Positive growth for Malaysia Airlines continues, passengers benefit

Malaysia Airlines continues it’s positive growth path with improved loads over the year end holidays. Although there are concerns with currency volatility which can affect fuel and ticket prices, the airline has still managed to offer lower fares. This has resulted in growth in both in the premium business traveller and all-inclusive economy sectors.

Malaysia Aviation Group Berhad CEO Peter Bellew paid tribute to staff who have worked hard to improve customer service which is reflected in increased bookings.

….. The last quarter saw a good performance in a challenging environment. Our staff have worked hard to improve customer service which is reflected in increased bookings. Our focus is to be a five star premium Asian airline, offering the best of “Malaysian Hospitality” to 15 million customers a year, travelling to 54 destinations in 21 countries. At the core of our brand is the “Golden Rule – treat customers as you would wish to be treated yourself. Peter Bellew

Positive growth for Malaysian Airlines, what’s in it for passengers?

Malaysia Airlines will continue to offer great value on all-inclusive business and economy fares despite a move away from this by other carriers. They also see enormous growth potential from inbound tourism from China to Malaysia.

The focus is therefore on improving customer experience through various initiatives:

Investing in the Customer

• Customer satisfaction is already showing improvement, with a gain of seven percentage points compared to the corresponding quarter a year ago,reaching an all-time high in October 2016. In line with the aim to regain their Skytrax five-star airline rating in 2017, a number of strategies have been put in place.
• Continued investment in aircraft, product, service and technology.
• On-going improvement in food and beverage offerings. One example is the well-received ‘Dine Anytime’ service, offered on all Australia, New Zealand and North Asia destinations.
• Completion of the Business Class lie-flat seats rollout on all 15 A330s in December 2016, ahead of schedule and on budget.
• The introduction of Self Print Baggage Tag for all economy class passengers out of KLIA. All kiosks at Level 5 KLIA have been equipped with the function to print the baggage tags. It is hoped this will improve further with the commissioning of self bag drop facilities in Rows B and C.

China expansion

Malaysia Airlines is also seeing positive growth in traffic to and from China, with a successful start to expansion plans with the launch of flights to Haikou.

• Ticket sales have begun for flights to Nanjing, Wuhan and Fuzhou with the first flight expected to take off in June 2017.
• Passengers to Hong Kong have also enjoyed a service upgrade, with the Airbus 330 replacing the Boeing 737 since 1st January.

Operational improvements

Four main areas are covered here:

• Mishandled baggage has been reduced by 15% based on incidents per thousand compared to 2015. On-time performance has been affected by on-going congestion at the KLIA main terminal. Restructuring of immigration service has also had an impact and passengers should ensure they allow enough time to move through border controls.
• The Boeing 737 fleet are now operating with a 35 minutes turnaround time (TAT) effective 27th October 2016 which will reduce the Group’s aircraft requirement by up to four 737s in 2017.
• A total of seventeen fuel initiatives were monitored and tracked for 2016, resulting in overall savings of 22.15 mil kg from a target of 13.3 mil kg per annum.
• Work will commence soon on the upgrading of Malaysia Airlines’ lounges in KLIA and London Heathrow airport.

Technology driven company

Passengers can look forward to a new and easier booking process targeted to begin in June 2017.

• Testing has commenced on the new Amadeus passenger sales system with a successful migration to the new system in the US region, in February 2017. When completely rolled out, the system will offer a superior customer experience with enhanced speeds and convenience across all touch points. UPDATE: Due to kick in the weekend of 10th – 11th June 2017.
• The Malaysia Airlines Travel Hackathon held in February 2017 – a first in Malaysia. The event harnessed creativity within the digital community to generate innovative solutions to improve customer experience and the airline’s operational efficiency.

A380s for the Haj and Umrah

Plans are well underway to set up a new airline to service Haj and Umrah routes. The service will utilise the six Malaysia Airlines A380 aircraft which will see the seating capacity increased to 720 seats on each aircraft.

Enhancing corporate governance

Behind the scenes, the airline has moved to strengthen corporate governance through the Group’s Business Integrity unit. Several targets have been met towards building a more transparent and accountable Group, including

• The introduction of a Knowledge Management Unit. This ensures staff understand all policies including fraud and wildlife trafficking.
• A new automated online system has been introduced for the declaration of gifts and conflicts of interest

Investment in the talent pipeline and local succession planning

• Talent development continue to generate a future generation of leaders for the airline who will be recruited from within the Group.
• Succession planning has identified personnel for the Group’s key senior managers, with programmes in place to ensure a smooth transition.

Already completed are programmes for

• Leadership talent profiling and training intervention for Assistant Managers and above
• Leadership skills training for Supervisors, Executives and Senior Executives

Positive growth continues with the strengthening the Senior Management team. Recent appointment include new Heads of Marketing and Sales.

Monthly meetings have enabled swift identification and resolutions to many employee issues through the internal Works Council.

Subsidiary companies:

FireFly

FireFly is a wholly owned subsidiary of the Malaysia Aviation Group which flies out of Subang Skypark. The airport is an ideal commuter airport, conveniently located close to the city centre. Price competition for flights out of Subang is particularly intense for domestic flights, with FireFly no longer monopolising the market. The airline currently flies twelve of their eighteen aircraft and is working to improve its average yield in 2017.

MASwings

Malaysia Aviation Group also holds a 100% stake in MASwings. MASWings operates a fleet of sixteen turbo prop aircraft domestically in the states of Sabah and Sarawak. This airline operates services to remote parts of East Malaysia and is a key lifeline to many of its customers.

The operations break through financial support from the Federal Government under a Rural Air Services (RAS) agreement renewed approximately every 5 years. The current agreement ends in September 2017.

Discussion for renewal from October 2017 are currently underway between MASwings, the Ministry of Transport and the Malaysian Aviation Commission (MAVCOM). Renewal of the agreement is expected, with a reduction in the level of services to cover fourteen aircraft.

Challenges and opportunities

The Challenges:

• a weak Malaysian Ringgit
• overcapacity in the Malaysian market
• any potential price war
• possible delay in delivery of the first Airbus A350 to December 2017

Opportunities

• possible sourcing of additional wide-body aircraft from Airbus or Boeing in early 2018. This will increase seats and improve product quality available on existing routes.
• passenger growth through customer engagement and satisfaction

For more information or to make a flight booking, visit the Malaysia Airlines website.