Malaysia Airlines, Air Asia Options

[samheisfl]

Three international routes that will be stop, KLIA-Langkawi-London, KLIA-Bayan Lepas-London and KLIA-Kuching-Paris, are recording RM70 Mill loss every year.. And yet, the state gov. protest about it..

[Iron Malayan]

KUALA LUMPUR, March 3 (Bernama) -- Malaysia Airlines (MAS) will implement the first phase of its route rationalisation programme from March 26.

In a statement Friday, the national carrier said the first phase will involve rationalisation of the following existing frequencies:

* Twice weekly London-Langkawi-Kuala Lumpur B747 one way flights;
* Twice weekly London-Penang-Kuala Lumpur B747 one way flights;
* Twice weekly Sydney-Kuching-Kuala Lumpur B777 one way flights; and
* Twice weekly Kuala Lumpur-Kuching-Perth A330 return flights.

From March 26, these long haul flights will be realigned to operate direct between the Kuala Lumpur International Airport (KLIA) and the cities of London, Sydney and Perth.

In addition, the current thrice-weekly Kuching-Kuala Lumpur-Frankfurt B777 return flights will be operated Kuala Lumpur-Frankfurt return from the same date.

MAS will use its existing Malaysian domestic services between KLIA and Langkawi, Penang and Kuching to provide immediate connections for the realigned long haul international flights.

This rationalisation is part of the national airline's business turnaround plan to refocus from a largely point-to-point carrier to a world-class connecting carrier with a major hub in KLIA.

Given the existing market realities, MAS said its flight operations will gradually shift from point-to-point network to a "hub and spoke" network, thus increasing its competitiveness to connect as many core markets as possible in Malaysia and internationally.

The airline released its business turnaround plan on Feb 27 this year which is aimed at achieving sustained profitability by going beyond expectations in five thrusts -- flying to win customers, mastering operational excellence, financing and aligning the business on profit and loss, unleashing talents and capabilities, and winning coalitions.

MAS currently operates the following weekly international frequencies -- Kuala Lumpur-London with 18 flights; Kuala Lumpur-Perth with 9 flights; Kuala Lumpur-Frankfurt with 7 flights; and Kuala Lumpur-Sydney with 14 flights.
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The cash flow plan

MAS' cash balance as of December 2005 stood at RM1.18bil. In order to prevent it reaching critical levels, which could potentially happen as soon as April 2006, a number of survival measures have been identified, and they include:,

·Delaying or banning discretionary expenses and capital expenditure

·Daily monitoring of cash balances by the CEO via the Control Tower method, which sees a report submitted at 5pm daily

·Disposal of non-core assets, expected to raise between RM800mil and RM1bil

·Sale and leaseback of aircraft and engines, expected to raise RM800mil

·Short-term borrowings of RM1bil

·Medium- to long-term borrowings of RM2bil, currently being negotiated with the Government

Since January 2006, MAS has secured about RM540mil from a number of initiatives, including the recent Travel Fair (RM158mil), the imposition of administration fees (RM150mil to RM200mil), charges for excess baggage (RM80mil per annum), tactical pricing (RM80mil per annum) and the imposition of fuel surcharges (RM30mil per annum).

Recently, MAS introduced an incentive bonus for its check-in staff. For every RM28mil of excess baggage charges collected, RM6mil will be paid to employees.

This approach has garnered an immediate payoff for both parties – since its announcement in December last year, collection of excess baggage charges increased by 300%.

According to Idris Jala, MAS managing director, the rationale for this approach was that the added weight would translate into higher fuel costs for heavier planes. Conversely, the current approach ensures lower fuel charges in addition to the added revenue from collection.

The profit turnaround plan

MAS' forecast loss of RM620mil for this year would constitute a hefty improvement of RM1.1bil, achieved through both revenue yield improvement (RM710mil) and cost improvement (RM370mil).

If all goes well, 2007 should see the company back in the black to the tune of RM50mil, while the following year uses that mark as a foundation to aspire to reach the lofty heights of RM500mil in profit.

