...Case Study Related to Business Malaysia Airlines (MAS)Facing Challenges in the New Millennium M. Sadiq Sohail, Ph. D• King Fahd University of Petroleum & Minerals College of Industrial Management Department of Management & Marketing P.O. Box 210, Dhahran-31261 Saudi Arabia E- mail: ssohail@kfupm.edu.sa sadiqsohail@hotmail.com Tel: + 966 3 8601764 Fax: + 9663 8602544 • 1. Formerly at Monash University Malaysia. The author is thankful to Ms. Marianne Visvalingam and Ridhi Jain, both undergraduate students at Monash University Malaysia for their assistance in developing this case. The case has been developed for academic discussion, rather than to illustrate either effective or ineffective handling of any business or marketing situation. As the cases have been prepared strictly for an academic purpose, stakeholders and other interest groups should not use any information for drawing any conclusion or opinion about the company or any issue thereof. The author wishes to acknowledge KFUPM for its support in presentation of this paper. 2. 3. 1 Malaysia Airlines (MAS)Facing Challenges in the New Millennium Abstract The case deals with the problems faced by the Malaysian Airlines, the national air carrier of Malaysia. While the company had many notable achievements, since the 1970s, it began to face major financial trouble since late 1990’s. The case examines the strategies pursued by MAS to overcome the challenges. The case follows up with a brief description...
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...Bakgroud of Malaysia Airlines System Berhad Scheduled air passenger and mail services in Malaya commenced in 1937 when Wearne's Air Service (WAS) commenced operating services between Singapore, Kuala Lumpur and Penang. Wearne's Air Service was started by two Australian brothers, Theodore and Charles Wearnes. The service commenced as a thrice weekly flight between Singapore and Penang The first flight, using an 8-seater de Havilland DH.89A Dragon Rapide took place on 28 June 1937 This inaugural flight departed Singapore from the then brand-new Kallang Airport which had just opened earlier in the same month on 12 June Later a second D.H.89A enabled the expansion to daily services as well as the addition of Ipoh as a destination. The WAS services ceased with the onset of the Second World War Japanese occupation of Malaya and Singapore. An initiative by the Alfred Holt's Liverpool-based Ocean Steamship Company, in partnership with the Straits Steamship Company and Imperial Airways, resulted in the incorporation in Singapore on 12 October 1937, Malayan Airways Limited (MAL). But the first paying passengers could be welcomed on board only some 10 years later. After the war, MAL was restructured to include just the partnership of Straits Steamship and Ocean Steamship. The airline's first flight was a charter flight from the British Straits Settlement of Singapore to Kuala Lumpur, on 2 April 1947, using an Airspeed Consul twin-engined aircraft. This inaugural flight on the "Raja Udang"...
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...2 Introduction 2 The History of Malaysia Airlines 3 Unprofitable Stage 4 The Causes 6 The Recovery Plan 7 Explanations on government intervention 8 Who is Dato’ Sri Idris Jala? 9 Recommendation 10 Conclusions 11 References 12 Objective The objective of this research paper is to explain the meanings of unprofitable stage of Malaysia Airlines. On the other hand, this paper will also explain the causes of the unprofitable stage and the recovery plan that the company need to take in order to keep the plane on the skies. Introduction Malaysia Airlines System Berhads or known as Malaysia Airlines (MAS) is the largest airlines company in Malaysia. The airlines headquarters located at the grounds of Sultan Abdul Aziz Shah Airport in Greater, Kelang, Selangor. However, the home base of MAS is the largest airport in Malaysia, the Kuala Lumpur International Airport (KLIA). Base in KLIA, it enables the airlines to have a secondary hub at Kota Kinabalu, Sabah and Kuching, Sarawak. To meet their local customers need, Malaysia Airlines open two subsidiaries the Firefly and MASwings. Firefly is created in order to control the domestic market. Firefly which is located in Sultan Abdul Aziz Shah Airport will only fly in west Malaysia from its two home bases which are Sultan Abdul Aziz Shah Airport and Penang International Airport. However, it is different story for MASwings. In order to meet domestic customers need in east Malaysia or the Borneo, MAS created one new branch...
