Newstrack

Malaysia Airlines intensifies BTP initiatives

EAW Staff - Mumbai

Malaysia Airlines intends to undertake various initiatives in order to further intensify its Business Turnaround Plan (BTP) in the year 2007. It announced a net profit of RM121 million for the quarter ending December 2006, its second consecutive profitable quarter since the unveiling of its BTP in February 2006.

Its performance was mainly driven by two key factors: an increase in passenger revenue and cost reductions. For its 2006 full year results, Malaysia Airlines exceeded its RM1.1 billion BTP improvement target. The national carrier made a loss after tax of RM136 million, which is a RM1.6 billion improvement over the RM1.7 billion base case loss for 2006 as announced in the BTP.

Malaysia Airlines will focus on the following key business areas this year. Among the many areas of development, the carrier will progressively roll out more than 125 initiatives in 2007 to continuously improve the customer experience at every touch point from purchase, pre-embarkation, embarkation, in-flight to disembarkation.

It aims to further increase its yield to close the gap with the best in class. Major initiatives taken include the introduction of competitive fares, the opening of 'store fronts' by publishing net market fares and the implementation of tighter inventory controls. This makes it easier for customers to obtain competitive fares from the airline.

MAS will invest some RM200 million from 2007 to 2009 to revamp its Passenger Services System (PSS) to equip the airline with IT systems. The key benefits of PSS include cost savings through e-ticketing and ticketless transactions, as well as the ability to change fares dynamically in response to competition. Malaysia Airlines is also currently pursuing the Engineering Breakthrough Project which aims to enhance productivity. This in turn will reduce cost and ensure more revenue contributions from third party work.

Malaysia Airlines is also finalising its five-year network plan. From 2008 onwards, it will develop new routes and increase frequency for existing routes with growth potential. At the same time, the carrier will continue to pursue its 'hub-and-spoke' strategy to improve traffic flow and strengthen passenger connectivity. In line with this, MAS is considering increasing its capacity by purchasing and leasing new aircrafts.