Malaysia Airlines (MAS) is our country, Malaysia national airlines. MAS was established in 1 May, 1946 as Malayan Airways. The headquarters of MAS are located on the grounds of Sultan Abdul Aziz Shah Airport in Subang. It is undoubtedly that MAS was an award-winning airline. The airline has won World Travel Award (WTA) 2013 and Best Airline Signature Dish 2012. MAS has more than 1000 aircrafts including A380 airbus, Boeing 737- 800 and Boeing 747- 400P. These aircrafts fly to more than 110 destinations around the world. Some of the destinations are Tokyo, London and Paris. The missions for MAS are to provide air travel and transport service that rank among the best in terms of safety, comfort and punctuality as well as to be a profitable airline. …show more content…
It is undeniable that one of the crises being faced by MAS is financial problem. Moreover, our national airlines also faced a very severe branding problem. Malaysia Airlines has suffered from two aviation tragedies, which are MH 370 incidents and MH 17 incidents. In order to overcome these severe crises, MAS need to apply several effective solutions including restructure the business model as well as rebrand the national airlines. If MAS cannot overcome these two main crises, this airlines will bankrupt soon. As Malaysian who love and care for our national flag carrier, Malaysian should concern about the MAS crises, including the causes that lead to the crises, the effects from the crises as well as the solutions to solve these …show more content…
Firstly, the aircrafts fuel prices have been increased all over the years. The drastic increased of the fuel prices has caused MAS to pay more. Secondly, the maintenance and repair costs for the aircrafts have been escalated. Normally, the aircrafts for our national airlines are old and have been used for many years. Thus, these aircrafts need to be maintained and serviced regularly to ensure the safety of the aircrafts and passengers. The maintenance and repair costs are high. Thirdly, MAS is facing a high competition. MAS has to compete with strong and direct competitors from Malaysia as well as other countries. For example, MAS faces competitions from Singapore National Airways internationally and Air Asia dosmetically. Next, there are too many unprofitable routes for MAS. 40 percent of the current routes are unprofitable. Some of the unprofitable routes are Los Angeles, Buenos Aires and South Africa. MAS has lost a lot of money to run these unprofitable routes. This financial crisis has caused a very serious effect. The effect is the cash flow for MAS has been weaken. MAS is now running out of cash. Obviously, the incomes for MAS are not enough to support the airline basic expenses. The airline has not enough money to pay for fuels and salaries for their staffs. MAS cannot afford to pay other expenses as well. The airline has no money to continue for its operations. This will lead to bankruptcy eventually. Our
False. Under typical circumstances, which is to say, if government regulators were not involved, we might expect for the industry to coalesce around one dominant competitor; however, as it is, there are anti-trust statutes preventing such a merger, and therefore it is likely there remain a few major competitors in the space who consume 80-90% of the market share with the remaining share going to a few minor competitors for whom the major players are legally required to provide network bandwidth. Also, there is some differentiation of product, e.g. CDMA vs GSM, that allows for the development of two networks within the market and increases switching costs for the customer, such that they are relatively sticky
The case highlights the challenges faced by the airline due to increasing fuel costs, competition from low-cost airlines, and the after-effects of the financial crisis. The case discusses "Transform 2015", the turnaround program adopted by the airline in 2012. It highlights the key measures adopted in the turnaround program. While some industry experts were convinced that the turnaround strategies would help revive the airline, others were sceptical about it. The case ends with a discussion on the challenges that lie ahead of the company.
These operating cost have not been pasted on to the consumer (Motif Investing (2016). However, in manufacturing Boeing and Airbus hold a large proportion of the market and with other player joining the market it is unknown at this time if this trend will continue for Boeing and Airbus as consumers may take a benefit with new competitors surfacing (Motif Investing (2016). The concern and problem extend to government regulations placing local and foreign market competitive constraints along with the future fuel market is yet to yield. In looking into the current trends and future competition as (Motif Investing (2016) discusses “consumer confidence is may be as important as any of them” (Motif Investing (2016). It may boil down to consumer preference and being on the front line in customer service may in fact be the deciding factor for company growth. According to (Wahlen, Baginski, & Bradshaw, (2014), asses the financial statements and deduction is that it is evident that Delta Airlines has a higher shareholder equity as well as cash flow in operations and investments. Cash and short term investments have been relatively the same compared to Deltas showing a growth and double the revenue and less liabilities per capita in shareholder equity. Southwest has nearly double less activity in investments.
The purpose of this report is to show how Qantas was affected by global financial crisis. Qantas is the second oldest airlines in the world. It is one of the tough competitors for other airlines. But Qantas was affected badly during the crisis, the tickets prices went up because the fuel prices went up. I have suggested few recommendations for Qantas to bounce back , what can be done without laying of the employees and have also spoke about cost cutting.
The Airline Industry is a fascinating market. It has been one of the few industries to reach astounding milestones. For example, over 200 airlines have gone out of business since deregulation occurred in 1978. Currently, more than 50% of the airlines in the industry are operating under Chapter 11 regulations. Since 9/11, four of the six large carriers have filed for and are currently under bankruptcy court protection. Since 9/11 the industry has lost over $30 billion dollars, and this loss continues to increase. Despite the fact that the airline industry is in a state of despair, JetBlue has become the golden example, a glimpse of what the industry could be.
