Current Situation of Malaysian Airlines

Malaysian Airlines is a government owned flag carrier of Malaysia. It operates from its home base, Kuala Lumpur International Airpor and with a secondary hub at Kuching. Other than the airline, the group also includes aircraft maintenance, repair and overhaul and aircraft handling( Wikipedia)

The vision of the company is to become a preferred premium carrier, well positioned in the Asian aviation marketplace. Even though Malaysia is relatively smaller in Asian arena, the airline will try to harness the country’s geo economic centricity in ASEAN, and emphasise on their own natural way of cost competitiveness as a hub and try to enter into alliance and partnership to ‘punch above the weight’(Malaysia airlines).

Current situation of Malaysian Airlines

Malaysian Airlines are in a position of crisis. The company has incurred a net loss of RM 1.2 billion in the first three quarters of 2011 alone. Almost 40% of the total routes in which the airline operates is incurring losses. The position of the company is even more tenuous as compared to the crisis which the company faced in 2006. The market of aviation is becoming competitive with the entrance of the low cost carrier (LCC) in the market and the growth of the Middle Eastern full service carriers and even the revival in the fortunes of Asian full services such as Garuda, Japan Airlines and Thai Airways.

Malaysian Airlines had not focused on the premium segment of the market, even the quality of the product has fallen. The major marketing efforts of the company were focused on tactical sales promotion instead of brand building. Even with great efforts from the side of the sales team the profits generated is really low which is quite low to cover the increasing cost structure.

Demand in the Asian aviation industry is quite strong. Throughout Asia there is a huge growth in the disposable income of the people, access