• 1. INTEGRATED CASE STUDY (PAS 3183)MALAYSIA AIRLINES (MAS) PRESENTED BY Luluk Nor Khotima Bt Nursam Ashvenee Devi Selvaraju Noor Armi Addila Bt Noor Ariff Nur Azlinda Bt A.Azaman Norliza Bt P P Mohamed
• 2. AGENDA• INTRODUCTION• MANAGEMENT CONSTRAINT• COMPETITION• UNPROFITABLE ROUTES• INCREASED IN FUEL PRICE• MAINTENANCE COST• RECOMMENDATION
• 3. INTRODUCTION• 1994- Privatized 32% controlling stake to Tajuddin Ramli through Naluri Berhad• 1998- Asian Financial Crisis MAS faced substantial losses• 2005- MAS reported loss RM1.3b• 1 Dec 2005- Idris Jala became CEO of MAS• 27 Feb 2006 - BTP 1 was announced
• Action taken by management(Government intervention (Constrained ...view middle of the document...
W lower fare to customers.• Now bank increase the E • International airlines N possibilities through T somehow have access to many offering long term loans R routes that MAS do not have with low interest. Y • In term of safety POWER OF COMPETITIVE POWER OF SUPPLIER RIVALRY BUYERSUPPLIERS POWER :• Less opportunity for bargaining because not many suppliers. BARGAINING POWER OF CUSTOMER : • High bargaining power as customersTHREAT OF SUBSTITUTE : can easily shift to AirAsia which is• For international do not ha ve cheaper. problems because the only way to • However, if they prefer a high and travel fast is using airline. good quality services, only MAS can• For domestic have to compete provide it. with other cheaper substitute.
• 10. COMPETITIVE ADVANTAGE WHAT? Business should concentrate their efforts on things they do well WHY? To stay in business and become success HOW? From one or combination of these factors ; price, service, quality, location, or customer base. 1. Find out factors that important to the customers • Good quality of services – best Cabin Crew Award #1 • Low fare rate • Safety 2. MAS competencies and things that they do well ? 3. Identify whether MAS can develop what important to customers as their competitive advantages? • Low fare : reduce costs
• 11. FOLLOW COMPETITORS STEPS WHY ? “if you can’t beat them, join them” HOW ? 1. Alliance - ONEWORLD 2. E-ticketing 3. Promotion packages in off-season – MATTA FAIR BENEFITS? 1. More routes and benefits 2. Cut-costs 3. Increase sale in off-season
• 12. 3. 60% Unprofitable of MAS Routes• Pricing properly to maximize yield (profits)• Yield = Revenue per Revenue Passenger Kilometer (RRPK)• MAS made the past ‘strategic mistake’ of not joining a global airline alliance.• 66 of the airlines international routes are unprofitable while 48 are profitable.• Example – Kuala Lumpur-Manchester – routes to be dysfunctional – 140% capacity-full to break even.
• 13. The Main Causes of Unprofitable Routes 1. There has been a slowing of global Revenue Passenger Kilometer (RPK) growth • relatively large ratios between RPK growth and GDP growth. 2. Factor costs—particularly fuel—have increased • increase in fuel prices alone. 3. Low cost competition is on the rise • Competitors hoping to stimulate demand by dumping large numbers of very low price seats in core markets 4. The frequency and impact from global demand shocks is increasing • many of their customers do not need to travel. • with the current transparency and immediacy of global media - end up with increasingly volatile demand.
• rewarded our customers by selling 5 million seats at up to 70% discount( various surcharges and administrative fees in line with the rest of the market have been introduced to align revenue with costs3. Launched Travel...