Malaysia Airlines: Case of Unprofitability

Topics: Airline, AirAsia, Low-cost carrier Pages: 3 (930 words) Published: March 6, 2010
Malaysia Airlines suffers major unprofitability since 1997, lost their market shares and recovered only in first quarter 2006 and 2007. To counter that, Malaysia Airlines has introduced its Business Turnaround Plan in 2008 to recover their market share among customers for improvements which covers from cost cutting measures to business strategies like: Cost cutting measures: introduced a convenient meal box for domestic routes and destinations under 3 flying hours. Network improvements: by scrapping unprofitable routes & code sharing strategy. Fare structure improvements: identify peak hours & not peak hours for fare distribution. The customers can expect a slight decrease in service quality due to service cost cutting measures that implemented by Malaysia Airlines but despite of that, the national flag carrier still serves top notch service in terms of frills that other airlines don’t offer. Cut only few frills for cost cutting measure.

Purchase fuel efficient aircraft.
2.1.1 Malaysia Airlines
Malaysia Airlines was founded in 1947 with name, Malayan Airways. Then, it was transformed to Malaysian Airways due to Malaysia gaining its independence. After that, it changed its name once more to Malaysia-Singapore Airlines and thereafter ceased its operation. It was then divided into Malaysia Airlines and Singapore Airlines. Operating as a flag carrier of Malaysia, Malaysia Airlines is carrying so many onuses on its back such as unprofitability, lost in competition and more despite on winning many awards in recent years. Few factors contributed to this, comprising network efficiency, load factors, fare factors and splurge expenditures which are, for example, the expensive purchase of paintings circa 2004-2007. It consequently affects the company’s business turnaround profit and contributed in losses in 1997 – 2002, making a little profit between 2002 and 2005 and other losses in 2006 – 2007....
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