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... The story of Malaysia Airlines started in the golden age of commercial air travel. A joint initiative of the Ocean Steamship Company of Liverpool, the Straits Steamship of Singapore and Imperial Airways led to a proposal to the Colonial Straits Settlement government to run an air service between Penang and Singapore. The result was the incorporation of Malayan Airways Limited (MAL) on 12 October 1937. On 2 April 1947, MAL took to the skies with its first commercial flight as the national airline. Fuelled by a young and dynamic team of visionaries, the domestic carrier turned into an international airline in less than a decade. With the formation of Malaysia in 1963, the airline changed its name to Malaysian Airlines Limited. Soon after, Borneo Airways was incorporated into MAL. Within 20 years, MAL grew from a single aircraft operator into a company with 2,400 employees and a fleet operator using the then latest Comet IV jet aircraft, six F27s, eight DCs and two Pioneers. In 1965, with the separation of Singapore from Malaysia, MAL became a bi-national airline and was renamed Malaysia-Singapore Airlines (MSA). A new logo was introduced and the airline grew exponentially with new services to Perth, Taipei, Rome and London. However, in 1972, the partners went separate ways. Malaysia introduced Malaysian Airline Limited, which was subsequently renamed Malaysian Airline System and took to the skies on 1 October 1972. It was later branded Malaysia Airlines and continues to...
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...In Malaysia, airlines are separated into two; 1) Passenger airlines and 2) Cargo airlines. The passenger airlines in Malaysia are Air Asia, Malaysia Airline System Berhad (MAS), Firefly which is owned by MAS, Layang-Layang Aerospace which is based in Sabah to provide air services to Layang-Layang Island, Berjaya Air which is owned by Berjaya Group, Sabah Air and last but not least Hornbill Skyways which is a helicopter service that operates in the rural area of Sarawak. Other than passenger airlines, there are also three cargo airlines that operate in Malaysia. They are the Athena Air services, MAS cargo and Transmile Air Services. Despite the various kinds of air operators, the airline industry in Malaysia is being monopolized by two main operators. The first one is Air Asia and the second one is Malaysia Airlines System Berhad (MAS).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. Malaysian Airline System Berhad (Malaysia Airlines) provides scheduled airline transportation services from Malaysia. It principally provides passenger and cargo transportation services through its fleet of 129 aircraft and serves more than 100 destinations across the world. The company also offers maintenance, repair and overhaul services for aircraft. Moreover, the company offers services such as engineering, catering, computerized reservation...
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...[pic] ACFI 3217 International Development in Accounting Comparing of the performance of Malaysia Airlines and China Southern Airlines Summary The purpose of this report was discovering and analyzing the performance of Malaysia Airlines and China Southern Airlines; and the benefits and problems in the U.S. adopting of IFRS will be mentioned. First, it evaluates the performance of Malaysia Airlines and China Southern Airlines through five ratios analysis which is profitability, liquidity/solvency, working capital efficiency, long term financial structure and investors’ perspective. Next, on basic of part one analysis, discuss the limitations of financial reporting, meanwhile, companies from different countries which are using different accounting standards should be noticed. Follow on; depend on the situation of financial report, using the SWOT methods to analyze the primary challenges faced by Malaysia Airlines and China Southern Airlines. Finally, discuss the positive and negative of U.S. adopting IFRS. Contents 1. Introduction 1 2. Ratio analysis of the MAS and CZ 1 3. SWTO analysis of the MAS and the CZ 12 3.1. Strengths 12 3.2. Weaknesses 13 3.3. Opportunities 15 3.4. Threats 16 4. The benefits and problems if US adopt IFRS 18 5. Conclusion 26 6. Reference 27 7. Appendices 36 7.1. Appendices 1—Analysis Current Ratio 36 7.2. Appendices 2—Analysis Quick Ratio 36 7.3. Appendices...
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...MALAYSIA AIRLINE SYSTEM BHD (MAS). Company Profile Malaysia Airlines started when a joint initiative of the Ocean Steamship Company of Liverpool, the Straits Steamship of Singapore and Imperial Airways led to a proposal to the Colonial Staraits Settlement government to run air service between Penang and Singapore. The result was incorporation of Malayan Airways Limited (MAL) on 12 October 1937. On 2 April 1947, MAL took to the skies with its first commercial flight as the national airline. However, it was renamed as Malaysian Airlines. Soon after Borneo Airways was incorporated into MAL. In 1965, with the separation of Singapore from Malaysia, MAL became a bi-national airline and was renamed Malaysia-Singapore Airlines (MSA). A new logo was introduced and the airline grew exponentially with new services to Perth, Taipei, Rome and London. However, in 1973, the partners went separate ways. Malaysia introduced Malaysian Airline Limited, which was subsequently renamed Malaysian Airline System or in short, Malaysia Airlines. While MAS has grown to become Southeast Asia’s largest airlines, it also becomes one of the world’s premier international carriers. Malaysia Airlines is listed on the stock exchange of Bursa Malaysia under the name Malaysian Airline System Berhad. The Malaysia Airlines headquarters is located at Sultan Abdul Aziz Shah Airport Subang, Selangor, Malaysia. It is leading by the Chairman, Tan Sri Md Nor Yusof and Tengku Datuk Seri Azmil Zaharuddin as a Managing...
