a. Introduction
1.Backgroud Of Malaysia Airlines
Malaysia Airlines System Berhad is also known as MAS in short. MAS is founded in 1947 as
Malayan Airways, but it has change its name as Malaysian Airline System in 1 October
1972 . MAS is the flag carrier which is own by government of Malaysia. MAS headquarters
is situated at Sultan Abdul Aziz Shah Airport in Subang, Selangor. MAS operates flights at its
first base in Kuala Lumpur International Airport, and secondary base in Kota Kinabalu.
Malaysian Airlines System Berhad is the holding company for Malaysia’s national airlines
carrier, one of the fastest growing airlines in Asia. Malaysia Airlines has two airline
subsidiaries, which is Firefly MASwings. Firefly operates scheduled flights from its two
home bases Penang International Airport and Subang International Airport. The airlines
focuses on tertiary cities although has recently launched services to Borneo from Kuala
Lumpur International Airport. MASwings focuses or inter-Borneo flights. Malaysia Airlines
has a freighter fleet operated by MASKargo, which managers freighter flights and aircraft
cargo-hold capacity for all Malaysia Airlines’ passenger flights.
MAS are using this type of craft Airbus A330-200 and A330-300. Boeing 737-400, 800 and
400/400. Malaysia Airlines operates a fleet of aircraft with two cabin configurations.
Malaysia Airlines B777-200ER fleet has a two configuration which is Golden Club Class and
Economy Class. Its B747-400 fleet has a three-cabin configuration, also including First Class.
Malaysia Airlines premium cabins and Economy Class have been giving numerous awards for
excellence in product and service delivery.
From a small air service, Malaysia airlines have grown to become award-winning airline with
more than 1000 aircraft, servicing more than 110 destinations across six continents.
Malaysia Airlines also practiced the online booking and buying to make their reservation or
purchasing way easier for passenger. With this online purchasing, the passengers need to
fulfil their details like the destination they want to go and the departure place they want. The
payment will settling via the online banking. Internet user can book their air ticket, hotel ,
and train ticket and rent car via Malaysia Airlines Website.
2.Vision, Mission and Objective
Vision
An airline uniquely renowned for its personal touch, warmth and efficiency.
To be the World’s five star value carrier(FSVC).
To be the airline of excellence
Going beyond expectations
Mission
To provide air travel and transport service that rank among the best in terms of safety,
comfort and punctuality.
Make Malaysia Airlines one of the leading standard bearers for the airline industry in term of
safety, efficiency and quality of service.
To be a profitable airline
List of Objectives
Highest level of safety
Satisfy legal requirements
Operations are conducted in the most efficient manner
Drive structural cost management
Ability to map efficiency in each area of operations
Position as benchmark in the aviation industry
3. Organisational Structure
Figure 1.0: Malaysia Airline System Organizational Structure
Senior Management of Malaysia Airlines
1. Tengku Dato’ Azmil Zahruddin
bin Raja Abdul Aziz
Managing Director / Chief
Executive Officer
9. Effendi bin Abdul Rahman
Senior General Manager, Human Resources
2. Mohd. Azha bin Abdul Jalil
Chief Executive Officer
10.. Muzzaffar bin Othman
Senior General Manager, MD’s Office
3. Captain Mohamed Azharuddin bin
Osman
Director of Operations
11. Shahari bin Sulaiman
Managing Director, MASkargo
4. Dato’ Captain Mohd Nawawi bin
Awang
Senior General Manager, External
Relations
12. Dato’ Eddy Leong Chin Tung
Managing Director, Firefly
5. Indira Nair 13. Dato’ Mohd Salleh bin Ahmad Tabrani
Senior General Manager,
Communications
Managing Director - MASwings
General Manager – Transition Management
6. Dr Amin Khan
Senior General Manager, Network
& Revenue Management
14. Captain Dr Ooi Teong Siew
General Manager, Corporate Safety, Security,
Health and Environment
7. Dato’ Bernard Francis
Senior General Manager, Sales &
Marketing
15. Shahjanaz binti Kamaruddin
Company Secretary
8. Mohd Roslan bin Ismail
Senior General Manager,
Engineering & Maintenance
Managing Director, MAS
Aerospace Engineering
16. Esther Yap Siew Yen
Chief Internal Auditor
Type of Company
MAS is a type brick and click company. This is MAS offer both offline and online ticket
booking systems. MAS allows customers to order air ticket and other services online, and it
History of Malaysia Airlines
b. The Organisation and Internal Workings
Website Walk-through
Figure 1.1: Malaysia Airlines Homepage
The above picture showed the homepage of Malaysia airlines. The web page is easy to use
and have simple interface, so it is user friendly and interactive. The web page don’t just have
two types of colour that is blue and red. Although Malaysia airlines use only a few of colour ,
but it looks interesting and nice interface.
