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Kenneth T

RM0 fares from Malaysia Airlines

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But you seem to agree though that MAS is going the LCC way ?

 

Yes, it is a terrific opportunity for the flying public - that much is undeniable

 

Bear in mind though that MAS is by and large Malaysian Govt owned and controlled - meaning theoretically you and I included, provided you're Malaysian. With the resources made available (by you and me, if you subscribe to that line of thought) of years gone by, a certain brand identity was created, nurtured and held in quite good esteem by the industry players - and at a cost too if it needs reminding

 

But now, by seemingly going along the LC path, all that effort and investment in brand identity goes down the drain. If ever it is to be resurrected, the cost will be very substantial, and believe you me, we as in us Malaysian tax payers will be paying for it in one manner or another ( :) ) Certain member(s) may dispute this assertion though :)

 

But most bewildering is why there is a need for a govt owned entity (MH) to try and compete to such an extent versus a private enterprise (AK) Presumably the ultimate aim of all business competitions is for your opponent to capitulate and go out of business, so you have a bigger market share or in the local scenario, a virtual monopoly. What will happen to air fares then ? :)

 

 

Sorry, I'm probably going to get flamed here, but I don't think MAS is going the LCC way. They still have assigned seating, lounges (which have been given upgrades, e.g. regional lounge at the contact pier), a business class, a first class, FFP, IFE, and unless that all disappears, they're not even close to being an LCC or following the LCC path. The only thing that hold your argument about them becoming an LCC are their fantastic RM0 tickets, ohh... and snek boxes (even that, its only offered in regionals and still trying to gauge responses, the boxes are designed quite nicely which I doubt an LCC would've even bothered with such packaging).

 

Death of MH brand identity, I doubt it.

 

In fact, if they do this correctly, they could bring in some new passengers who have never flown MH and might in the future be able to afford MH fares as an alternative (read: University Students, Mak Ciks who'll make it big exporting keropok to Tajikistan), heck they can easily win some over with MH service, especially with the civilized boarding procedures, the attention to detail and all the other frills so lacking in AK. MH has never been an option to a lot of the flying public, what better way to promote the brand than giving ordinary mat's and beng's the ability to fly them once in a while.

 

I'm stoked about the low MH fares! What I'm wondering is why MH didn't use Firefly as their vehicle for RM0 fares? Why the intense media coverage?

Edited by Mohd. Helmi

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Thinking of booking KUL-PEN-KUL to waste my morning in KL. (I arrive on Jul 06 2330 in LCCT and leave on 1640 on Jul 07 also in LCCT. )

 

The only problem is the flights i've selected leave KUL at 0915 and the return frm PEN arrives at 1255. Is it safe for me to assume I \will be able to catch the RM1.50 shuttle at 6am frm the LCCT and will my return flight leave me enoough time to dash to the LCCT without taking a taxi.

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I think their booking engine is down now.

 

No problems with me just now. \

 

hmm.. they have 1Mil tickets being given out, the booking period is until 19th May. you can always try tomorrow?

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not bad , I can actually c some of the amazing 0 fares offered by mh ....... well i just cannot think of or have a available date to travel <_ ......>

 

surprisingly , when i was watching football via ESPN , i was amazed by mh , they even got advert there :D , kudos mh :good: , good sign from u all ......

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Some of you guys here are just weird, high fares are complained about, 0 fares are still complained about. Has it ever occurred to you that MH is just promoting their flights, and instead of spending millions in other forms of ads, just return the savings to the pax by offering zero fares. Someone can even call for a BAN on such promotions, misleading yes, if you do not read or listen very carefully. Now i understand what did the then CEO of BMW Malaysia years ago say about Malaysians : "They can never stop being critical about themselves."

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Some of you guys here are just weird, high fares are complained about, 0 fares are still complained about.

 

Exactly what I was thinking.

