MAS reorients business strategy

By K. Ramachandran

KUALA LAMPUR, OCT. 7. Even as the aviation sector is undergoing a worldwide recession after the terror attacks on the U.S., Malaysian Airlines is reorienting its business strategy by re- deploying its aircraft capacity to markets like India and China, that offer the best opportunities for growth.

Malaysian Airlines System (MAS) is enthused by the IATA (International Air Transport Association) ratings that pointed to continuing growth prospects for the airline industry with regard to Asia. This is underlined by the fact that travel between India and Malaysia has grown ``significantly'' in the past one year or so. The MAS has started twice a week connectivity between Hyderabad and Bangalore with Kuala Lampur recently. ``We have a desire to increase the frequency to this and new destinations in India,'' said the airline Managing Director, Dato Md Nor Yusof.

``We are looking at the leisure travellers, whose growth has been tremendous between the two countries. From India, the last year saw three lakh travellers to Malaysian destinations. This is growing because of the greater awareness among people about Malaysia,'' Dato Md Nor Yusof said while interacting recently with a group of visiting presspersons from India.

For the Indian sector, MAS has a current tie-up with Air India - a blocked space-cum-code share agreement by which Air India is allocated a certain number of seats on MAS services which AI could hold on to its inventory and sell through its system. Air India benefits by retention of revenue from sales achieved. The MAS was able to benefit as it now could access the Indian market from major cities like Mumbai, New Delhi, Bangalore, Hyderabad and Chennai.

To build and improve traffic from the Indian market, MAS has introduced promotional fares from new points like Mumbai, Bangalore and Hyderabad; its prices from Chennai and New Delhi to Malaysia and beyond are competitive.

On the latest developments in the industry, Dato Md Nor Yusof said the World Trade Center and related incidents in the U.S. had been ``traumatic for all of us here.'' One MAS aircraft was stranded at New York for five days. As for the impact on MAS business, he said the U.S. made up for seven per cent of total MAS operations. ``In the worst case scenario, it would be seven per cent reduction in business... but of course, our Los Angeles sector has resumed.'' We were less dramatically affected than some others, he added. The response would be more psychological.

But of course, with stricter FAA directives on security arrangements, there could be a drop in passenger traffic.

Operationally, the new regulations would mean investments to set in place `cockpit access control measures inside the aircraft''. And this is not done in a day or two. Other security measures being implemented were reinforcements of existing requirements that could affect the ``comfort aspects for passengers''. Utensils would be converted to plastic. Baggage check would be continuous by X-Ray machines and handsets wherever possible, which had already started. The measures would hold good for cargo holds also.

The Managing Director noted that MAS was continuing with its fleet modernisation programme involving the delivery of 25 new aircraft in Boeing 747 and 777 class for the long-haul sector.

On the financial performance of Malaysian Airlines, Md Nor Yusof said although in 2000-01 ``we had a bad financial reporting,'' there had been growth in passenger traffic, which means ``our basic strategies are still sound''. The 80 per cent government held airline, has been able to convince its government to revise domestic fares. Employee restructuring and productivity increase are other areas it is looking at for overall financial improvement.

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Section  : Business
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