Lufthansa, one of the world’s biggest airliners, has divisions handing maintenance, catering and air cargo. Since the World War II the airline industry has never earned its cost of capital over the business cycle (Hitt, 2010). Most of the airline companies have either filed for bankruptcy or are being bailed out by their government. Lufthansa had also gone through these tough times, but had resurfaced to become one of the worlds most profitable airline company. The company adapted a transnational strategy, seeking to achieve both global efficiency and local responsiveness. Lufthansa’s monopoly in Germany came to a halt with the creating of the European Union. All the EU member countries become one regional and therefore the European competition became, an increasingly a local competition. Lufthansa created its regional Hubs, to cater for its domestic market. But the availability of substitutes such as bullet trains and the Euro tunnel, made is necessary for Lufthansa to create short traveling time, customizations and quality standards in the region to achieve a competitive advantage. But outside the EU there are no substitute to air travels as such all the flag carriers are competing in the market, the international airline industry is a highly competitive environment. A new force has also emerged in the world of air travel, in the form of three Gulf airlines with jumbo ambitions. Within a decade Dubai’s Emirates, Qatar Airways and Eithad from Abu Dhabi have between them carried the capacity of two hundred million passengers (Micheal, 2010). The company had to go global and therefore adopted the international corporate-level strategy, where Lufthansa will ope...
It is running into huge losses of -2,843 million dollars till June,2014. They have lost great domestic share due to rise in the competition in the industry and with the arrival of Virgin airlines. They are have elevated risk and leverage levels. Their market share has decreased a great deal from 32.7% 2003 to almost half i.e 17.2% till 2013. Which is a great setback for them. Their overall passengers have increased but their cost is increasing at a higher rate. Although still being market leaders they are still not able to cope up with the pressure. They are considering of making their airlines’ frequency more in some parts of the world. But, that will need
Kingfisher Airlines (KFA) was founded by Vijay Malaya and he is the chairman of United Breweries group (UB group) in the year 2003. Its first airplane was launched from Mumbai to Delhi in 9th may 2005. It started as a premium business class airline company. The airlines have a tag line “Fly the good times”. At the launch of airline, Vijay Malaya said “we are committed to achieving our ambition of making Kingfisher Airlines, India’s largest private airline both in capacity and market share. The airline ushered in a new era of luxury in India’s domestic aviation sector and its brand new aircraft with stylish red interiors, and smartly dressed crew and ground staff. Kingfisher was the first Indian airline to have in-flight entertainment (IFE) systems”. (Malaya, 2005). Kingfisher airlines are one of the seven airlines which were awarded the rating of five stars by skytrax. It operates 400 flights daily including the regional and international services. In 2009 it gave the highest market share in Indian airlines industries, carrying more than 1 million passengers. The main mistake was lack of understanding of customer requirements and luxurious facilities in airlines. Organizations focus on reducing costs and usually just CEO’S and top level managers prefer business class travel. Rest of the staff mostly travels by economy class. Moreover, buying most expensive business class tickets doesn’t go down well, when seniors aim to project the image of walking the talk. Secondly, the company is facing financial crisis since Mid-2008. After merging with Air Deccan in 2007, it is a low-cost airlines, provides minimum frills to customers at reasonable rates. Th...
When we think about premium brands, we believe that the brand is worth to pay for. Excellence quality always come with expensive price is not always true; Singapore Airlines proved this statement is wrong. Singapore airline or SIA is a flag carrier of Singapore, was ranked as a second place in world airline award, voted by airline passengers from around the globe. SIA has earned a stellar notoriety in the furiously competitive aviation business for offering clients with excellence quality of services. Not only just the quality of service makes them become one of the world-class airlines, but the lowest price airline as opposed to its main rivals make them stand out among its competitors. There is no doubt that how SIA has made its way up to one of the world largest
The Malaysia Airline System (MAS) reported a loss of over RM1.3 billion for the Financial Year 2005. It was unacceptable to many parties such as the stakeholders and the government especially the announcement was made at the same time as some of MAS regional competitors reported strong profits in the same year.
Singapore Airlines Limited (IATA code: SQ/ SIA) is the national carrier of the Republic of Singapore which operates from its hub at Changi Airport, Singapore. Singapore Airline is a prestigious member of Star Alliance which consists of airlines such as Scandinavian Airlines and Lufthansa. The Singapore Airlines group has also diversify to cover over 20 airline-related subsidiaries businesses ranging from aircraft handling to travel agency. Singapore airlines is also the world second best airline in the year 2014 only behind Qatar Airways, an award given out by Skytrax, a consultancy and reviews site. (Channel News Asia, 2015) Singapore airline currently hire cabin crew over 9 countries.
Jet Airways is a Mumbai based airline which was incorporated as a limited liability company in April’92. In May’94, all the shares were transferred to Tailwinds International co-held by Naresh Goyal (60%), Gulf Air (20%), and Kuwait Airways (20%). In Oct’97, as result of change in civil aviation policy, forbidding foreign investment in passenger airlines, Goyal took control of the entire company.
In terms of implement CRM in Malaysia Airlines Berhad, the management have to identify who the airlines' customers are and what their customers’ needs and aspirations are. If airlines didn’t not receive profit from customer, how can airlines be sure airlines are serving their best to customers and applying their value to all business decision? If airlines had the means to do both, profits would have gone. Not only would airlines become more efficient, the shareholders also would see an investment in their only real source of revenue, the customer, and the meaningful profits in result. With so few new revenue opportunities, do airlines need more aircraft? Or instead should airlines consider a customer relationship management program that uncovers and maintains shareholder value. Airlines need to know and understand those customers who contribute the most to their bottom line. Providing customers with a good experience however and whenever they choose to contact you is a key part of managing relationships with them. Ovum defines customer relationship management (or CRM)
The Singapore Airlines needs to keep its superiority and stay on top of the competition in the international market, despite the bad times associated with a global economy or strategies implemented by main competitors.
The airline industry is very susceptible to changes in the political environment as it has a great bearing on the travel habits of its customers. An unstable political environment causes uncertainty in the minds of the air travellers, regarding travelling to a particular country.