 

If they can make it work, it'd be a win-win situation for both consumers and the airline, no? :)

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‘Malaysia Airlines has reportedly allocated up to 30% of its seats on Southeast Asian routes for “very low fares” and plans to offer one million free domestic seats’ means current MH regional load factor is about 70% and there are over one million empty seats on domestic route.

 

Load factor of 70% is below MH operating breakeven point. Any additional surcharge collect to cover fuel, snackbox and variable cost is a contribution to the bottom line.

 

We praised the management to take this drastic (or desperate) step but short term measure to reduce losses. However, we are more keen to see how the management is to attract high yield customers back to MH.

 

If the above analysis is correct, bet teh tarik that IJ won’t renew his contract. And also bet my 2 cents another round of cost cutting is on the book.

 

:drinks:

Edited by KK Lee

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Exactly. I'm sure it's interesting for an insider with all the actual info to read all the 'wild guesses' and analysis of 'MH ceo's wannabes'.

 

On a different note, the ad shown last night was really a 'berita gempar'. when the tv3 newscaster mentioned that Idris Jala is annoucing a breaking news, the 1st thing that came in my mind was "something bad had happened to one of the planes". Thank God it's good news instead :) ohh yeah now you can see both CEOs 'acting'. Idris Jala in MH TVC last night and Tony fernandes in the film Cuci. hehe

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I bet the marketing & sales folks at AK are having a "crisis" meeting this morning. Now, how would AK counter this? Pay us to travel on AK? a buy 2 get 1 free?

 

Great that MH is not leaving AK to control the domestic front. If only Idris had been more careful with his words and not say "5-star" in the marketing pitch...should've have just used the hospitality mantra and full-service carrier terms (reserved seating with paying more, 20kg, no checked baggage fees bla bla). (MH is no longer the 5-star carrier of yesteryears.)

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I bet the marketing & sales folks at AK are having a "crisis" meeting this morning. Now, how would AK counter this? Pay us to travel on AK? a buy 2 get 1 free?

...

 

The last thing we want is for AK to be killed off, then we are back to square one - a monopoly with no LCCs around.

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On a different note, the ad shown last night was really a 'berita gempar'. when the tv3 newscaster mentioned that Idris Jala is annoucing a breaking news, the 1st thing that came in my mind was "something bad had happened to one of the planes". Thank God it's good news instead

 

Yup, I had that impression too for a split second. I did think that MH has just lost a plane, like a 747, with many casualties. Well, he did grab our attention, which was the intention..."guerilla warfare" on AK it seems.

 

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i actually found the ad in the star today quite amusing..the one replicating the AA ad being torn off..looks like MAS is going all out against AK with this aggresive campaign..

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Why everyone seems to get the LOW FARES, but the system still appears normal fare for me?

 

Not applicable for school hols season. That's why you see normasl fares! :pardon:

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Server down.. Overwhelming response.. Aren't they surpose to be ready to be overwhelmed!!?? It's not going to be easy getting those Rm0 fares..

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Wonder why the campaign is so big this time. Because this is the very core of Five-Star Valued Service Carrier (FSVSC) , that is to be turn into a somewhat a "hybrid" airline.

 

The airline will still be full-frill but will allocate a low cost market (max 30% of passengers) in their flights. Hence, this low fare will be a permanent feature (maybe the RM0 fare will not be permanent, but it will mirror AK fare), and there will be a flexi-fare which will be the normal premium fare we have now, plus the business class fare. Hence, a maximum of 30% will gain accessed to the full frill ala MAS and to keep it profitable, 70% of customers will subsidise the 30% low fare paying customers. Furthermore, the service offerings will be reduced (or has been reduced, in terms of number of crew, snackbox, closing of sales office, etc) to reduce the cost further.