There are a number of ways in which this can be achieved. According to MAS, every improvement of 1% in its passenger load factor translates into RM120mil in revenue. In addition, every 1 sen increase in revenue per kilometre nets MAS an additional RM50mil.

At an assumed price of US$83 per barrel of jet fuel, MAS has hedged 60% of its fuel requirements for the current financial year.

The plan identifies 10 initiatives:

·Budgeted expenditure to be cut by 20%

·Network to be reviewed, with unprofitable routes terminated

·Station costs reduced

·Corporate sponsorship ceased

·Discretionary staff trading suspended

·Capital expenditure postponed

·Recruitment of non-essential staff ceased

·Action to be taken on malpractices brought to late under the newly-implemented whistle-blower policy

·Non-performing suppliers removed

·Domestic operations restructured

With regard to its network, MAS has opted to shift from a point-to-point (direct route) network towards a hub-and-spoke (connecting) network, thereby allowing it to intensify flight frequencies on chosen trunk routes.

This process will entail:

·Route profitability analysis – focused on bottom-line, MAS will not fly where it cannot make money

·Route turnaround initiatives

·Hub-and-spoke connecting network through code-share or alliance partnerships

·Government assistance

·Termination of certain routes

As outlined by the company, its plans for the near future are to cut all flights via secondary Malaysian hubs. Within the next three to six months, further routes will be cut following an extensive route profitability analysis. Within the next 6 to 12 months, the hub-and-spoke strategy will be applied.

This approach leaves the Kuala Lumpur International Airport (KLIA) as the only long-haul hub for MAS, implying that it's the end of the tarmac for secondary hubs such as Langkawi and Penang. As AmResearch points out, this would be bad news for Malaysia Airports Holdings Bhd.

As for the domestic sector, MAS plans to take over the profit and loss statement from Penerbangan Malaysia Bhd from January next year. This plan, currently pending approval from the Government, is dependent on three conditions:

·MAS has the same freedom as AirAsia to determine destinations, schedules and fares for its routes, and consequently the size of its network, fleet choice and seat configuration

·The Government provides MAS with a free hand to restructure its business, with restructuring costs paid for by the Government

·The Government continues to provide financial support for rural air services and any other social routes that they mandate

Other steps that the company has taken include the hiring of Bernard Frances, former regional director of route revenue at AirAsia, relocating its headquarters from Jalan Sultan Ismail to Subang and KLIA, and imposing an administration fee as well as a cargo fuel surcharge.

MAS also intends to reposition itself towards its target market, as there are too few premium business travellers to commercially justify MAS' current fleet structure. Given that it is mainly leisure-focused travellers that make their way to Malaysia, the carrier will decrease its premium cabin size and shift the fleet towards smaller, more efficient aircraft.

In addition, it has identified inefficiencies in its 20-year old passenger reservation system, called KOMMAS, which will be replaced within two years.

The people plan

The four broad areas under this plan's ambit include LATT (leadership, accountability, teamwork and transparency), rewards and recognition, career progression and development, and leveraging capabilities.

There are also 10 initiatives under this plan:

·Salaries have been increased by 3% to 5% following an agreement with the union. Furthermore, an additional increase of 3% to 5% per employee is on the cards should MAS achieve a net profit of RM200mil next year and RM300mil in 2008. AmResearch notes that the managements own forecasts indicate that the soonest its employees will be receiving this increment is in 2008.

·Each employee receives a goodwill payment of RM1,000 to signify the start of the new regime.

·Confirmed ID90 travels between March and June for staff.

·Opportunities for staff to innovate will be introduced.

·Ground handling staff will be rewarded for excess baggage and penalised for mishandled baggage.

·Whistle-blower policy, performance management systems and staff intranet systems to be launched.

·Hospitalisation benefits to be improved.

·Employees' share option scheme (ESOS) to be introduced.

·Bonus payment via performance management system linked to net profit

·Succession planning and staff development launched.

Sources: MAS, AmResearch

[Feel100]

Hello,

I would like to share my experience about Malaysian Airlines. This happened on the 5/6 Feb 2006.

I was flying from Kuching to Perth. Normally the flight departs at 23:50 and arrived at Perth at 4:55 AM.