To register as a user for Malaysia Airlines
Figure 1.1: Register as a user for Malaysia Airlines (Step 1)
Step 1: To register as a user for Malaysia Airlines, you find and clink the sign up
button at the top of the screen. If i am a user of Malaysia Airlines, then i should click
login.
Figure 1.2: Register as a user for Malaysia Airlines (Step 2)
Step 2: After click the sign-up button, the web browser will direct me to a register
page. Then I will have to fill in your logon details, personal details and address details.
Figure 1.3: Register as a user for Malaysia Airlines (Step 3)
Step 3: At the logon details section, i will have to fill in my username and password. This
information is required every time i log in to this web-page. If i want my computer to
remember the username of your account, I have to tick on “Remember me on this computer
Figure 1.4: Register as a user for Malaysia Airlines (Step 4)
Step 4: After i fill in the logon details. Next, it is to fill in personal details of myself. At the
personal details section, i will have to fill in my salutation (if have), title, first name, last
name, Date of birth, gender, email, and telephone number. After fill in all the personal details,
I will have to tick “I have read the terms and conditions and the privacy statement”. If I want
to receive notification from MAS Airlines, I will have to tick “I am happy to receive mailings
from time to time”. If I want to fly with best deal, I should tick “sign up for get the deal”.
Figure 1.5: Register as a user for Malaysia Airlines (Step 5)
Step 5: After i fill in the personal details. Next, it is to fill in address details of myself. At the
address details section, i will have to fill in my address, city, state, country and postcode.
Figure 1.6: Register as a user for Malaysia Airlines (Step 6)
Step 6: After i make sure fill in the all the logon details, personal details and address details.
Next, I click register button at the bottom of the register page. Then, it will direct me to the
next page.
Figure 1.7: Register as a user for Malaysia Airlines (Step 7)
Step 7: After I click the register button, the page will showed this before continue to the next
page.
Figure 1.8: Register as a user for Malaysia Airlines (Step 8)
Step 8: When successful register, the above page will show. It will show the logon details,
personal details and address details I fill in earlier. If got any changes, can change the
information my click the edit button in each section of the details.
‘
PPPP Description
In order to achieve marketing objective, Malaysia Airlines need to have strategy must
have different elements in the marketing mix. Marketing mix is the combination of
tools that are used by Malaysia Airlines to satisfy customer need and achieve company
objective and goal. The 4P’s in the marketing mix strategy are refer to product, price,
place and promotion. The goal is to decide the 4P on the customers in the target
market in order to create perceived value and generate positive feedback.
Product
The term “product” refers to tangible, physical products as well as service. It also
means defining the characteristic of product or service to meet the customer needs.
Nationwide call centre
Customer can use English, Malay, Mandarin and Tamil when they call Malaysia
Airlines call centre. Call centre service is available from 8am to 10pm on weekdays
and from 9 am to 6pm on weekends. The call centre number is 1300-88-3000 and it
handle calls from Malaysia, Singapore and brunei. For those who are living outside
Malaysia, you can call 603 7843 3000.
e-Ticket
An e-Ticket is an electronic ticket. With an e-ticket, customer no longer need to
collect paper tickets. With e-ticket, customer no need worry about ticket lost or being
stolen when traveling.
After booking has been confirmed, an e-ticket reference and detail will be sent
to your e-mail when registration. If you have booking reference, e-ticket and photo
identification, then you are ready to travel. To purchased ticket online, customer need
a valid credit card.
Easy Payment
To book ticket and purchase online, customer need to have a valid credit card.
