MAS a hybrid career!

[Azri M. 0]

MAS a New Breed of Hybrid Carrier: Idris By Kang Siew Li

 

ISTANBUL: Malaysia Airlines (MAS) said it has evolved into a new breed of hybrid carrier, which blends the traditional full-service carrier traits with that of low-cost carriers (LCCs).

 

"We continue to offer our customers five-star services, but at the same time competitive and affordable fares. Once you start doing that, you enter into a different league," MAS chief executive officer and managing director Datuk Seri Idris Jala told Malaysian reporters on the sidelines of the International Air Transport Association's (IATA) 64th Annual General Meeting and World Air Transport Summit here.

 

He described MAS' current business model as being between full- fledged full-service airlines such as Cathay Pacific Airways and Singapore Airlines (SIA) and LCCs like AirAsia Bhd.

 

"Today no (network carriers) has done what we have done Take for example our .'Everyday Low Fares' campaign. We are creating a new market, attracting people who have never flown on MAS or AirAsia before and I predict this market to be quite big," he added.

 

Previously, moves by MAS including the introduction of meal boxes for economy class passengers on its regional short-haul flights and the "Everyday Low Fares" campaign had brought confusion over the national carrier's business focus and were seen as moving away from the business model that made it successful.

 

At the same time, AirAsia has called on the carrier to stop competing in its market and concentrate on the premium, full- service market.

 

"The airline industry's operating environment has become very tough and most airlines recognise that this is the worst in the history of the airline business. I believe we can overcome this difficult period, but we have to be relentless about reducing our costs from where we were before. We must choose a different game (to remain competitive and sustainable)," said Idris.

 

On Monday, IATA chief Giovanni Bisignani had warned that tough times were ahead for the global aviation industry and rocketing fuel prices have forced the world airlines group to downgrade its industry profit to a loss of US$2.3 billion (RM7.4 billion) based on an average oil price of US$106.5 (RM344) a barrel.

 

Idris said MAS' five-year business transformation plan (BTP2) plays a key role to ensure the carrier pulls through difficult times.

 

"We will expedite (our BTP2) even more. Although we have successfully turned around, if we run our business as it is now, we will not be able to weather the storm because oil prices have gotten so high. We have got to transform ourselves and quicken the pace," he added.

 

On losing its premium customers to full-fledged airlines such as Cathay Pacific and SIA as they continue to improve their premium products while MAS focuses on reducing costs, Idris said MAS would buy new aircraft as part of its long-term plan to provide for market growth and for replacement of existing aircraft.

 

It has ordered 35 new 737-800s with an option to buy 20 more, of which the first will be delivered in September 2010. However, it is reviewing its plans to buy new wide-body planes to replace its ageing B777 and B747 fleet because of high fuel prices.

 

"But between now and 2010, we have to be content with the existing fleet. (To ensure that we do not lose our premium customers), we are spending money to refurbish the cabins of all aircraft with new seat covers and carpets. We are also changing the crew's uniform to make it more contemporary but still keep the batik and kebaya. The colour will be brighter.

 

"It will be a cosmetic change, not a total retrofit as that will involve a lot of money and would require five to seven years to recover the cost. The target plan is to complete the entire exercise by the end of January next year," he said, adding that the exercise will be funded internally. Its cash reserve currently stands at RM5 billion.

 

"In the course of next year, we are also looking at introducing other projects that will be good for the customers," said Idris.

 

 

 

He did not answer the questions on how to prevent losing the premium market. Don't tell me having newer cabin and newer flight uniform will cause them to come to MAS in drives... Sigh... my prediction is correct.. MAS is heading to be hybrid..

Edited June 5, 2008 by Azri M.

[Ewan Shamsudin 0]

Hybrid 'gapo Mat Yi? Hybrid CAREER?

Jago sikit spelling. Confuse kawe.

[Ivan L. 0]

Hybrid? Nothing new here.. That is very much like what UA, AA, and their American counterparts have offered..

[Ryan Soh 3]

On losing its premium customers to full-fledged airlines such as Cathay Pacific and SIA as they continue to improve their premium products while MAS focuses on reducing costs, Idris said MAS would buy new aircraft as part of its long-term plan to provide for market growth and for replacement of existing aircraft.

Nice evasion tactic. Totally not addressing the issue at all.

 

"But between now and 2010, we have to be content with the existing fleet. (To ensure that we do not lose our premium customers), we are spending money to refurbish the cabins of all aircraft with new seat covers and carpets. We are also changing the crew's uniform to make it more contemporary but still keep the batik and kebaya. The colour will be brighter.

