malaysia airlines ppm assignment 1

8/10/2019 Malaysia Airlines PPM Assignment 1

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Malaysia Airlines

Route Rationalization How this turned the business around a third time

Ankita Dash 12DM -026 Mayank Singh 12DM-084 Mithila Kanugo -12DM-088 Vishal God


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INTRODUCTION - I

Flag carrier of Malaysia Commenced operations as Malayan Airways Limited (MAL) in 1937 when L

based Ocean Steamship Company partnered with the Straits Steamship CompImperial Airways.

Went public in 1955.

Changed name to Malaysian Airlines in 1963 whenMalaya, Singapore, Sabah and Sarawak formed the Federation of Malaysia.

Changed names again to MalaysiaAirlines in 1972 due to political issues wiLumpur and Singapore.

First period of unprofitability in 1997 due to the Asian Financial Crisis. Reporof of as much as RM 260 million after earning a record-breaking RM319 milliothe financial year 1996/1997.

Result: Business Turnaround Plan 1 was implemented .


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INTRODUCTION - II

Second period of unprofitability in 2005 primarily due to escalatcosts.

Result: Dato' Sri Idris Jala appointed as the CEO of Malaysia Airlithe Govt. of Malaysia.

The second Business Turnaround Plan was rolled out.


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Premium Segment - MAS under pressure from

full service carriers (FSCs)

FSCs have first class products, new and modern

aircraft and more routes.

Low Cost Carrier (LCC) Segment competition on

fares.

Hence challenge for MAS to reinvent itself.

Source : http://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/corporate-info/Business%20Transformation%20Plan%20(BTP%202).pdf
http://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/corporate-info/Business%20Transformation%20Plan%20(BTP%202).pdfhttp://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/corporate-info/Business%20Transformation%20Plan%20(BTP%202).pdfhttp://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/corporate-info/Business%20Transformation%20Plan%20(BTP%202).pdfhttp://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/corporate-info/Business%20Transformation%20Plan%20(BTP%202).pdf


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MAS impleme

spoke strateg

feeder traffic


7/11Source : http://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/corporate-info/Business%20Transformation%20Plan%20(BTP%202).pdf
http://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/corporate-info/Business%20Transformation%20Plan%20(BTP%202).pdfhttp://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/corporate-info/Business%20Transformation%20Plan%20(BTP%202).pdfhttp://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/corporate-info/Business%20Transformation%20Plan%20(BTP%202).pdfhttp://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/corporate-info/Business%20Transformation%20Plan%20(BTP%202).pdf


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The story today:

After the success of the BTP 2, Malaysia Airlines found itself in the grips of yet an

downturn, the worst they have experienced till date.

In 2012, MAS posted a meagre profit as compared to their expectations. (USD 16

The culprit was the rising fuel prices coupled with inefficiency creeping into the

system.

MAS found themselves operating at the costs associated with a Full Service Carr

even though their revenues were those of an LCC.

The high competition from Air Asia , Emirates and Singapore Airlines did not hel

matters.

In addition , the competition intensified when Lion Air Groups affiliate Malindo

launched in March 2013. They have since encroached on the LCCs domestic mark

Malaysia.


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Source : MASThese figures highlight the start of the downturn


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The Way Forward:

MAS should increase their Asia focus as these markets are experiencing tremendous growth and

The APAC (Asia Pacific region) is currently leading in terms of adding high net worth individual

Selective route optimization required for Europe. The unprofitable routes should be phased out

Existing fuel inefficient carries should be phased out in preference to newer fuel efficient versio

and Airbus A330s.

Routes in Africa and Argentina which are unprofitable should be cut.

Focus should be on new premium carriers to focus on international destinations within South -E

Source: MAS


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malaysia airlines ppm assignment 1

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