Guess what time I arrived hahah 15:30 incredible.. Plane had to be diverted back to KL and then fly from KL to Perth, because of a faulty anthenna.

:[

[malaccan]

^The Kuching-Perth sector's gonna be scrapped. (IMG:http://www.asiafinest.com/forum/style_emoticons/default/icon_neutral.gif)

Malaysia Airlines Removes Stopovers

[b]"We must focus on hub and spoke concept for Europe. Instead of flying from the KLIA to 10 points in Europe, (the airline) will consolidate it to four points namely London, Amsterdam, Paris and Rome," he said.

Idris has said he plans to meet Air France executives this week to seek support for Malaysia Airline's entry into the SkyTeam global alliance -- a bid to boost competitiveness as it is the only regional airline that is not part of a global alliance.

If MAS does get accepted into SkyTeam, it'll be the key airline in bringing passengers from Europe to Australia/New Zealand from amongst the alliance members, with feeders from Amsterdam, Paris and Rome. It's always a favourite for many using the Kangaroo route(UK-Oz), with London being its most important destination in the EU.

(IMG:http://www.skyteam.com/img/aboutSkyteam/skyteamImages/txt_logo_images_KLM_pic.gif)
(IMG:http://www.skyteam.com/img/aboutSkyteam/skyteamImages/txt_logo_images_france_pic.gif)
(IMG:http://www.skyteam.com/img/aboutSkyteam/skyteamImages/txt_logo_images_italie_pic.gif)

[forrestcat]

Gee.. last year... the max. weight for baggage is 30kg...now it's only 20kg.....

[pancaindera]

^ (IMG:http://www.asiafinest.com/forum/style_emoticons/default/eek.gif) (IMG:http://www.asiafinest.com/forum/style_emoticons/default/eek.gif) (IMG:http://www.asiafinest.com/forum/style_emoticons/default/eek.gif) . really?? is this for the international sector as well? susa la ini macam... (IMG:http://www.asiafinest.com/forum/style_emoticons/default/icon_neutral.gif)

[forrestcat]

^ (IMG:http://www.asiafinest.com/forum/style_emoticons/default/eek.gif) (IMG:http://www.asiafinest.com/forum/style_emoticons/default/eek.gif) (IMG:http://www.asiafinest.com/forum/style_emoticons/default/eek.gif) . really?? is this for the international sector as well? susa la ini macam... (IMG:http://www.asiafinest.com/forum/style_emoticons/default/icon_neutral.gif)

Ya...this time...MAS attendants dun give u any chance or special treatment.......they are really serious about imposing fines on overweight baggage...

[pancaindera]

tsk tsk. how la like this. have to resort to shipping everytime i go back...

[forrestcat]

Emirates Air baggage limit is only 15kg..

[Iron Malayan]

PEKAN, March 10 (Bernama) -- Several aspects in the proposed handover of most domestic routes operated by Malaysia Airlines (MAS) to AirAsia are still being negotiated but the talks will not take long, Deputy Prime Minister Datuk Seri Najib Tun Razak said.

"It will not be long, a week or two," he said.

He said the two airlines had been asked to hold discussions in the shortest time, with the supervision of the Transport Ministry, to decide on the domestic routes each would operate.

"The outcome of the discussions would be submitted to Prime Minister Datuk Seri Abdullah Ahmad Badawi and me to make the final decision," he told reporters after launching the Pekan Maxis Cyberlab and Maxis Titian Technology Friday.

He was asked to comment on a New Straits Times report Friday which quoted sources as saying that MAS and AirAsia had agreed to divide the domestic routes between them.

The paper said MAS would be allowed to continue operating the premier domestic routes such as to Penang, Kota Kinabalu, Kuching, Alor Star and Langkawi while the rest would be handed over to the budget airline.

Najib said MAS and AirAsia in principle had agreed that most of the domestic routes would be handed over to the budget airline.

[malaccan]

Air Asia wants to fly to Ho Chi Minh, but Vietnam prefers it to fly to Hanoi instead. I wouldn't mid them going to Da Nang, it'd be easier to see the Cham monuments there then!

