Malaysia Airline

Good Essays
English only

July 2007

PRIVATIZATION AND RE-NATIONALIZATION OF MALAYSIA AIRLINES (Submitted by the ICAO Secretariat)

1.

BACKGROUND

Malaysia Airlines (MAS) was incorporated as Malaysia’s flag carrier in 1971 following the breakdown of Malaysia-Singapore Airlines partnership. Since then, MAS has continued to expand its network and fleet. By mid-1980s, MAS had a total of about 60 domestic and international destinations in its network and a fleet of over 35 aircraft. However, MAS’s balance sheet suffered especially from the loss-making domestic services where the Government rarely allowed increases in fares because of a policy of promoting trade and tourism in rural East Malaysia.

1.1.

2.

LIBERALIZATION OF REGULATORY FRAMEWORK

2.1. Under the Government’s privatisation plan, MAS became the first governmental agency to go partly private in 1985. The Government sold 40 per cent to the public, including Brunei Investment Agency, while keeping total 60 per cent in the hands of Malaysian Central Bank Negala and local Governments. The privatization raised additional funds for MAS’s capital expenditure on aircraft fleet expansion. The Government had also considered the idea of separating the airline’s domestic and international operations into two divisions to improve the profitability of the international airline, but the plan was subsequently abandoned. In 1994, as one of the attempts to reverse the weak financial position vulnerable to rising labour costs, higher interest rates and reluctant lenders, the Central Bank sold its 32 per cent controlling stake to Malaysia Helicopter Services (changed name to Naluri in 1998) led by Tajudin Ramli1. The move eliminated the Government as the largest shareholder, although the Government continued to hold a “golden share” giving it a veto on board decisions, and State-owned entities acquired a minority stake in the airline. 3. EFFECTS AND DEVELOPMENTS

3.1. For consecutive three years after privatization

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Malaysia Airlines

    • 958 Words
    • 4 Pages

    Strategy in the Market Place: Malaysia Airlines (MAS) has announced their new business plan for year 2012, aiming to restore their profitability on the premium sector, as to become the preferred premium carrier. (Business Plan, Our Way Forward, December 2011, page7) By achieving the vision as to become the preferred premium carrier, they will be launching a new regional premium airline. In the first half of 2012, they will launch new short-haul brand, flying an entirely new Boeing 737-800 fleet…

    • 958 Words
    • 4 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Malaysia Airlines

    • 349 Words
    • 2 Pages

    Malaysia Airline should reduce the price of ticket to attract more passengers. Although the profit will be reduce, but the increase of the number of passengers will cover it back. In long term, it will bring more benefit to the company. Malaysia Airline also needs to have more promotion to attract the low income of passengers. For example, promote special ticket for a group of students or for family to travel during the school holiday. This is because during holiday, many of the students and family…

    • 349 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Malaysia Airlines

    • 518 Words
    • 3 Pages

    Malaysia Airlines system is the symbol of flag carrier of Malaysia and owned by the government which is shelter under Tan Sri Md Nor Yusof as the Chairman, Ahmad Jauhari Yahya as the Managing Director and Mohd. Rashdan Mohd. Yusof as the Resign member. This airline is founded in 66 years ago on 1 May 1947 as the name of Malayan Airways then after Malaysia gained independence the airline being renamed as Malaysian Airways and it is started the commenced of operation in 41 years ago on 1 October 1972…

    • 518 Words
    • 3 Pages
    Good Essays
  • Better Essays

    Malaysia Airlines System

    • 603 Words
    • 3 Pages

    MALAYSIA AIRLINE SYSTEM (MAS) Corporate Information Historical evolution Malaysia Airlines had its humble beginning in the golden age of travel. A joint initiative of the Ocean Steamship Company of Liverpool, the Straits Steamship of Singapore and Imperial Airways led to a proposal to the government of the Colonial Straits Settlement to run an air service between Penang and Singapore. The result was the incorporation of Malayan Airways Limited (MAL) on 12 October 1937. On 2 April 1947, MAL…

    • 603 Words
    • 3 Pages
    Better Essays
  • Good Essays

    Malaysia Airline System

    • 2772 Words
    • 12 Pages

    Company Perspectives: From a small air service that began with a 5-seater twin engined Airspeed Consul in 1947, Malaysia Airlines has grown into an award-winning airline with a fleet of more than 100 aircraft, servicing more than 110 destinations across six continents. Today, Malaysian Airlines System Berhad is a corporation with a vision of global expansion. The airline's network will grow extensively in response to consumer demand for worldwide coverage. The airline's enhanced in-flight services…

    • 2772 Words
    • 12 Pages
    Good Essays
  • Powerful Essays

    Malaysia Airlines System

    • 2394 Words
    • 10 Pages

    declining sales. As a scenario, this study would be taking the point-of-view of a Marketing Manager idealising and justifying the team’s actions in a sales boost bid. For this paper, studies would be based on the national carrier of Malaysia, Malaysian Airlines System (thereafter referred to as MAS). They have been dogged by continuous sales decline since the beginning of this decade. In the beginning of 2006, the company recorded some RM 10 billions of loss for just over the past 2 years.…

    • 2394 Words
    • 10 Pages
    Powerful Essays
  • Satisfactory Essays

    Backgroud Of Malaysia Airlines Malaysia Airlines System Berhad is also known as MAS in short. MAS is founded in 1947 as Malayan Airways, but it has change its name as Malaysian Airline System in 1 October 1972 .MAS is the flag carrier which is own by government of Malaysia. MAS headquarters is situated at Sultan Abdul Aziz Shah Airport in Subang, Selangor. MAS operates flights at its first base in Kuala Lumpur International Airport, and secondary base in Kota Kinabalu. Malaysian Airlines System Berhad…

    • 352 Words
    • 2 Pages
    Satisfactory Essays
  • Better Essays

    the airline industry. It is very unpredictable and with that prone to high uncertainty levels. The demand is volatile and the capacity is largely fixed which leads to a number of issues in need of being assessed. One of those is the jet fuel price volatility which impacts the airline industry dramatically. The constant shifting around of fuel costs, largely based on political developments which are uncontrollable, cause great uncertainty for most of the airlines, including Malaysia Airlines. Even…

    • 1038 Words
    • 5 Pages
    Better Essays
  • Satisfactory Essays

    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…

    • 361 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Airline Industry in Malaysia

    • 4657 Words
    • 19 Pages

    Industry Overview The airline industry is a large and growing industry. In the past years, air travel has been growing by 6% a year and scheduled airlines carried more than 1 billion passengers in 2008. The airline industry involves large capital requirements. For example, the requirements for aircraft, close monitor by the government regulations, competition from other tourist transport and the requirement to have high level of expertise to operate and manage. In the airline industry, aircraft manufacturer…

    • 4657 Words
    • 19 Pages
    Powerful Essays