And this will help retain fleeing premium customers?????

[Izanee 0]

welcome to bolehland where everything is possible.

[Mushrif A 3]

I can't wait to fly on MH in J, so that I can experience the new seat covers (including unpleated curtains) and watch the crew going about in their brighter coloured uniforms....duh!

 

Just shows that IJ/ MH is running out of substance when it comes to addressing the premium mkt..

[affendi osman 0]

I'm thinking of Air Tahiti Nui, bright plane, bright crew uniform...

 

[Azri M. 0]

Carrier Career, Potato Potayto.. big deal...hahahha

 

Sorry.. my mistake....

 

HYBRID CARRIER>>><<<>>><<>>>

[KK Lee 5]

 

Guess IJ&co read ‘Blue Ocean Strategy’, creating new market segment and new business model. By sandwiching between legacy airline and LCC, MH is facing battle on two fronts. MH need to compromise to compete in both markets.

 

Only time can tell whether this new and untested model will be a success comparative to legacy airline and LCC. It is likely that MH will either end up in the best of both world or worst of both world.

 

Anywhere, this is a idea company/business strategy for MBA case study.

 

 

 

[V Wong 0]

Interesting! I read this in International Herald Tribune a few days ago. My understanding was some LCCs had evolved to become hybrid carrier to capture the business traveller, not premium carrier evolving into hybrid carrier. However, here, give everything your Bolehland twist and hey, you have got the World's First!

 

 

 

No frills? Full service? Meet the hybrid carrier

 

By Roger Collis

 

International Herald Tribune

 

Thursday, May 29, 2008

 

 

Does the travel trade really understand the travel market? This is my somewhat bemused reaction to a survey released this month by Sabre Airline Solutions, a services provider to the airline and travel industry. The global survey of 540 airlines concludes that of 123 self-styled low-cost carriers, 52 percent have evolved into a new breed of hybrid carriers, which blend low-cost traits with those of traditional, or full-service, carriers in the pursuit of business travelers, and 7 percent have become full-service airlines. A majority of passengers - 64 percent - travel on the hybrid carriers rather than on solely low-cost ones.

 

Murray Smyth, a vice president at Sabre Airline Solutions in London, said that low-cost carriers from EasyJet and Germanwings to AirAsia and JetBlue evolved to better "make a play for the highly lucrative business traveler." Only 41 percent of airlines in the survey have retained true low-cost characteristics, selling point-to-point routes on one class of travel with distribution through the Internet, Smyth said.

 

 

I would argue, to the contrary, that it is traditional network carriers that are shedding their full-service character by adopting the low-cost pricing model on short routes to compete with no-frills upstarts. It is hard to tell the difference in price or quality of service between, say, British Airways and EasyJet on European routes.

 

 

But we are seeing segmentation within the low-cost sector in Europe. While Ryanair remains brutally basic with minimal comfort and service, EasyJet offers optional frills, such as "speedy" boarding and the use of airport lounges, while remaining true to the no-frills philosophy.

 

 

No-frills carriers, modeled on the phenomenally successful Southwest Airlines in the United States, are characterized by high utilization of aircraft, low distribution costs through online booking, one-way pricing and extra charges, such as for food and drinks. The crucial challenge they have posed to full-service carriers has not been so much their low fares as their low one-way fares, allowing travelers almost total flexibility, and thereby attracting business as well as leisure travelers.

 

 

Traditional carriers responded to the no-frills challenge on European routes by abandoning their old pricing convention that low fares must come with onerous conditions deliberately designed to frustrate business travelers, and by matching no-frills fares, especially for late booking. Web sites such as BA.com and Airfrance.fr now show a range of one-way fares, allowing travelers to combine the best fare out with the best fare back.

 

 

Once one is in the air, there is not much to choose between EasyJet and cattle class in BA, with similar legroom in the same type of plane. BA provides only Spartan snacks and beverages; EasyJet has a good choice of drinks and sandwiches on sale.

 

 

So competition tends to be driven by the airport experience. No-frills airlines usually win here: often, they fly from smaller and arguably more user-friendly airports such as London Luton or Stansted, rather than the dreaded Heathrow.

