Introduction

MAS was founded in 1947 by Malayan Airways. With the

formation of Malaysia in 1963 the airline changed its
name soon after to Malaysian Airlines.
MAS is the government owned flag carrier airline of
Malaysia. Flights are operated from KLIA and Kota
Kinabalu. It also operates transatlantic and transpacific
flights.
MAS has received more than 100 awards in the last 10
years such as the “World’s Best Cabin Crew” and “5-star
Airline”.
MAS is listed on the stock exchange of Bursa Malaysia by
the name Malaysia Airline System Berhad.
 SWOT ANALYSIS

http://www.lucintel.com/images/consulting_img/SWOT_analysis.gif/
SWOT Analysis is a general examination of a
business’s current position so that it can identify
the preferred decisions in the future.
The following is the SWOT analysis for MAS:

S W
•Brand name •Lower margins E
T
•Improvement in yield •Weak cash flow A
R
E •Diversified Revenue •Unprofitable routes K
N stream •High Costs N
G •Low labour costs •Inadequate marketing skills E
T •Accreditation •Ineffective utilization S
H S
•Well-trained employees
S E
S

•Launching Firefly •Increase in fuel prices

•Expansion towards Asia •High Competition
Pacific •Foreign currency fluctuation
•Increasing cargo traffic •Terrorism & Health Awareness

OPPORTUNITIES THREATS
 • Highly recognizable brand name
S Established a strong brand image domestically as well as
internationally. MAS airlines has built a strong name for themselves in
T the aviation industry.

R• Improvement in yield
An increase in yield which is defined as revenue per passenger
E kilometer.
N• Diversified revenue stream
G MAS airlines generates revenues from various areas, such as
, which deal with freighter flights and aircraft cargo hold. It has also
T diversified into related industries such as aircraft ground handling,
aircraft leasing, aviation engineering, air catering and tour operations.
H MAS have revenues coming in from non-aeronautical areas such as
maintenance, repair, overhaul and aircraft handling.
S
• Low labour costs
MAS has the lowest labour costs than other airlines.
• Accredited by international bodies
MAS has won numerous awards from international bodies
and is accredited by the IOSA for its safety practices.

• Well- trained employees

Its flight attendants undergo extensive training. Unlike other
airlines where they promote the different routes and
destinations they provide, MAS airlines use they’re flight
attendants to promote the airline. MAS branding strategy is
for the general public to portray them as hospitable and
friendly.
 • Low margins
Even though MAS has a strong revenue growth, its operating margins
are well below the industry average. This effects the airlines growth
W plans and puts it at a competitive disadvantage.
E • Weak cash flow
A The airline has been reporting negative cash from its operations.
• Several weaknesses were due to the RM 1.36 million loss which was
K caused by the increasing fuel prices.

N • Unprofitable Routes
E In 2000, the airline suffered further losses, therefore lead to MAS
airlines to discontinue flights to unprofitable routes such as Brussels,
S Darwin, Honolulu, Madrid, Munich and Vancouver.

S • High costs
Costs included staff costs, handling and landing fees, aircraft
E maintenance and overhaul charges.
• Low Productivity
S
• Marketing skills are inefficient and are only focused on expanding to
fast.
• Ineffective utilization of resources and partnerships
O• Launch of firefly
P Has to subsidiaries; Firefly and MASwings. Firefly is
P Malaysia’s first community airline. It is expected to gain a
potential customer base of 100 million in the Indonesia-
O Malaysia-Thailand area. MAS airlines set up Firefly as a
R test-bed in managing low cost operation.
T
• Expanding passenger traffic in Asia Pacific
U MAS airlines covers several destinations in Asia, like
N China, Japan, India and the Middle East, where the
I demand for travel is high. More than 15% of MAS
revenues derive from the Asian region.
T
I • Increasing cargo traffic
E There has been an increase in cargo traffic in South East
Asian countries. This is due to the growth of export related
S industries. Therefore, MAS airlines benefits from the
increase in demand for air cargo services.
 • Increasing jet fuel prices
The dramatic increase of fuel prices affect most airlines. It is one of
the operating expenditures for MAS airlines.

T • High competition
Faces intense competition from other airlines. The airline faced
H major competition internationally from established airlines and new
start-up operations.
R
E • Foreign currency fluctuation
MAS’s reveunue is denominated in different foreign currencies
A which results in the fluctuations of foreign exchange rate. The
airline uses foregin currency borrowings as its strategy to manage
T the risk of foreign fluctuations. Undertaking this risk leads to a
decline in growth.
S
• Terrorism and Health scare
Political and Economical events such as the September 11th attacks
and the Swine Flu effects the aviation industry considerably. The
airline also suffered losses of RM 260 million during the Asian
Crisis in 1997.
 Improving MAS
• Restructuring and solving MAS ongoing weaknesses, is analyzing which
routes are unprofitable for the airline and therefore discontinuing flights to
those destinations to cut its losses and focus primarily on profitable high-
growth routes. The airlines should also maintain their existing routes which
are of high importance, thereby providing at least daily flights.

• MAS should utilize and maintain alliances with other airlines. This allows it
tap into other destinations around the world, therefore allowing MAS to
expand and provide flights where there unable to.

• MAS can reduce its high expenditure costs, by managing its costs and
budgeting. By training staff to be more specialized and/or to employ staff
that are able to carry out different tasks. Therefore, would minimize the
problem of overstaffing.

• The airline suffered high losses over the years due to poor management.
The airline should conduct proper training to existing managers. Hence,
employ suitable candidates for the position.
• Implement new Marketing Techniques to sell higher
margin services and the airline should keep in mind that
the organization cannot be successful in a day.
• To boost margins is to change the mix of business by
hiring new sales people who are capable of selling, hire
new staff, open new locations or update offices.
 References
• http://www.net-temps.com/careerdev/crossroads/prin

• http://www.asiatraveltips.com/travelnews2001/4Octob

• http://www.malaysiaairlines.com/cn/en/corp/corp/info

• http://answers.yahoo.com/question/index?qid=20070

• http://en.wikipedia.org/wiki/Malaysia_Airlines