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...distribution (including by e-mail) is permitted without the consent of the copyright holder. The author (which term includes artists and other visual creators) has moral rights in the work and neither staff nor students may cause, or permit, the distortion, mutilation or other modification of the work, or any other derogatory treatment of it, which would be prejudicial to the honour or reputation of the author. Designated person authorising scanning: Anne Petrie Module: Managing Human Resources Module no: UMPCYC-15-M ISBN/ISSN: 9780415893701 Extract Author: Rozhan Othman and Wardah Azimah Sumardi Extract title: Malaysia Airlines: Talent Management in aTurnaround situation Book or Journal Title: Global Human Resource Management Casebook, Hayton J.C Publisher: Routledge, Oxford, 2012 Page numbers 299 - 307 Library Digitisation Service Malaysia Malaysia Airlines: Talent Management in a Turnaround...
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...As an oligopolist industry, airline industry is far from free of crisis that will affect the airline industry’s way in approaching the business in order to sustain their potential ability in the industry. Any slump in economics, political and etcetera will massively contribute to the downturn of certain airliners and in more serious cases, rendering the business and eventually might lead to bankruptcy. Malaysian Airlines have had a rough time in some years regarding their financial stability, and such crisis forces the airliner to change their ways in approaching the business in a way that will rescue them into staying in the industry. Generally, Malaysia Airline will be taken as the main reference on each and every case appeared on this paper One of the crises that came along to strike the airline industry is regarding the increment of the global fuel price. Early in 2008, Malaysian Airlines got struck and highly affected by the global phenomenon, thus marking the year as the toughest year for the airliner. The fluctuations of fuel price which ended up in mass increment stunned the airliner and it took them up to 9 months long before resolving the uncertainties of the company’s capability in enduring such crisis. The jet fuel increment was reportedly climbed up to USD$182 per barrel. This economic crisis had highly influenced the way Malaysian Airlines approach in managing their financial sources in a more positive way. Malaysian Airlines had came back strong after the...
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...Global Industry Trends & Future Outlook The global airline industry basically comprises of air transport service providers of both passengers and cargo. According to the International Air Transport Association (IATA), the global airline industry has doubled its revenue over the last decade, from US$369 billion in 2004 to a projected US$746 billion in 2014 (PwC, 2015). According to the IBISWorld Industry Report (2015), the global airline industry looks set to increase its revenue growth by 1.2% to $783 billion. In the recent 2015 IATA’s Annual Review, we have witnessed good profit in the global airline industry with a strong net profit of US$16.4 billion in 2014. Through the 1980s and 1990s, the emergence of low-cost carriers (LCC) has a big...
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...significant roles for sustainability of airline business. In the global and modern world, business environment also become more complicated and more challenging to the airlines. It is important for airline manager to know because it will help the airline to plan and prepare for any changes that threatens the survival of airline business. The 21st century comes with so many changes, new technologies invented, circular of income of a country increase with better economy situation, air travel demand increasing very high which are given the airlines benefit to do business. Apparently, the 21st century not only bring benefit, but also bringing new risks for airline business such as fuel price volatility, natural catastrophic that had never been experienced before and others. The risks if not be taken with cares and smart strategies will threaten the sustainability of airlines. This writing try to identify issues arising and new risks that affecting airline business. Identifying significant issues and risks is very crucial for airline management to make planning, scheduling, price setting for flight tickets, demand forecasting, traffic movement, and the most important is managing capacity. Therefore, knowing impact of issues and new risks in airline business is very crucial. Survival of airline business is important for the global economy, airlines play important role as major contribution for Growth Domestic Product (GDP) of a country. Airlines industry is inter-related with other...