Currently, MAS online booking only accepts a valid Visa or MasterCard.
Price
Price means the value or the worth of a product that a buyer are willing to pay for it or
exchange the product value for money.
Everyday Low Fares
Malaysia Airlines have launched its Everyday Low Fares programme on 6 May 2008.
Everyday Low Fares offers 1.3 million RM 0 for all domestic routes operate by
Malaysia Airlines and Firefly. The Everyday Low Fares programme offers a
maximum of 30% of the total seats on every flight which are unsold factor of 70% on
each flight. Therefore, Malaysia Airlines is make earnings from fuel surcharge,
administrative fee and airport tax. Since the launched of this programme till 14 may
2008, Malaysia Airlines has sold more than 150,000 seats. Malaysia Airlines the
programmes to all ASEAN routes operated by Malaysia Airlines. This programmes
has been strongly opposed by Air Asia which claim that directly business model with
Malaysia Airlines and not allow budget carrier compete with national airlines.
Place
Distribution is getting the products to the customer, looking at a location where a
service is delivered.
Internet booking
Malaysia Airlines internet booking system is launched in august 2004. To strengthen
is online booking service, Malaysia Airlines is planning a major expansionon its
booking facility by the end of 2005. Using the internet booking system, its allow MAS
to reduce airlines distribution cost significantly. MAS is partnership with
GRSNetwork to reduce its distribution cost and to simplify the ticketing process. MAS
web-site allow customer faster access to information to their traveling needs and use
Malaysia Airlines products and other services. MAS is expected to cut distribution
costs by more than 50% when it adopt an Internet-based distribution network. The use
of internet allow customer access to MAS inventory worldwide.
Sales Offices
These are available at airports counter and town centers kiosk for the convenience of
walk-in customers.
Improve Customer service
The Customer service operations use to cope with the higher passenger load and
additional flights. With the expansion of customer service, it will increase the
operational budget. The increase of operation cost is due to higher staff costs, hire and
maintenance of equipment, passenger layover and delay costs, passenger sales
expenses and other expenses.
Promotion
Promotion means the various aspects of marketing communication. The
communication of the product with the goal will generating a positive customer
response.
Malaysia Airlines Travel Fair (MATF)
Malaysia Airlines Travel Fair is to offer attractive air fares and holiday packages.
During 22-24 February 2011 at the fair, there will a 70% discount off from current
market.
Besides, there are also deal offered is ‘buy 1 get 1 free’ promotion on business
class for airlines to Asean cities such as Xiamen, Kunming, Macau and discounted
golden holiday packages for domestic and international travel.
The company plan to use this travel fair to raise the Malaysia brand awareness
and stimulate demand. The company will get to explore opportunities of businesses of
organise travel fair in selected international markets.
Deals
In Malaysia Airlines web-site, there are special promotion for member and non-
member. There are more advantages if become a member. If register as member, you
are able to purchase air ticket with discount price and enjoy exclusive member only
fares.
In Malaysia Airlines web-site, there are special deals such as deals of the day,
balik kampong, MHcoupon, MHdeals, and MASholidays.
Deals of the day allow customers enjoy big saving on your next. this deals
include exciting destinations at a fantastic prices. Balik kampong deal is for those who
always feel homesick. This promotion offer amazing low prices and all balik kampong
bargain.
MHcoupon is a new way allow customer to enjoy exclusive saving on
Malaysia Airlines flight. The online coupon comes in the form code, it does not
required printing or cutting necessary. Redeeming coupon is easy, just key in the
coupon code when booking for flight ticket.
MHdeals is a free application that use iphone GPS sensor to locate airport around you
and display the best Malaysia Airlines deals. Besides, with the use of the application,
customer of MAS will get latest tourist information to explore the tradition and natural
beauty of Malaysian holiday destination in borneo.
MASholidays is a deal that provide holiday package that suit a variety of budget. It
include holiday package within Malaysia and outside of Malaysia at an attractive
price.
c. Competitors and External Environment
i. PEST analysis
1. Political factors
Political factors are vital to ensure the growth of the airlines industry in Malaysia.
