread and years from now, we should scritinise the response from MH and see if the airline is able to achieve its grand goals. Meanwhile, MH's CEOs words are perhaps very calming for its own staff and the less informed investors.

 

KC Sim

[filipeseda 0]

At MAS we aspire to be the No. 1 Airline in Asia by 2015. We want to be the preferred carrier in Asia in terms of products and services, and we are not far off to achieve this – we already have the World’s Best Cabin Crew and would have one of the youngest fleets in the world by then. Being No. 1 here is not in terms of size. We do not aspire to be the biggest airline in Asia, but one of the most successful.

 

 

It won't be unless you replace those B777s or refurbish. And, as much as I agree that having a monstrous fleet isn't the main determining factor, MH should also bear in mind that it is now part of an airline alliance, meaning that it should provide network enhancements to the existing OW network, which I don't really see from the exisiting MH network. And, given that MH is facing direct competition from TG and SQ, essentially they're catering to the same market, MH cannot afford to loose out in terms network, frequencies, etc. Furthermore, given that MH is catering to the full service market, premium travellers tend to look at such things when choosing which airline to fly. a) Mileage Does it go where I want to go and have a reliable frequency.

 

This must certainly be the funniest thing I have heard in a very long time. Qantas is deeply entrenched in all manners of problems and expect some dramatic new strategic directions to be announced on Aug 24. JAL was bankrupt and in the process of turning around, Mexicana was bankrupt, Malev and Iberia are all far from healthy - the latter at least is in bed with BA now. So much for being selective.

 

 

AA is by far the worst US legacy carrier. Last year, close to 2000 flights were canceled because of their MD-80/90 aircraft that failed FAA inspection. Then of course LAN, which I believe by far is the healthiest, NOT BA, as it's ridding on the booming continent and of course dear all and mighty CX. Malev was saved by the Hungarian g'ment btw. IB is just CRAP, horrible service standards. Then you've of course got Kingfisher, which is a good leap into the sub-continent, but then again, OW is still by far the smallest alliance.

 

Quite frankly, FY was a really BAD mistake! MH should be focused on beefing up its fleet and network, and not try to compete with AK and snatch its customers.

[filipeseda 0]

http://http://www.youtube.com/user/RoutesonlineTV#p/u/14/rHsLnbvGeFk

 

versus

 

http://http://www.youtube.com/user/RoutesonlineTV#p/u/16/AUc6_VwVZbs

 

oops, how to post videos?

[J. Suri 0]

I think those B777 are still reliable for next few years. the only things that MAS should do to those planes is to fully refurbish the interior with the latest products that available in the market!

[BC Tam 2]

this meant they have "once"...doesnt meant they said "currently"

Well, we could go into the gramatical intricacies, but that would veer us off topic somehow

(If anyone, cikgu Kenneth I reckon will be able to adjudicate)

Anyway, it's generally in bad taste to feed off past glories

To be fair though, that Tengku's response could have been drafted before the recent Skytrax awards announcement, I hope

[Mohd Azizul Ramli 2]

No, but probably this whole response was urged by someone by the name khalidkarim on 28 June, as per the following Tweets:

 

khalidkarim khalidkarim

@tengkuazmil must rebut the reports on MAS in the STAR. .is it as bad as its made out to be?Whois at fault if it is?

28 Jun

 

@tengkuazmil Tengku Azmil

@khalidkarim We will hv something in The Star soon

29 Jun via UberSocial for BlackBerry

 

khalidkarim khalidkarim

@tengkuazmil should do that...cos ppl must understand legacy u hv to live with

29 Jun

 

It also seems the video that Andrew K posted above is specifically done (based on its contents which is similar) to support this counter press release.

[flee 5]

I think those B777 are still reliable for next few years. the only things that MAS should do to those planes is to fully refurbish the interior with the latest products that available in the market!

I agree, many people over emphasise on the B772 replacement - the newest ones are only about 6-7 years old. What is more important is to use them for long haul (to Europe) only as the A333 is far better for deployment on Asian regional routes.

 

For the next 6-7 years, MH should use the B772 (after upgrading the tired old interiors) to complement the A380 on the long hauls. They should order the B787/A350 to replace them. So, 2016 or 2017 deliveries should be OK.

[jackch747 0]

the B777s are equipped with retro-PTVs. replace them if possible.

[filipeseda 0]

For the next 6-7 years, MH should use the B772 (after upgrading the tired old interiors) to complement the A380 on the long hauls. They should order the B787/A350 to replace them. So, 2016 or 2017 deliveries should be OK.

 

 

Totally agree with you. The entire cabin should be retrofitted with the A380 product. Perhaps there could be a mix of two and three class config.'s based on demand for the route.

[dean hizudy 0]

http://www.youtube.com/watch?v=qcK4-ET53fA

Nice video Love to see those MAS cabin crews in the old days or back then known as "Golden Girls"

[Mohd Suhaimi Fariz 2]

Quite accurate. MAS is just digging a grave for itself with FY. The market is not big enough to sustain the multitude of LCCs and furthermore, MAS just doesn't know where it stands. What is a 5-star value carrier. MH, you are a premier airline, get that through your head.

