Malaysian Airlines System Berhad Strategic Management

1.0 Introduction

Businesses are not just facing higher pressure from increasing number of competitors, but they also have to compete in more dynamic and complex environment. Airlines industry is not an exception. There are increasing number of new carriers with new business model which has changed the competition pattern in the airlines industry. This paper analyse Malaysian Airlines System Berhad's external environment, identify the core resources and competences, evaluate its strategic choices and recommend a best suit strategy to be pursed.

Malaysian Airlines System Berhad

Malaysian Airlines System Berhad (MAS), is a government owned flag carrier of Malaysia and is listed on the stock exchange of Bursa Malaysia. Malaysian Airlines provides business class and premium air flights. Their motto is "More than an airline code, MH is Malaysian Hospitality" and their vision is to become "the preferred premium carrier" It is to emphasize the hospitality of its cabin crew instead of the airline's extensive network and its premium cabin and economy class cabin products. Malaysian Airlines System Berhad (MAS) which had received more than 100 awards in 10 years, such as, World's Best Cabin Crew (2001–2004, 2007, 2009), 5-star Airline (2005–2007, 2009), Economy Class Award (2010), Staff Service Excellence for Asia Award (2010), still struggles to be one of the best performance company in air lines industry.

Malaysian Government investment arm and holding company, Khazanah Nasional's subsidiary, Penerbangan Malaysia Berhad is the majority shareholder with a 52.0% stake and the second-largest shareholder is Khazanah Nasional, which holds 17.33% of the shares. MAS stakeholders report (2010) (online).

Malaysian Airlines reported a net loss of RM479mil on the back of an 5percent rise in revenue to RM3.5bil for the three months ended September 30, 2011. Malaysian Airlines financial figure shows that the airline reported an operating loss of RM156mil, which means that it spends more than what it earns and currently is in crisis. More than 40% of their routes are loss-making and their unit cost position is 10-15% at above corresponding revenues. MAS reports (online).

Over the past decades MAS has undertaken most number of restructuring exercises to get back on its feet and had suffered high losses. MAS had introduced Widespread Asset Unbundling (WAU) in 2002, Business Turnaround Plan (BTP 1) on 2006, and Business Transformation Plan (BTP 2) on 2008. To survive in this oligopoly industry, Malaysian Airlines most recently had announced a new plan Business Plan, Our Way Forward on December 2011.

It has few subsidiaries, such as :-

1. Firefly, which focuses on tertiary cities, and MASwings. which focuses