With the peaceful and harmony environment, Malaysia become one of the popular
and famous place with attractive travel destinations. Besides, Malaysia are consists
of diversity composition ethnic of the population and have different cultural and
tradition that will attract more tourists. Fair-trade decisions, antitrust laws, tax
programs, minimum wage legislation, pollution and pricing policies, and many
other actions is exists to protect employees, customers, the general public and the
environment are constraints to political factors.
2. Economic factors
Despite stiff competition in the airlines industry, Malaysia Airlines launched its
Everyday Low Fares promotion. MAS offers a maximum of 30% of the total seats
on every flight which are unsold factor of 70% on each flight with zero cost
(excluding fuel surcharge, administrative fee and airport tax) to attract more
customers in the region. Increase income and economic growth will lead more
people to board on aircraft. Global economic recovery will increase growth in load
factors. In the fourth quarter of 2009, MAS returned to operating profitability with
RM 3.8 million profit. When the global facing a downturn, more people will prefer
to enjoy flight with low costs.
3. Social factors
The social factors are element such as beliefs, value, attitudes, opinions and
lifestyles of a person will affect a firm external environment such as cultural,
ecological, demographic, religious, educational and ethnic. Government carried
out campaign will help boost tourism and airlines industry. People are prefer to
travel by air is because it is more convenience. The changing of Malaysia lifestyle
will help the growth of the airlines industry in Malaysia. With the increase of gross
national income per capital, Malaysia are become more affordable to travel by air.
4. Technology factors
Malaysia Airlines provides online service for booking air ticket with hotel
booking, car hire, purchase train ticket, and travel insurance. in 2009 ,MAS
implemented passenger services system (PSS). PSS is to ensure faster service
delivery, quicker online purchase, miles redemption options online and new
services. MAS have introduced MASholiday, the online promotion is for
customers to book holiday packages online. MAS upgrade its in-flight
entertainment system with Matsushita System 3000i on Boeing 747 and Boeing
777, the system have digitized on-demand audio and video media include new
games, sms and interactive flight information on all classes.
ii. Market analysis
a. Market segmentation
1. Media segmentation
Media is a mean possibility of medium that tend to reach the audiences. Media
such as television advertisement, advertisement board, magazine advertisement
and etc. media segmentation is often being used by companies to promote its
products or services using that media. MAS always used magazine advertisement
as a medium to promote its services and help the growth MAS in the airlines
industry. It is a best decision for MAS to advertise in magazine advertisement in
travel magazine and business magazine, It is because travel and business magazine
reader are from businessman or traveller. If traveller and businessman who are
attract to the advertisement in the magazine, they would choose the airlines
because it give passenger a general of the airlines services.
2. Demography segmentation
Element such as gender, age, income, and education level are common
demographic variables. Airlines services is focus to those who like to travel,
business purpose and etc. example, MAS have split its airlines in to three different
classes that is executive, business and economy class. Executive class usually are
most luxurious class in airlines services and it is the most expensive compare with
business and economy class. Major of Airlines Company has removed first class
because it is highest service in airlines service. For business class airlines are
medium class services and it is more expensive but cost less than executive class.
Many airlines use business as the highest level of service Economy class also
known as coach class and it is the cheapest compare with executive and business
class airlines services.
3. Lifestyle purpose segmentation
Lifestyle segmentation investigates the consumer attitudes, values, behavious,
emotions, perception and interests. Lifestyle segmentation is to segment a market,
MAS can identify the segmentation variable from lifestyle statement, words,
pictures and etc. Qualitative research provides the insight, the conceptual
knowledge and the consumer’s language to design the questionnaire about
consumers lifestyle. To design a market segmentation questionnaire for airline,
MAS must conduct depth interviews to create questionnaire. The questionnaire
will include a behaviour section such as frequency of flying, how to purchase
tickets, who travel with, income, occupation, purpose of travel by airlines, money
spend on airlines tickets and etc. In person interview and internet-based interview
are frequently use by airlines industry. In person interview produce more accurate
answers. The internet is valuable for segmentation studies, respondent can paying
full attention and take time choose their own opinion.