 

Take a look at recent MH ads and you'll find that the 5-star Value Carrier is no longer mentioned anywhere in the ad. And I disagree that FY's digging MH's grave. In fact, FY IMO is MH's saviour, as they could now consolidate their domestic market to several key routes, while hiving off the rest to FY with its lower cost base.

 

Right now MH needs to beef up on its revenue management by getting more people, the right people into the department. From what I've heard from an acquaintance of mine who's in RM, they're stretched pretty thin right now.

[BC Tam 2]

Take a look at recent MH ads and you'll find that the 5-star Value Carrier is no longer mentioned anywhere in the ad

Oh wow, they changing the advertising tag line at long last ?

Maybe they can now change one particular billboard advert we have in KK - 5 star carrier, best cabin staff, value carrier etc all crammed in

Together with proclamation that MH flies direct to Singapore and Guangzhou (how deep in history is that already ?!)

Osaka too, even during time when BKI-KIX was not done

[Mike P 0]

The video is quite meaningful!

[filipeseda 0]

The video is quite meaningful!

 

 

For some reasons the FIDs only display 3 (actual/non-codeshare) MH flights (SIN, SBW & DEL) and does little to show that MH is all over the world.

[filipeseda 0]

Embattled Malaysia Airlines in $8 bn fightback

By M. Jegathesan (AFP)

 

KUALA LUMPUR — Under siege at both the budget and high end of the air travel market, Malaysia Airlines is fighting back with a multi-billion-dollar fleet renewal plan in an effort to secure its future.

 

Analysts say that in recent years the company has been overshadowed by its aggressive upstart rival, Malaysian budget carrier AirAsia, while Singapore Airlines and others remain formidable competitors in the business sector.

 

A few years ago Malaysia Airlines was on life support, forced to sell off its headquarters, slash unprofitable routes and fire thousands of staff to avoid bankruptcy.

 

In 2005 it racked up losses of 1.3 billion ringgit ($386 million) over nine months, a dismal performance that forced the introduction of sweeping reforms which saw the airline swing into the black in 2007.

 

Now the state-owned carrier is looking to build on the recovery with orders for six long-haul Airbus A380 superjumbos, plus 25 Airbus A330-300s and 45 Boeing 737-800s for regional use, with an option to buy 10 more of the US model.

 

In all, the bill comes to $8.4 billion.

 

"By 2015, we will have one of the youngest fleets in the world," the flag-carrier's managing director, Tengku Azmil Zahruddin Raja Abdul Aziz told AFP in an interview.

 

The firm has already received five Boeing 737-800s and three Airbus A330s, while the first A380 will arrive in the second quarter of next year, he said.

 

The double-decker superjumbos, the world's biggest commercial passenger plane, will be used to serve cities such as London, the airline's most lucrative destination in Europe.

 

"What we need to do is to be the best airline serving out of Kuala Lumpur," said Tengku Azmil. "That is what we want to do."

 

The purchases were part of an ambitious "multi initiative strategy" that also includes reducing fuel and maintenance costs and seeking more market share, he said.

 

"It is a major refleeting programme. The new aircraft will have better fuel efficiency, low maintenance, higher reliability, so we actually will be able to further reduce our unit cost. The aim is to increase the margins."

 

But aviation experts said Malaysia Airlines faces strong headwinds.

 

AirAsia, launched less than 10 years ago, now already flies to 78 destinations, with its long-haul arm AirAsia X covering another 11, while 64-year-old Malaysia Airlines has more than 110 airports on its route map.

 

Other prominent low-cost carriers including Jetstar Asia also serve the region, and Singapore Airlines said in May it plans to launch a new medium- to long-haul budget subsidiary within a year.

 

At the other end of the market, the city-state's flag-carrier and Hong Kong-based Cathay Pacific are major global operators favoured by business travellers.

 

"In the business segment, they (Malaysia Airlines) are not in the position to compete with Singapore Airlines" because of the size of its network, Shukor Yusof, an aviation analyst with Standard & Poor's Equities Research told AFP.

 

"In the economy section, they are losing out to AirAsia."

 

"Absolutely, AirAsia has overshadowed Malaysia Airlines. AirAsia has been eating away their business from day one."

 

Shukor, who is based in Singapore, pointed out that despite a staff of 19,000 people, Malaysia Airlines was not as productive as AirAsia, which has around 4,500 employees.

 

"In a nutshell they have been slow to ride the market. Asia was performing better two to three years ago and they did not do much to take advantage of it," he added.

 

But Chris Eng, head of research with Malaysian brokerage OSK Research, welcomed the aircraft orders and said the carrier should focus on preventing its loyal customers from leaving.

 

"Malaysia Airlines' efforts should be to contain any bleeding of full-fare passengers to other full-service carriers operating via Singapore or Bangkok," he said.

 

As it happens, Tengku Azmil agrees. "In terms of business traffic Singapore has naturally more business traffic than Malaysia. We do not have that many business class seats like Singapore Airlines," he said.

 

"It will be a mistake for us to become like Singapore Airlines. Singapore Airlines serves a different market."

