SM Group Assignment
PEST analysis
PEST analysis most commonly is used to measure a market. By doing the PEST analysis Malaysia Airlines will link the entire 4 factors that may affect their business in general and competitive environment.
a) Political/ Legal
Malaysia airline as a Malaysian national flag airlines, it is compulsory and a must for them to follow and obey the political decision and governmental policies. In the late1990s, there was increase privatization and deregulation of the airline industry in Asia. It was noticeable that some Asian countries established open-skies agreements while others allowed the entry of private airlines. For instance, in 1997, a few limited liability company (LLC) growth up quickly after Malaysia signed an “open-skies” agreement with the United States. However, this agreement had expanded the travel market but in reality MAS would also have to operate in a more challenging environment with other competitions. b) Economics
Nowadays the global fuel price is increasing, it influenced Malaysia Airlines operating cost for sure which will directly result the loss in their profit. Besides, unstable fuel price that influenced economy will affect their share price in stock exchange too. Furthermore, Malaysia Airlines had increase their flight ticket fares as a way to cover up the administration and operating cost. As the increment of ticket fares occurred, local citizens with lower or medium income holder to lessen their frequency to travel on flight. During to the Asian Financial Crisis in 1997, Malaysia Airlines suffered in the massive losses of 260million. As a way to overcome the crisis, the airlines cut a lot of routes which are unprofitable. Besides approximately a decade later in 2011, frightening loss of RM2.52 billion was “achieved” by Malaysia Airlines and breaks its historical record. This incident had pushed the management to terminate the flight to Surabaya, Karachi, and Dubai in January of the same year.
c) Social-Cultural
For the social
PEST analysis most commonly is used to measure a market. By doing the PEST analysis Malaysia Airlines will link the entire 4 factors that may affect their business in general and competitive environment.
a) Political/ Legal
Malaysia airline as a Malaysian national flag airlines, it is compulsory and a must for them to follow and obey the political decision and governmental policies. In the late1990s, there was increase privatization and deregulation of the airline industry in Asia. It was noticeable that some Asian countries established open-skies agreements while others allowed the entry of private airlines. For instance, in 1997, a few limited liability company (LLC) growth up quickly after Malaysia signed an “open-skies” agreement with the United States. However, this agreement had expanded the travel market but in reality MAS would also have to operate in a more challenging environment with other competitions. b) Economics
Nowadays the global fuel price is increasing, it influenced Malaysia Airlines operating cost for sure which will directly result the loss in their profit. Besides, unstable fuel price that influenced economy will affect their share price in stock exchange too. Furthermore, Malaysia Airlines had increase their flight ticket fares as a way to cover up the administration and operating cost. As the increment of ticket fares occurred, local citizens with lower or medium income holder to lessen their frequency to travel on flight. During to the Asian Financial Crisis in 1997, Malaysia Airlines suffered in the massive losses of 260million. As a way to overcome the crisis, the airlines cut a lot of routes which are unprofitable. Besides approximately a decade later in 2011, frightening loss of RM2.52 billion was “achieved” by Malaysia Airlines and breaks its historical record. This incident had pushed the management to terminate the flight to Surabaya, Karachi, and Dubai in January of the same year.
c) Social-Cultural
For the social
Bibliography: Malaysian Airline System Berhad (MAS) - Financial and Strategic SWOT Analysis Review. (2011, November). Retrieved May 22, 2015, from researchandmarkets: http://www.researchandmarkets.com/reports/1323234/malaysian_airline_system_berhad_mas_financial Huq, M. (n.d.). MALAYSIA AIRLINES SWOT ANALYSIS/ETHICAL ISSUES History of Malaysia Airlines. Retrieved MAY 22, 2015, from academia: http://www.academia.edu/7047848/MALAYSIA_AIRLINES_SWOT_ANALYSIS_ETHICAL_ISSUES_History_of_Malaysia_Airlines