 

Yes it is a win situation to the low cost segment of the pie, as now they can fly a full frill service with low fares, but what about those paying premium in accepting those masses. Not to say that low paying customers are different, but their attitude is different compared to those who normally fly full frill. (I am sure most of you have realised what I mean by these differences). Furthermore, those paying normal fares have to suffer having lower than normal services in expense of the 30% of low paying segments, and hence these customers may jump their wagon to other airlines. At the end we may end up having 30% paying low fares, while only maybe 30% who are willing to stay loyal with MAS, while 30% resorting to other full-frill airline serving superior quality for the same price.

A lost of 30% of premium paying passengers will be a big lost to MAS ok?

 

Thats my analysis. Its good for a short term measure to fill up the gap, but for a long time measure, how would MAS suffer with premium paying passengers jumping on their wagon??? Is this hybrid pricing will work? It remains to be seen.

 

My 2 cents.

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RM0 fare campaign will bring in more pax, revenue and contribution to the bottom line but not for long term. Prolonged RM0 fare campaign will shift higher fare pax (those have flexible schedule) to lower fare segment. Those travel on very low fare is likely to abandon MH for AK if fare is higher. Hence, extended offer will ended up with empty seats and lower yield.

 

Incidentally, this RM0 fare campaign is a reversal of IJ’s yield improvement program. Eager to read MH’s yield in the next financial report.

 

Believe it is more important for MH to keep and increase high yield pax. With lower yield expected, wonder how MH going to improve service to keep high fare pax happy.

 

Look like MH is on a low yield, low service level and self destructive viscous cycle.

 

:drinks:

 

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"MAS: No Plan To Introduce everyday Low Fares Outside Asean

 

PETALING JAYA, May 5 (Bernama) -- Malaysia Airlines (MAS) has no plan to introduce its "Everyday Low Fares" campaign outside the Asean region, managing director and chief executive officer Datuk Seri Idris Jala said Monday.

 

"We have no intention to do that. If you look at many of our loads for international, they are pretty good. If you look at New Zealand, Europe and Australia, the loads are good," he told reporters after the launch of the campaign here Monday.

 

Idris said the campaign was offering one million zero fares for all its domestic destinations to enable Malaysians to continue travelling and boost tourism.

 

Zero fares means that the passengers only pay airport tax, fuel surcharge and administration fees.

 

The campaign is valid for travel between June 10 and Dec 14, 2008, with the booking period from today until May 19.

 

Customers must purchase the tickets online at least 30 days before flight departure, MAS said.

 

These tickets are non-refundable and the flight dates could not be changed, he said.

 

All fares exclude airport tax and surcharges, RM76 (one way) for domestic travels and RM120 (one-way) for travel between West and East Malaysia.

 

"Customers will enjoy our five-star services, including refreshments on board, convenient schedules, on time departures, 20-kilogram baggage allowance, allocated seats and many other benefits," Idris said.

 

"It (the campaign) was to create new demand. We wanted to do it last year but we were not confident. Now we are confident to implement it. It is excellent for the industry and tourism, both local and within Asean," he said.

 

Asked how this would benefit the airline, Idris said: "Customers could enjoy low fares and five-star services while we fill up our planes. We are not losing any revenue from this as the seats represents 30 percent of surplus seats which would otherwise be unsold."

 

He said the national carrier would introduce a similar campaign for its Asean routes this month.

 

The routes include Kuala Lumpur to Jakarta, Bangkok, Manila and Surabaya, and low fares from Penang to Singapore, Kota Kinabalu to Singapore, Langkawi to Singapore and Kuching to Singapore will also be offered.

 

MAS subsidiary Firefly is also offering zero fares for its routes.

 

-- BERNAMA"

 

 

""We have no intention to do that. If you look at many of our loads for international, they are pretty good. If you look at New Zealand, Europe and Australia, the loads are good,"

 

By the above statement, Idris is implying that loads on MH's domestic and ASEAN are NOT good, and hence, this promo.

Maybe it's the vintage 737s and snackboxes which are frightening the hi-yield pax? :-)

 

 

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