[Mike P 0]

I will continue to fly MH if its product and services as well as pricing remained competitive to other airlines. I rather pay a bit more to fly on MH to receive quality services than taking AirAsia, especially to long haul destinations!

[KK Lee 5]

Despite VSS in the past, believe MH is still burdened with redundant employees. If one board flight at KUL which ground handling is by MH will find there are a few MH personnel standing inside the aerobridge looking at pax boarding.

 

KUL may have fewer MNC than SIN but as a airline, MH is supposed to tap travelers thought out its network. Instead of blaming on smaller O&D premium pax base, MH should find out why MH attracts fewer connecting premium pax and regular travelers on its network.

 

Friendliness is very subjective. Most if not all people will find people from his own culture more approachable and friendly. Hence, most people will agree; Malaysian crews at SQ and EK are equally friendly as MH crews. MH PnL has shown, by emphasizing the best and the most friendly cabin crews won’t attract enough pax or revenue to make profit.

 

FY as an independent company may have a lower overhead and operation cost. After MH transferred a number of routes to FY means MH has surplus aircrafts and crews. Until MH put these aircrafts and crews in revenue flight, MH overhead actually increased.

 

After joining OW, Aussie based OW members may consider to use MH to FRA, CDG and FCO. However, MH may need to provide daily or double daily to lure these pax. Given 772 is oversized on these routes, not sure how MH can turn the opportunity into profit.

 

Until MH understand what premium pax and regular travelers want and change to adapt, expect MH to go thought BTP every few years

Edited July 3, 2011 by KK Lee

[KC Sim 2]

MH's membership in oneworld is like an empty promise if Qantas and British Airways do not operate to Kuala Lumpur. I don't think a passenger travelling from an Australian city to Frankfurt would want to fly to SIN on Qantas or BA, then connect on MH to KUL to change onto another plane to FRA.

 

I don't think Cathay Pacific is too keen to transfer anyone to MH if it is able to take these passengers further towards their final destination.

 

KK Lee is totally spot-on about not blaming the smaller number of MNCs and lower O&D premium traffic ... it could easily have positioned itself to carry such traffic heading to SIN or BKK with a stopover in KUL. The same way SIA tap such traffic through SIN to KUL, BKK, CGK, Australia etc. Just look at what the Middle-eastern trio - Emirates, Qatar and Etihad - have done.

 

About having the youngest fleet by 2015 ... I am not sure about that. If the B744s and B777s are still in the fleet, they will make this claim a little harder to achieve. And don't forget that the competitors around Asia have by then also added new planes and shed old ones. SIA for example would have csst off all of its B744s, probably a good number of B772s and added a whole lot of A333s and perhaps even receive its B787-9s.

 

MH really need to raise productivity ... when I checked in for my flight from KUL to LHR in December last year, there were three persons working at the check-in counter (compared to one in SIN) and as earlier mentioned by KK Lee, there are too many staff at the boarding gate. I counted at least six with a few more in the aerobridge. If there weren't supposed to be there and just happened to be in that area, they then are too free and were able to get away from their workplace somewhere else in the airport.

 

On a flight back to SIN in late-December 2010, I went to the gate which was supposed to have opened an hour before departure ... but that was not the case. The security staff or police manning the scanning machine were sitting there - one was eating and another was texting on his mobile phone while another walked between the two sharing what seems like a joke. And there were four female ground staff in their kebayas - sitting and chatting. Minus 45 minutes, and they still keep telling passengers that the gate is not yet opened. They eventually admitted passengers about 38 minutes before departure ... I could see some passengers shaking their heads in disbelief ... but thankfully the cabin attendants on the B737-800 that day were there to salvage whatever is left of Malaysian Hospitality.

 

If the MH spirit is willing to improve, it probably is a case of the flesh being weak. Until the airline is able to rein in its ground crew to work better, that continues to be its weakest link. I personally have experienced very bad attitudes at check-in especially - include the time when I was a guest of MH at the launch of the Hibiscus B744 ... the chaperone from MH offered to re-confirm our flights (although I wondered why it was even necessary because by then, most airlines have done away with that function). We (a group of media people) thought it was perhaps service beyond the call of duty and saluted the effort. At the check-in counter, I was told that my booking was cancelled (the same day that the staff offered to reconfirm it). I asked if the booking could be re-instated and was told that she needs authorisation for that. I asked her to contact the public relations department of MH, as I was a guest of this department. Unwillingly, she made a call using a number I provided ... put down the phone, walked away to speak to another staff (obviously this has nothing to do with my situation as they were both laughing and speaking casually). She returned and told me that my booking has been reinstated, but I still have to wait for flight to close before she could check me in. I asked if the flight was full and she said no. I asked if there were perhaps just a few seats available to BKK and she noted that there were quite a lot of seats available ... and only when I threatened to call the PR head directly to register my displeasure did she reluctantly check me in and thrusted the boarding pass at me without a single word.

 

When I boarded the flight back to Bangkok, the plane was less than half full. Thankfully, this was a one-off bad experience but it left an indelible mark on me.

 

KC Sim