4. Price segmentation
Price segmentation is common and widely practise by airlines industry. The
different in household income allow MAS to generate segmentation for price
dimension. If consumer incomes range from low to high, then MAS should offer
low-priced, medium-priced and expensive services. Example, Executive class is
airlines service for those are higher income passenger and for business purpose
such as CEO or director of a company, Business class airlines are usually for the
medium income group such as traveller and business purpose for businessman,
Economy class airlines is focus for low income group.
b. Market Strategy
Malaysia Airlines strategy is to transform its airlines in to Five Star Value Carrier
(FSVC). There are 5 Strategy which is:
5 Star
MAS must improve its products and services to develop it become high quality
products and services.
Lower Costs
MAS should reduce its structural and operational costs. So it will able MAS to
offer lower fares to being competitive in the airlines market.
Competitive Fares
If MAS has lower costs structure, it will be able for MAS to offer low and
competitive fares to consumer. It will give MAS competitive advantages to
compete in the airlines market and make profit.
Increase customers and revenue
With high quality services and products at low fares, it will attract more consumers
choose to fly with Malaysia Airlines. This will generate more revenue and help in
MAS growth.
Grow network and build capacity
With more revenue, MAS invest in growing its network and building its capacity.
By invest in growing its network, MAS will open up more routes and purchase
more planes to gain sustainable growth.
iii. Other competitor analysis
Porter Five Force of industry analysis model (Malaysia airlines)
Threat of new entrant
a. International Entrants
i. International entrant
The international competitor are airline such as Singapore International
Airways, Thai International Airways, Cathay Pacific Airways and Garuda
Indonesian Airways. Exists of competition is due to outdated regulatory
system. Government tend to increase usage of KLIA as the main hub in
Malaysia, international airline have to sign MOU to allow landing on KLIA.
Government which sign agreement with international airlines will gives
threat to Malaysia airlines such as Air Asia and MAS.
ii. Local entrant
The exists of Air Asia which is low cost and budget airlines are competitor for
Malaysia Airlines. Air Asia is trying hard to compete with MAS through promotion
and advertisement to attract many local passengers to use Air Asia to travel within
Malaysia.
b. Bargaining power of Buyer
Price, quality of service, convenient and comfort are concern to customers.
With a lots of airlines company in the market, customer are able to choose which
airlines that suit their need. In the international market, SIA and UAE are
providing better quality services to compete with each other to attract more
customers to travel with their airlines. In the local market, Air Asia compete with
MAS by providing low cost services to its customer.
c. Bargaining power of Supplier
The main supplier of MAS aircrafts and accessories is boeing. Boeing are major
supplier of all aircrafts and services, but Airbus put a lots of effort again and
again to enter the supplier market. MAS have been using boeing aircraft and part
since its established. Besides, MAS mechanic are more familiar with boeing
aircrafts. Therefore, MAS is hard to change to another supplier. With limited of
MAS can choose from, Boeing can increase its price in aircraft and parts.
d. Substitutes
Where time is matter in long distance travel, air travel almost can’t replace with
other alternative. Sea and land journey can be replace with other mode of
transportation. in long distance travel, other mode of transportation are not
convenience, time-efficient, and comfortable if compare with travel by air. So
MAS don’t have to worry about threat or exist of other mode of transportation to
air travel especially long-distance travel. But for short distance journey, customer
prefer would to use on land transport such as car and bus. For short distance
travel, MAS is one of the option that customer can choose from.
e. Competitive Rivalry
In the regional market, Singapore Airlines is a big and strong competitor that
is well known for its services that will give negative impact to Malaysia
Airlines. In the international market, there are a lot of airlines company that
compete in the market lead to competitive price and quality of services. For
example, US and European airlines merged to form a large airlines group in
order to compete in the large competitive market.
d. SWOT Analysis
STRENGTH
Malaysia Airlines has its own abilities of strength of their fundamental business use to
compare itself with other service company based on value, price and services. I have studied
and analysed the strength of MAS, there are points can show the strength in Malaysia
Airlines.
Highly recognizable brand name
Malaysia airlines is one of the service companies that established for more than 70
years being the oldest airlines company in Malaysia and its brand image has been highly
recognized. Malaysia Airlines put a lot of effort on their branding and advertising and major
around flight crew. Malaysia Airlines have their own branding strategy involve its stewardess
to promote its airline. Malaysia Airlines decided to use the “going beyond expectation” as
their slogan to market itself internationally and promote its excellence of quality service.
