Analysis on Malaysia Airlines

Topics: Airline, Malaysia Airlines, Singapore Airlines Pages: 2 (361 words) Published: April 7, 2013
As reported in BBC news 2012, Malaysia Airlines have recorded a significant net loss of RM2.5 billion for the year ending 31 December 2011. Malaysia’s national airline claimed that it was due to the 21% rise in the fuel cost during the year. However, the Group Chief Executive Officer of MAS, Ahmad Jauhari Yahya, stated that labor productivity also contributed in the incident.

Malaysia Airlines have developed alternatives courses of actions such as launching new regional premium airline and collaborate with Air Asia for mutual benefits. Perhaps most important, though, is the culture of the organization. MAS should implement staff redeployment for greater effectiveness. Besides managing the human resources, MAS has to control its costs such as fixed and operating costs. These cost include the acquisitions of airplane, labor wages and others necessary expense. Furthermore, MAS should make further route reviews to cut down the unnecessary expenses.

Even though, collaboration with other airline companies could increase the profit margin of MAS, it does not work well in long term. Human capital is the biggest obstacle faces by MAS. Salaries of the 20,000 employees are higher than other companies and free flight tickets are issued to their families. This leads to a higher expense cost. Besides that, an employee works more than 15 years in average and consequently, new staffs could not enter into the workforce.

Hence, staff redeployment is one of the best methods to solve the crisis of MAS currently. Programs such as “Voluntary Leave Programme, VLP” should be implemented in order to reduce the costs and initiatives. MAS offers this program to its employees to take a break of maximum two years of unpaid leave while being assured to continue their employment in MAS. Besides that, MAS could also implement job rotation in order to increase the productivity of the employees. This would lead to a higher productivity and create a better working culture.

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