Restructuring malaysia airline

In this point, if the management finally trade off the balance between these forces for and forces against and find out that the positive forces are stronger than the negative forces, the downsizing decision would be determined. According to Pideritresponses to change could be characterized by three distinct yet related dimensions: And resistance to change hence could be represented by the bundle of responses to change that are negative along all the three dimensions.

Restructuring malaysia airline

The new plan calls for MAS to focus primarily on its regional operation within Asia-Pacific, where there are better prospects for growth and sustainability but also extremely fierce competition. Raising yields in a competitive marketplace dominated by price sensitive short-haul passengers will not be easy.

Costs should be reduced to more competitive levels as MAS cuts 6, jobs - but that only solves one of the multiple challenges facing the Restructuring malaysia airline flag carrier. Malaysia Airlines 2Q loss widens. Restructuring is imminent but outlook remains bleak MAS to focus on regional network MAS would face huge challenges whichever direction it turns, but its best chance at recovery Restructuring malaysia airline to rely on the strength of its regional network.

As a result the new recovery plan prepared by Khazanah envisions focusing on Asia-Pacific, or flights of under roughly eight hours from Kuala Lumpur.

As CAPA suggested in the previous part of this series of reports, capacity to Europe is expected to be cut through a combination of frequency reductions and in some cases route terminations.

Restructuring malaysia airline

MAS will rely more on fellow oneworld members and other partners to serve long-haul markets. But MAS is presently also ill equipped to compete in the regional market. Its cost structure, yields and labour productivity rates remain way too high - compared to both LCC and full-service competitors.

Khazanah plans to tackle the cost issue through several cost reduction initiatives. First and foremost are job cuts. MAS has attempted several restructurings in recent years but for political reasons jobs were always spared, making it impossible for executives to tackle the longstanding issue of a bloated workforce with employee productivity rates well below industry standards.

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The alternative, of increasing flying to seek to improve productivity in that way, has merely led to excess capacity and yield dilution. Annual ASKs millions per employee: Khazanah These indicators can always be misleading, for example where one airline has a significantly shorter average stage length.

But MAS does not fare well in any of the comparatives. In terms of revenues per employee the gap is, not surprisingly, even larger given the higher yields and larger volumes of premium traffic that Cathay and SIA command. Annual revenue MYR thousands per employee: Among the several airlines Khazanah compared only Thai Airwayswhich has its own considerable issues and also recently unveiled plans to cut jobs as part of a restructuring, is less efficient in this ranking.

Malaysia Airlines vs select carriers Source: This would assume no changes in the size of the fleet. But it has not indicated if the fleet will also be cut. MAS has large maintenance and ground handling units that also pursue some third-party business.

Many airlines outsource these functions or have separate companies. But even when accounting for these differences MAS is still relatively bloated. The airline should be able to cut a significant number of employees without adjusting capacity.

Capacity is also expected to be reduced, driven by cuts in long-haul ASKs. MAS job cuts will likely include maintenance and ground handling units Khazanah has not yet provided any breakdowns on the proposed job cuts.

Until a breakdown is provided it is hard to determine with any accuracy what the productivity gains will be for the airline operation.

The maintenance and ground handling units could potentially be exposed to a larger portion of cuts than the airline itself. These would still help MAS in its overall cost cutting initiative as the airline would no longer have to pay as much for these - expensive - services.

MAS in particular has been paying higher than market rates for maintenance services as its maintenance unit is overstaffed. MAS Engineering has been able to win business from other airlines but the rates it has had offer to secure third party customers in the highly competitive MRO industry are generally well below cost, resulting in essentially a cross subsidy, with MAS indirectly underwriting the maintenance costs of other airlines.

MAS will need to get its maintenance costs in line as it restructures. Khazanah is no longer looking at this option, which is not realistic until the maintenance unit itself is restructured.

Bankruptcy was previously ruled out as an option for MAS, partly because bankruptcy laws in Malaysia do not provide the kind of protection received in the US and some other countries. Consequently the grounds for such adjustments may have their roots in another, specifically Malaysian, provision.

MAS has been known to pay higher than industry norms for equipment and services. Its biggest competitor, AirAsia, has been highly successful at negotiating some of the most competitive rates for products and services, including aircraft. MAS must close the gap with AirAsia across all cost lines in order for the flag carrier to be sustainable.May 25,  · The airline was pulled from the stock market and taken private by Khazanah Nasional, Malaysia's sovereign wealth fund, which eventually revealed a $ billion restructuring plan..

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Restructuring malaysia airline

Malaysia Airlines (MAS) has begun a new phase of its long restructuring process, as it starts to reject aircraft leases. MAS transitioned to a new company on 1-Sep, but the restructuring in many respects is far from complete, and will take another year to implement.

Khazanah-led restructuring at Malaysia Airlines failed, says union. It warned that the airline “will fail again” if it was run by those with “self-interests”, adding that there was an. Malaysia Airlines Berhad (MAB) (Malay: Penerbangan Malaysia Berhad), formerly known as Malaysian Airline System Berhad (MAS) (Malay: Sistem Penerbangan Malaysia), branded as Malaysia Airlines, is an airline operating flights from Kuala Lumpur International Airport and from secondary hubs in Kota Kinabalu and Kuching to .

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Khazanah had in privatised Malaysia Airlines to facilitate the airline's restructuring. Malaysia Airlines was known as Malaysian Airline System Bhd then. Malaysian Airline System was delisted from Bursa Malaysia on Dec 31, 4 days ago · KUALA LUMPUR (Sept 24): The government needs to set up a group of experts to review Malaysia Airlines Bhd’s (MAB) current operations as the RM6 billion restructuring plan is deemed a failure, ex-Chief Executive Officer/Managing Director of Malaysian Airline Systems Bhd (MAS) Tan Sri Dr Abdul Aziz Abdul Rahman said.

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