 

 

Moreover, the term hybrid carrier begs the question of what you might call the hybrid traveler. The travel trade is wrong to assume that business and leisure travelers have a different set of needs and behavior. As I have often pointed out, neither category is monolithic. Business travelers range from "hard-core" (clinching a deal) to "soft-core" (attending a conference; combining business with pleasure). Corporate travelers have deeper pockets than others; individual and small-business travelers, for whom travel expenses are their bottom line, may share budget priorities with backpackers and package tourists.

 

 

And there is no shortage of high-end leisure travelers among the denizens of the first-class cabins.

 

 

The International Air Transport Association has launched a new travel site: www.iatatravelcentre.com. For an annual subscription of $25, travelers have access to personalized advice based on their itinerary that covers travel documents (passports, visas) and health issues, as well as airport taxes payable at departure or arrival, and customs and currency regulations. Frequent fliers can store their profiles and be advised by e-mail when regulations change that might affect their plans.

Edited June 5, 2008 by V Wong

[Tamizi Hj Tamby 1]

Wow This is definately a big suprise for me.

[Kenneth T 0]

It's just a mere talk until thing materialised in the future.

Edited June 5, 2008 by Kenneth T

[Andrew Lim 1]

I tot u were talking about hybrid career where you can hold two jobs at the same time e.g. you're both a flight steward and pilot...

[BC Tam 2]

..... where you can hold two jobs at the same time e.g. you're both a flight steward and pilot...

Multi tasking taken to the next level !

[Ewan Shamsudin 0]

I tot u were talking about hybrid career where you can hold two jobs at the same time e.g. you're both a flight steward and pilot...

That was exactly how i was confused too! Ha ha

 

Mr tam, remind your kids that as long as the spelling error doesn't alter meaning, they will still be awarded marks. He he he

[Mohd. Helmi 0]

"But between now and 2010, we have to be content with the existing fleet. (To ensure that we do not lose our premium customers), we are spending money to refurbish the cabins of all aircraft with new seat covers and carpets. We are also changing the crew's uniform to make it more contemporary but still keep the batik and kebaya. The colour will be brighter.

And this will help retain fleeing premium customers?????

 

LoL, "the colour will be brighter". Ryan, it's going to be brighter!! So Hell yes that will help retain the premium customers. Don't you know people are willing to pay bigger bucks for kindergarten inspired coloured seat covers and carpets, forget AK's leather seats, SQ's Singapore Girl and IFE with the largest Business class and First Class seats, MH has the shiznitz of a hardware product offering. Thus like girly tweens being attracted to bright colours, so will the premium passengers desert SQ et al. Seriously MH management must be paying premium moolah for their brains because it certainly shows. Bravo!

[BC Tam 2]

Mr tam, remind your kids that as long as the spelling error doesn't alter meaning, they will still be awarded marks. He he he

At their SRJK( C) school, marks will still be awarded but with deductions

Under 'kiasu' mentality inculcated from start, those are marks 'wasted'

Sigh !

 

eh sorry, O/T !

Edited June 7, 2008 by BC Tam

[Kee Hooi Yen 0]

Talking about hybrid carrier, is it possible to develop a hybrid aircraft in view of the skyrocketing fuel price ??

[KC Sim 2]

Truly MH's management is fast losing its plot.

 

Just when I was trying to get round the bit about realising that "CEOs should pay attention to profit/loss account" and buying "Blackberry mobile phones for heads of department just so that they could report daily" . . . . now we are making the earth-shattering discovery that all it takes to attract premium customers are M&M coloured seat covers (and might I add poorly tailored ones judging from early pics on this site) and brightly coloured uniforms. Damn, guess Braniff International with the brightly painted planes along with Ecutoriana had it right all this time.

 

All previous references I have heard of hybrid carriers were evolution from LCCs. MH and IJ has just stepped into the realm of reverse engineering by transforming a full-service carrier to hybrid status. Perhaps IJ is right . . . look how successful the Japanese were with reverse engineering involving cameras, cars etc and the Koreans with ships, home appliances etc.

 

Let's wait and see. In the meantime, those fuel-guzzling B744s plod on as other airlines reduce their usage on some routes or retire them fully and replace them with B773ERs. Without an order yet, MH could not possibly look at a widebody fleet rollover anytime before 2011 or 2012. That is a long long long way off considering the fact that fuel is approaching USD150 per barrel. How on earth does MH expect to cope with the competition using fuel-thirsty airplanes filled with candy-coloured seats with equally colourful crew members . . . even its newly-ordered B737-800s are no match for Lion Air's B737-900ERs!

 

KC Sim