Air Asia asks to fly to HCM City

03/11/2006 -- 22:14(GMT+7)


HCM City (VNA) - Malaysian budget carrier Air Asia recently applied for permission from the Vietnamese government to operate direct flights connecting HCM City and Kuala Lumpur.

Although local authorities touted Ha Noi as a favoured destination, negotiations are continuing with the Civil Aviation Administration of Viet Nam (CAAV), which is responsible for evaluating the proposal.

The director of CAAV Air Transport and Navigation Department, Lai Xuan Thanh, said the administration had encouraged Air Asia to select Ha Noi rather than HCM City. "The terminals at Tan Son Nhat International Airport in HCM City are already overloaded," he said.

"The administration also has to factor in any possible impact on carriers already operating on the HCM City-Kuala Lumpur route, and examine the balance of supply and demand on this route," he added, referring to flights already offered by Vietnam Airlines and Malaysia Airlines connecting the two cities.

Increasing congestion at Tan Son Nhat Airport makes Ha Noi International Airport and others in central Viet Nam attractive alternatives, according to another senior official from CAAV, Dang Ngoc Sinh. He said Air Asia should consider Da Nang and Phu Bai international airports as viable options.

More than 20 domestic and international airlines now operate in Viet Nam, including budget carriers Tiger Airways and Thai Air Asia.

Under the proposed 'open sky' agreement among ASEAN nations slated for 2008, the Vietnamese aviation market will swing open for international carriers, resulting in increased competition.

A decision on the Air Asia proposal is expected to be issued in two weeks.

[Iron Malayan]

KUALA LUMPUR (XFN-ASIA) - Low-cost carrier AirAsia Bhd said it recorded increases of over 50 pct in its January and February passenger traffic for the airline and its Asian associates.

Figures for January showed a 50.3 pct increase in passenger traffic to 800,786 passengers carried in total by AirAsia compared to 532,667 a year earlier, it said in a statement.

AirAsia in Malaysia recorded a 31 pct rise in passenger traffic, Thai AirAsia a gain of 60.7 pct and Indonesia AirAsia, which started operations in December 2004, a huge gain of 236 pct.

For the month of February, total passenger traffic grew 54.8 pct with 776, 568 passengers carried compared to 501,798 a year earlier, it said in a second statement.

AirAsia in Malaysia saw an increase of 41.2 pct in passenger traffic, Thai AirAsia a rise of 58.8 pct and Indonesia AirAsia a gain of 145.5 pct.

The totals represent the number of seats flown by AirAsia regardless of whether passengers turn up as the airline does not issue refunds for no-shows, the group said.

[Nusantara]

It's really depressing reading the news about MAS nowadays. The stewardesses are first class, but management suxx.

On the other hand, Air Asia is going places. But why have the LCC 15 km from KLIA? Isn't that a bit too far for folks on transit who want to catch a full-fare flight? (IMG:http://www.asiafinest.com/forum/style_emoticons/default/icon_confused.gif)

Many people said Malaysia airlines is the best, accomodative and friendly cabin crews but sux in ground service especially if you need change date of the flight after you purchased the ticket the representative of ticket services easily give unreasonable high penalty which other airlines company won't do any charge.
They will give charge of cancellation and also charge of reissuing the ticket, the management of MAL have to remedy the issue happened to many passengers, the ticket service might got some extra bucks by doing this, but definately will losing confident for future flight.

[Iron Malayan]

Subsidies For Rural Air Services Will Continue, Says Chan

Updated : 14-03-2006
Media : Bernama


PETALING JAYA, March 14 (Bernama) -- The government will continue to subsidise the rural air service as it is vital for air links in the interiors of Sabah and Sarawak, Transport Minister Datuk Seri Chan Kong Choy said Tuesday.

He said the government has no plans to discontinue the subsidies in the tune of RM10 million to RM15 million a year even after the decision on the rationalisation of domestic air routes.

It would continue to provide the same amount of financial support to the airlines tasked to operate the services on behalf of the government, he told reporters after attending the Malaysia Airlines (MAS) dialogue session with tour and travel agents.

