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New MAS revamp plan

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New MAS revamp plan Empty New MAS revamp plan

Post by hlk Wed 07 Dec 2011, 11:32

Focus likely to be on growing Asia routes, cutting unprofitable routes and more alliances

PETALING JAYA: Malaysia Airlines (MAS) has put together yet another business plan to turn itself around. It is learnt that the new management of the national carrier, which had undergone several revamps, has been working on the plan for the past two months.

“This time the focus is on growing the routes in Asia, improving on products, cutting unprofitable routes and forming alliances with more airlines,” said a source.

While cost-cutting measures are a given, another source said the question was, would the airline focus on the areas that should be trimmed and plug leakages? Or would it conduct only surface-level clean-up?

Earlier this month StarBiz reported that MAS might cut its routes to Dubai, Johannesburg, Buenos Aires and Cape Town in a bid to reduce costs.
More cost cutting: The new management of the national carrier has been working on the plan for the past two months. – AFP

However, that would require the Government's approval and whether MAS has managed to secure the nod is not known.

MAS might also do away with its hub in Kota Kinabalu and cut flights out of the city to destinations such as Haneda, Seoul and Osaka (in Japan). It might also drop the Langkawi-Singapore route.

Sources said the airline might spin off some of its subsidiaries like the ground handling and cargo operations into separate units for better accountability.

MAS CEO Ahmad Jauhari Yahya and his deputy Mohd Rashdan Mohd Yusof met senior executives of the airline yesterday to brief them on the new plan.

They will invite MAS employees to a townhall meeting today after which they will meet the media to disclose the plan and how they intend to turn around the airline, which reported RM1.2bil in net losses for the first nine months of the year.

This plan has come about after MAS entered into a share swap with AirAsia Bhd's founding members in August. It had also led to a board revamp and a change at top MAS management. The share swap has also ended the rivalry between MAS and AirAsia, and along with it Firefly's operations which had been a threat to AirAsia.

Ahmad was appointed in September and was tasked to come up with a plan to save the national carrier.

Whether he would share how AirAsia and its sister airline, AirAsia X, would fit into MAS' business plan is unclear but sources are speculating MAS might axe some of the routes that overlap with those of AirAsia and AirAsia X.

AirAsia X has been hoping to secure the KL-Sydney route and it remains to be seen if that issue would be addressed today since MAS has blocked AirAsia X request to obtain the route for nearly two years.

Ahmad has re-organised the airline to have the narrow body and wide-body operations separated so that each can tap into its respective market.

He has also come up with a new organisational chart which maintained most of the existing senior management team. However, some of them have resigned and others are contemplating quitting.

To save costs, Ahmad has also suggested that the MAS administrative offices be moved to the KL International Airport from Subang,

While MAS would continue to ensure that it benefited from its entry into the Oneworld alliance, it is unclear if he would comment on the airline's relationship with Qantas. The Australian carrier has yet to decide between Kuala Lumpur and Singapore for its Asian hub.

“The talks with Qantas are still very preliminary and if anything, we may have to wait until January or February to know if Qantas would ride on MAS' short-haul operations to offer linkages within Asia,” said a source.
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