Using branding strategy will help MAS to establish strong brand image internationally and
locally. MAS airlines has built a strong name in the airlines service industry.
Increase in yield
Increase in yield mean revenue per passenger kilometre. Implement a highly competitive and
dynamic pricing, Malaysia Airlines are able to maximise yields on peak flights and expand
market share on non-peak flights.
The increasing in yields is due to strong load factor to leverage on. Additional capacity of
aircraft will influence yield and yield recovery maybe slower than expected.
Diversified revenue stream
Malaysia airlines generates revenue from various services such as flight operation and
Aircraft cargo. MAS has diversified into related industries such as aircraft ground handling,
aircraft leasing, aviation engineering, air catering and tour operations.
Besides, MAS have revenues coming from non-aeronautical areas such as maintenance,
repair, overhaul and aircraft handling.
Low labour costs
When MAS carried out staff reduction or downsizing, this is due to MAS was overstaffed. Its
staff size reduces by 3,000 or 15%. Reduce of labour will allow MAS to save on labour cost
and increase effectiveness.
A blanket recruitment and training was established to save operating cost. MAS has
the labour cost compare with other airlines. Low labour cost structures and high productivity
have more competitive advantages over company with labour costs.
Accredited by Awards and Recognition
MAS has won various awards from international body and is recognized by the IOSA for
safety practices. In the year 2009, MAS won the 5 star Airline award for the fifth consecutive
year as well as regained the position of world’s best cabin staff. Besides, MAS also
recognised as Asia’s Leading Airlines the World travel Awards and Best Airlines in southeast
Asia by the Global Traveller magazine.
These awards showed that MAS continue to deliver better products and services, not
only to satisfy passengers, but also MAS business customers.
Well-trained employees
To improve service level of customer service agents, training was conducted to calculate good
habits and service quality the front line ground staff. To enhance flight safety, training is arm
together with flight safety department introduced to evaluate training footprints for the entire
fleet consistent with the latest in the industry.
Its flight attendants undergo extensive training. MAS airlines use their flight
attendants to promote the airline. MAS branding strategy is to provide hospitable and friendly
service to represent good image to the public.
WEAKNESSES
Weaknesses is the things that MAS does not do well or other airlines company are doing
better. From assessment, MAS still have some weaknesses as other airlines company have.
Low margin
Although MAS has a strong revenue growth, its operating margins are below the industry
average. This is due to the airlines growth plans and MAS competitive disadvantages.
MAS found it is difficult to achieve operating profit margin at sufficient level finance
such as capital expenditure, and other financing.
Weak cash flow
The airlines reporting negative inflow cash from its operations. Several weaknesses were due
to the RM 1.36 million loss which was caused by the increasing fuel prices.
Weak cash flow is due to impairment losses. The amount loss can be recognise in income
statement. Weak cash flow means that spending is more than earning. The amount of loss is
measured is difference between the asset carrying amount and the present value o estimated
future cash flows.
Unprofitable routes
In 2000, the airline suffered further losses lead to mas airlines suspend its flight to
unprofitable routes such as Brussels, Darwin, Honolulu, Madrid, Munich and Vancouver.
Some routes have been discontinue due to insufficient passenger demand. MAS claimed that
it was losing passengers to other carriers on this route because of insufficient capacity.
High costs
Costs include staff costs, handling and landing fees, aircraft maintenance and overhaul
charges. The rising cost of fuel will lead to high cost of operation. Sometimes, higher costs is
because of security and environment policies.
Low Productivity
Marketing skills are inefficient and are only focused on expanding to fast. Ineffective
utilization of resources and partnerships. Low productivity is because MAS was overstaffed.
Besides, Low productivity were due to poor management and poor technology.
OPPORTUNITIES
Opportunities are the chances in the industry which could utilized by the company to make it
more positive respond in the market.
