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Malaysia Airlines Chairman meets government backbenchers

Malaysia Airlines (MAS) Chairman Dato’ Dr Munir Majid and…

Malaysia Airlines (MAS) Chairman Dato’ Dr Munir Majid and Executive Director Tengku Azmil Zahruddin hosted a group of 11 legislators from the Government Backbenchers Club (BBC), led by its Chairman YB Dato` Shahrir Samad at the MAS Headquarters in Kuala Lumpur.

The session commenced with Dato’ Dr Munir and Tengku Azmil (representing Managing Director En Idris Jala who had to attend to an urgent operational issue) addressing the BBC entourage on Business Turnaround roadmap. He explained that MAS’ focus is to develop on the existing work, through extensive engagement with the airline’s staff, including the unions and employees over the next few months. In addition there will also be stepped-up engagements with the Government, Khazanah, the airline’s Board and key business partners and suppliers.

Dato’ Dr Munir explained that this extensive outreach is necessary to secure constructive inputs towards the finalization of this Business Turnaround Plan. He said MAS will reveal the comprehensive Business Turnaround Plan when MAS announces its 2005 Annual results, scheduled in late February 2006.

Further elaborating on the Business Turnaround roadmap, Tengku Azmil said that this comprised the following elements:

Cash-Flow Survival Actions

A rigorous and disciplined cash management programme to stop and reduce the cash-burn rate of the company, both in terms of operating cost and also capital expenditure. It also seeks avenues to secure immediate short-term cash injection and financing, including sale of assets. MAS is currently in discussion with the Government on the modality of such financial support.

Profit Turnaround Actions

These comprise revenue management and cost reduction initiatives. All routes will be analysed on individual route P&L basis. Improved sales channels will be introduced to increase yield and revenue, commensurate with its 5 star service quality and taking account of competition for each route.

Already underway is an across-the-board price and yield review, supplemented by a dedicated Route Profitability laboratory, which has just started to review this in detail for MAS routes in Europe. This is used as the pathfinder for other routes elsewhere.

Various cost reduction programmes are being pursued in other areas such as fuel efficiency and procurement savings.

The HR/People Actions

This is a set of initiatives aimed at unleashing the talents of everyone in MAS to achieve the Business Turnaround Plan though leadership, accountability, teamwork and transparency.

Clear targets and key performance indicators will be established and performance of teams and individuals will be assessed against these.

Employees who perform will be rewarded for performance. Where there is an urgent capability gap, MAS will employ some expatriates and consultants to bring in ‘best practices’ from outside.

According to Tengku Azmil, one such recruit is Mr. Peter Read of British Airways, who assumes the post of Director of Operations effective 9 January 2006. He brings along a wealth of commercial airline operations experience, acquired during his 32-year tenure in the British carrier. In addition, three consultant companies, with experience in the airline industry, are currently being engaged to provide specific consultancy services. Their selection and appointment was done after careful review of existing talents and only for specific jobs and tasks which management considers can bring business value to the company.

Dato’ Dr Munir then spoke to the BBC entourage on the other recent concerns by the company’s various stakeholders.

He clarified that MAS indeed purchased two paintings by Fernando Botero and one by Sophia Vari. One of these is at the airline’s flagship Golden lounge in Kuala Lumpur International Airport whilst the remaining two are at the 34th floor of the airline’s headquarters building.

As regards the renovations done at head office, Dato’ Dr Munir clarified that decisions on these expenses were approved before his tenure considering the fact that the premise is over 19 years old. These covered not only the entire corporate premises at the 34th floor (including the reception area, boardroom, corporate dining room and kitchen) but also other office premises of the airline located within the headquarters.

Summing up the briefing for the BBC members, Dato’ Dr Munir said that the challenges facing MAS are extremely deep and managing its financial position is MAS’ first priority. He assured the BBC members and all other stakeholders that with their support, the management will try their best to restore MAS back as a profitable airline.

Vicky Karantzavelou
Co-Founder & Chief Editor - TravelDailyNews Media Network

Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales. She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.