Malaysia Airlines-Strategic Management

In Malaysia, there are actually 3 different Malaysia airlines companies which are providing airline services to its customers. These 3 airline companies are Malaysia Airline, Air-Asia and Berjaya-Air. In reality, these 3 different airline companies provide different kind of services for their customers with different needs. For now, let’s take a closer look at these 3 companies individually. First of all, Malaysia Airline System or better known as MAS, is Malaysia’s premium airline service with a fleet of 111 aircrafts in its network covering more than 100 destinations across 6 continents.

Malaysia Airline is actually very renowned around the world, this is due to the reason where Malaysia Airline has been voted and awarded for the Best Cabin Staff for 4 consecutive years from year 2001 until year 2004. Despite the fact where Malaysia Airline does provides domestic and international flight services, majority of the customers of Malaysia Airline are international flight customers.

There are actually a few reasons why most people choose other airline services when flying domestic and one of the main reason is because the cost of the domestic flight for Malaysia Airline is relatively more expensive compared to Air-Asia or Berjaya-Air. Although flying with the other 2 airline company is cheaper but less comfortable, most of the people still opt to choose the 2 latter companies is because most of the domestic flight in Malaysia are short distanced flight (less time spent on airplane).

However, when it comes to international flight, Malaysia Airline is always the first choice for most of the people simply because Malaysia Airline is one of the world’s best and most comfortable airline services. When it comes to domestic flight, the first company most people in Malaysia would think of is Air-Asia and not Malaysia Airline System. Air-Asia is actually established on year 2001 when Tune Air Private Limited takes over Air-Asia from DRB-Hicom. As of year 2004, Air-Asia now has 18 aircraft flying across Malaysia and few other neighboring countries such as Indonesia, Thailand, China, Philippines and Singapore.

Actually, many believe that the main customers of Air-Asia are people who are taking domestic flights. This is because compared to Malaysia Airline, Air-Asia offers very cheap ticket price for domestic and as well as international flights. Therefore, most of the people traveling with Air-Asia are budgeted travelers like students returning home or backpackers going backpacking in neighboring countries. Due to the reason where Air-Asia is considered as a young company, there are times where some problems may occur within Air-Asia such as delays in flights due to improper scheduling.

However, despite of the above reason, people still choose to fly with Air-Asia because of the cheap air fare where no other airline companies can offer within Malaysia. Lastly, the 3rd airline company in Malaysia is Berjaya-Air. Just as the name of the airline suggest, this airline company is fully owned by the Berjaya Group, a diversified conglomerate public limited company in Malaysia. Berjaya-Air operates the DeHavilland Dash 7 aircraft where this aircraft is designed specifically for destinations with short airstrips.

Because of this reason, most of the flight destinations in Berjaya-Air are to different island in Malaysia, such as Pangkor Island and Tioman Island although occasionally, Berjaya-Air still flies to places like Singapore. Therefore, Berjaya-Air is the first option in most of the cases where the customer needs to fly to Tioman or Pangkor Island. Actually, due to the reason where all these 3 companies have different targeted customers, these 3 airline companies in Malaysia can co-exist with each other without eating over each other’s profit margin.

Fortunately, because of this reason, the people in traveling around within or outside Malaysia now have more choices to choose from compared to the good old days. In these 3 airline companies, we choose Malaysia Airline System as our group project. In our group report, we touch on background of the company, internal and external analysis, generate strategies, choose strategies and recommend strategies for the company. In internal analysis part, we are looking for strengths and weaknesses of the company but in external analysis part, we are looking for threats and opportunities of the company.

For external analysis part, we spread to 2 parts which are general environment and industry or task environment. Then based on internal and external analysis, we generate strategies for the company which include strengths, weaknesses, opportunities, threats, strengths and opportunities’ strategies, strengths and threats’ strategies, weaknesses and opportunities’ strategies and weaknesses and threats’ strategies. Then based on generated strategies, we choose strategies. Basic for us choosing strategies based on vision, mission, resources and synergies.

After that, we will give recommend strategies for the company and the last one we will make conclusion for whole the report. 2. 0 BACKGROUND OF MALAYSIA AIRLINES SYSTEM Malaysia Airlines (MAS) (Malay: Sistem Penerbangan Malaysia; Chinese: ???????? ; MYX: 3786) is the flag carrier of Malaysia. Malaysia Airlines started its operation on 1987 after the airline changed its name from Malaysian Airline System. It is founded in 1947 by Malayan Airways. Then, it transformed to Malaysian Airways due to Malaysia gaining its independence.

After that, it changes its name once more to Malaysia-Singapore Airlines and thereafter ceased its operation. It was then divided into Malaysia Airlines and Singapore Airlines. Malaysia Airlines operates flights from its home base, Kuala Lumpur International Airport, and its secondary hub in Kota Kinabalu. Despite a financial restructuring exercise in 2006, Malaysia Airlines maintains a strong presence in Southeast Asia, East Asia, South Asia, Middle East and on the Kangaroo Route between Europe and Australasia.

Malaysia Airlines also operates transatlantic flights from Kuala Lumpur to Newark, via Stockholm, and transpacific flights from Kuala Lumpur to Los Angeles, via Taipei. In 1997, the airline flew the world’s longest non-commercial, non-stop flight from Boeing Field in Seattle to Kuala Lumpur, flying eastward passing the European and African continents and breaking the Great Circle Distance Without Landing record for an airliner on a Boeing 777-200ER longer than the record held by the Boeing 777-200LR. Malaysia Airlines non-aeronautical revenue sources include maintenance, repair and overhaul (MRO), and aircraft handling.

Malaysia Airlines has two airline subsidiaries: Firefly and MASwings. Firefly operates scheduled flights from its home base Penang International Airport which focus on tertiary cities, while MASwings focuses on inter-Borneo flights. Malaysia Airlines has a freighter fleet operated by MASKargo, which manages freighter flights and aircraft cargo-hold capacity for all Malaysia Airlines’ passenger flights. MASCharter is another subsidiary of Malaysia Airlines, operating charter flights using Malaysia Airlines’ passenger jets.

After recovering from past losses, Malaysia Airlines is keen on merger and acquisition (M&A) activities, particularly airlines in the Asia Pacific region. Malaysia Airlines was ranked second with score 88 in Aviation Week’s Top Performing Companies which accurately measures financial viability of an airline. Since its inception in 1963, after Malayan Airways was separated into two parts, Malaysia Airlines has built up a strong brand name in the aviation industry for service and safety, coupled with numerous awards from international bodies such as Skytrax.

Malaysia Airlines is accredited by International Air Transport Association with IOSA (IATA Operational Safety Audit) for its operational safety practices. It is one of only six airlines to be given a 5-star status airline by Skytrax (the other 5 are Asiana Airlines from South Korea, Cathay Pacific from Hong Kong, Qatar Airways from Qatar, Singapore Airlines from Singapore and Kingfisher Airlines from India). Malaysia Airlines is also listed among Skytrax’s Quality Approved Airlines, alongside fellow 5-star carriers Asiana Airlines, Kingfisher Airlines and Qatar Airways.