In the dialogue, MAS Managing Director Idris Jala briefed the agents on the national carrier's business turnaround plan.

The rural air service links remote towns and villages in the interiors of Sabah and Sarawak to provide better accessibility to the people as travel by land and rivers take days to reach the destination.

The service, currently provided by MAS using Twin Otter aircraft, is subsidised by the government as part of its national obligation and social responsibility.

The double-engine aircraft has a sitting capacity of 25 to 28 passengers.

The turbo propeller Twin Otters are the workhorse for the service as most of the interior areas in the two states only have airstrips suitable for short take-offs and landings.

Currently, the services cover places like Marudi, Bario, Lawas, Limbang, Ba' Kelalan Long Akah. Long Banga, Long Lellang, Long Seridan and Mukah in Sarawak and Kudat, Tomanggong and Lahad Datu in Sabah.

The service is operated from two bases -- Miri in Sarawak and Kota Kinabalu in Sabah.

Chan said the government had to subsidise the service due to high operating cost.

Asked which airlines would be asked to operate the service under the domestic rationalisation route, Chan said: "We will announce later."

[malaccan]

From this link:
AirAsia set to conquer Asian skies

AirAsia has also been offered landing rights in Ho Chi Minh City, which the airline sees as a lucrative market due to Malaysian business interests, if it agrees to a counter-proposal by the Vietnamese government to add Hanoi and other northern routes in the country.

Wonder if AirAsia's gonna take up this offer. So far Thai AirAsia and Tiger Airways both fly only to Hanoi. If they do take up the offer, it'd be great if they flew to Da Nang, it's very close to Hue and Hoi An, two very historical cities.

[Iron Malayan]

KUALA LUMPUR, March 22 (Reuters) - Malaysia's state-controlled flag carrier, Malaysian Airline System Bhd (MASM.KL: Quote, Profile, Research), aims to build up a cash surplus of 1 billion ringgit ($271 million) this year, the company said on Wednesday.

The loss-making airline, which is raising 4 billion ringgit to avert a cash crisis, said the surplus was one of its key performance indicators for 2006, along with an objective to cut net losses to 620 million ringgit this year.

[tengkuafif]

Please read the comments about our airports at:

The Budget Traveller's Guide to Sleeping in Airports: Malaysia

I'm so proud of it! (IMG:http://www.asiafinest.com/forum/style_emoticons/default/biggthumpup.gif)

[Iron Malayan]

KUALA LUMPUR (AFP) - AirAsia's chief executive Tony Fernandes will open a chain of budget hotels to complement the operations of the region's most profitable low-cost carrier, a report has said.

The first in the chain of 60 to 70 hotels is expected to open for business at the end of this year in Malaysia before eventual expansion throughout Southeast Asia, the New Straits Times reported, quoting an unnamed source.

"His long-term plan is to eventually have hotels in all AirAsia destinations," the source was quoted as saying.

The chain will be called Tune Hotel.com after AirAsia's holding company, Tune Air, with 100 to 250 rooms in each hotel costing between 50 and 100 ringgit (27 dollars) a night, the source said.

Fernandes is expected to either purchase or lease existing hotels and remodel them, or build new ones.

AirAsia was launched as a budget carrier in December 2001 with just two aircraft but now dominates the crowded Southeast Asian low-cost sector.

It offers more than 100 domestic and international flights to Malaysia, Thailand, Indonesia, Singapore, Cambodia, Vietnam, the Philippines and China, with plans to expand to India to become an Asia-wide airline.

AirAsia recently received a large boost when it was given the right to take over 99 domestic routes from troubled national carrier Malaysia Airlines.

[malaccan]

(IMG:http://img.photobucket.com/albums/v235/malaccan/nhak.jpg)
^_^ The MAS stewardessess look kinda makcik-makcik while the Air Asia ones are more cik adik-cik adik. (IMG:http://www.asiafinest.com/forum/style_emoticons/default/embarassedlaugh.gif) This is so misleading!

[forrestcat]

Have anyone used the LCC terminal yet..how as it?