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...Management Cases http://bmc.sagepub.com/ Business Turnaround Plan: The Experience of Malaysia Airlines Herwina Rosnan and Razmah Mahmod South Asian Journal of Business and Management Cases 2012 1: 211 DOI: 10.1177/2277977912459444 The online version of this article can be found at: http://bmc.sagepub.com/content/1/2/211 Published by: http://www.sagepublications.com On behalf of: Birla Institute of Management Technology Additional services and information for South Asian Journal of Business and Management Cases can be found at: Email Alerts: http://bmc.sagepub.com/cgi/alerts Subscriptions: http://bmc.sagepub.com/subscriptions Reprints: http://www.sagepub.com/journalsReprints.nav Permissions: http://www.sagepub.com/journalsPermissions.nav Citations: http://bmc.sagepub.com/content/1/2/211.refs.html Downloaded from bmc.sagepub.com at Fachhochschule Kufstein on December 3, 2013 >> Version of Record - Jan 8, 2013 What is This? Downloaded from bmc.sagepub.com at Fachhochschule Kufstein on December 3, 2013 Case Business Turnaround Plan: The Experience of Malaysia Airlines Herwina Rosnan Razmah Mahmod South Asian Journal of Business and Management Cases 1(2) 211–221 © 2012 Birla Institute of Management Technology SAGE Publications Los Angeles, London, New Delhi, Singapore, Washington DC DOI: 10.1177/2277977912459444 http://bmc.sagepub.com Abstract Malaysia Airlines (MAS) is the Malaysian national air carrier. It was incorporated during the early days...
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...CRISIS COMMUNICATION AND THE CASE STUDY OF MISSING MALAYSIA AIRLINES FLIGHT MH370 I. Literature review In a ‘vulnerable’ society that has been easily affected by many different types of crises such as natural and man-made disasters, in disregard of where you live and what you do, no community or organization is immune from crisis. In order to provide clear definitions and deeper understanding crises of all types, scholars have developed theories to handle these events. A wide range of crisis fields are studied including psychology (Morgan et al., 2002), sociology (Clarke & Chess, 2008) or political perspective (Birkland, 2006). In addition, other research involved communicating in crisis (Reynolds, 2002). All of these disciplines, even different, combine to build a theoretical background on various approaches to crisis communication and contribute to establish crisis response guidelines for organizations. Among the prominent theories on crisis communication, the Situational Crisis Communication Theory generates a link between Attribution Theory firstly built by Fritz Heider in the early part of the 20th century which addresses the processes by which individuals explain the causes of behavior and events and crisis response strategies which represent what an organization does and says after a crisis. To protect reputation, it is crucial for the organization to consist the responsibility acceptance of the crisis response with the stakeholder attributions. Coombs (2006)...
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...CRISIS MUST BRING CHANGE IN THE AIRLINES INDUSTRY IN MALAYSIA. INTRODUCTION Airline can be described as provide air traffic services to passenger from origin to destination. Airlines also can be known as oligopoly market structure. This is because only few firms that involve in producing similar or differentiated product, that is air traffic services. Many characteristic or factor that make airline as oligopoly market structure and ca n be categorized as high barrier to entries. Because of that, small factor can be easily affect and bring the airline into crisis. The industry generates substantial cash flow to repay debt and buy new airplanes, which, like most tangible goods, depreciate over time. The industry also is distinguished by the amount of time and effort which must be concentrated on customer service, requiring a high amount of labour. More than one third of airlines’ revenue is consumed by the industry’s work force. Revenue from aircraft industry can be simplified as from sources such as passengers (75 percent), cargo shippers (15 percent) and other transport services. About 80 percent of passenger revenue comes from domestic tickets, while frequent flyers, which travel more than 10 times annually, constitute about 40 percent of trips but only 8 percent of the total flying public. What is ‘crisis’? A crisis is any event that is, or expected to lead to, an unstable and dangerous situation affecting an individual, group, community or whole society. Crises are...
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...Full Length Research Paper Branding satisfaction in the airline industry: A comparative study of Malaysia Airlines and Air Asia Kee Mun, Wong* and Ghazali, Musa Faculty of Business and Accountancy, University of Malaya, 50603 Kuala Lumpur, Malaysia. Accepted 23 March, 2011 Brand is crucial in differentiating the superiority of products or services over others. This is an exploratory study examining the differences in brand satisfaction between Malaysian Airlines (full service airlines) and Air Asia (low cost airlines) in Malaysia. 350 usable questionnaires were obtained from respondents in the two main airlines terminals in Kuala Lumpur. Exploratory factor analysis revealed seven brand satisfaction dimensions which are tangibles, price, core service, reputation, publicity, word-of-mouth, and employee. Generally, respondents were not satisfied with all brand dimensions of both airlines. The level of brand dissatisfaction is also higher for Malaysian Airlines compared with Air Asia. Air Asia was perceived better than Malaysian Airlines in price, publicity, and word-of-mouth. On the other hand, Malaysian Airlines was perceived better in tangibles, core service, reputation, and employee. The paper highlights some of its theoretical, managerial and marketing implications to the development of airline industry. Key words: Airlines, branding, satisfaction, Malaysia Airlines, Air Asia. INTRODUCTION The world airline industry has gone through a rollercoaster ride for the past...
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