Malaysia Airlines: Moving On Towards Recovery

9th Mar 2015

Malaysia Airlines (MAS) strongly believes it will regain the public’s confidence despite the year ago twin crises involving flights MH370 and MH17.  It is actively pursuing recovery efforts to keep its business on course while still maintaining Australian flight routes in its agenda. 

Although volume of sales had significantly dropped after the incident, Flight Centre, a leading travel retailer in Australia revealed that MAS ticket sales have shown signs of improvement for the past 12 months.

Presently, the airline is implementing its medium-term business plans which includes rightsizing its workforce from a current level of 20,000 personnel to a leaner 14,000.  It is also cancelling less-profitable flight routes.  These recovery efforts are now being spearheaded by Christopher Mueller, a seasoned veteran in the European airline industry.  Prior to his transfer to MAS, Mueller served as Chief Executive Officer of Ireland’s Aer Lingus.

Meanwhile, MAS Regional SVP, Lee Poh Kait stated that MAS will regain the public’s trust in due time.  He expects that 2015 will turn out to be a much better year for the company, with steady growth rates in the horizon.  

This positive outlook is bolstered by the fact that fuel prices had plunged by almost half its original price.  For MAS and other airline companies, airline cost reductions triggered by a softening of fuel prices offers a tremendous boost.

Before the twin crises, the company had pushed for increase in flight capacities to and from Australia.  In fact, pre-crises flights to major cities in the region had grown to a rate of 74 per week, representing a growth rate of more than 30 percent.

More recent data reveal that Australian flight routes had filled seating capacities at 60 percent rate on the average.  Last year, MAS averaged higher at 82 percent.

MAS identified Europe as well as the Middle East as those regions where MAS flight routes failed in terms of income generation.  While existing capacities on these routes will be reduced, the company will, on the other hand, shift its focus on the more income-generating SE Asian and domestic flight routes. 

Despite the drop in filled capacities, the airline’s SVP expressed his appreciation of the current support coming from some of its patrons.  He added that the coming Easter break has brought in substantial bookings – a positive sign that the company might indeed be seeing better days ahead.