Launch of firefly and MASwings
Firefly and MASwings are subsidiaries of Malaysia Airlines. Firefly is Malaysia’s first
communities airline. It is expected to gain a potential customer base of 100 million in the
Indonesia-malaysia-thailand area. MAS airlines set up firefly for test-bed to manage low cost
operation.
Firefly first flight was on 3 april 2007 at penang. It’s headquarter are at Sultan Abdul Shah
Airport in Subang. MASwings first flight was on 1 October 2007. It’s headquarter are at Jalan
Airport in Miri, Sarawak. Its Firefly and MASwings have recently completed their fleet
renewal exercise, both operating 7 and 10 ATR72-500 aircraft accordingly.
Expanding passenger traffic
MAS airlines covers several destination in Asia such as japan, china, india and the middle
east. Asia country demand for travel is high.more than 15% of MAS revenue comes from the
Asian region.
In February 2010, international passenger demand up by 9.5% year-on-year. In asia pacific,
passenger traffic grew by 13.5%.
Increasing cargo traffic
There has been an incease in cargo traffic in south east Asian countries. This is due to growth
of export related industries. Hence, MAS airlines benefits from the increase in demand for air
cargo services.
In February 2010, cargo traffic improved by 26.5%. In asia pacific, cargo traffic posted a
significant growth of 34.5%.
Changes in customer preferences
Customers have different needs and desires in term of purchasing. The changes of customer
preferences are because of factors like demographic, psychographic, and geographic factor.
Malaysian Airlines should introduce new concept, it is because human beings can easily
having a change in their life.
Based on the survey and research have been done by MAS, MAS should introducing hot meal
boxes in response to customer preferences. MAS has more menu options available for
customer to choose from. There are Asian and Western meal to suit all customer needs and
desires. A total of 37 menus are available over 8 week cycle rotation to ensure frequent
travellers will be able to enjoy different kinds of meals.
THREATS
Threat are factor from external environment of the MAS company which could negative
influence the company.
Increasing fuel prices
The dramatic increase of fuel prices affect most airlines. It is one that influence operating
expenditure for MAS airlines. The increase in fuel price will lead to increase operation costs,
this will lead to losses or lower profit. With increase of fuel price, some airlines gone
bankrupt because airlines financially weak airlines are expected to follow suit.
Besides, the poor performance of economic and market will lead to increase of fuel prices.
The weakening of foreign exchange will possibililty increase fuel prices.
High competition
MAS faces strong competition from other airlines. Its airlines faced major competition
internationally from established airlines and new start-up operations. MAS has to deal with
local airlines in the same field is AirAsia. AirAsia is airlines that provide low cost to
customers. MAS have direct competitor that are Singapore International Airways, Thai
International Airways, Cathay Pacific Airways and Garuda Indonesian Airways if compete
intenationally.
Foreign currency fluctuation
MAS revenue is from different foreign currencies which result in the fluctuations of foreign
exchange rate. The airlines uses foreign currency as strategy to manage risk the risk of foreign
fluctuation. Undertaking this risk will lead to decline in growth.
MAS treasury unit in the finance division handle cash and fund management such as credit
management and foreign exchange. MAS inefficient foreign exchange management could
make the company more than $10 million a month. MAS needed more US dollars to balance
its foreign exchange requirement.
Terrorism and Health scare
Terrorism is leading factor of decrease tourism and airlines business. Terrorism might happen
in many ways in certain country or it might happen inside the place such as plane being
hijack. MAS airline serves more than one hundred destinations worldwide. If terrorism
happen in area of southeast Asia, MAS will have to stop all their operation and flight to the
southeast Asia for a period of time. This will lead to decrease of confidence in the airlines.
The H1N1 pandemic and swine flu will lead to weaker demand of airline flight. The
outbreak of disease will affect the airlines industry significantly. There are passenger with
H1N1 boarding with Malaysia Airlines will lead to decrease of customer to fly with MAS.
Economy
Changes in economy will directly influence business positively or negatively in many aspects.
In global economic downturn, it will affect all the business worldwide. As one of the airlines
company, Malaysia airlines have lot of collaboration with other company throughout the
world. It’s will give a big impact to the company if the big changes in the economy level.
When the European economy is lagging, it will lead to slow growth in demand for air travel.
Top Related