Determinants of Malaysian Airlines Recovery

Sys Rev Pharm 2020; 11(1):852-859

A multifaceted review journal in the field of pharmacy

852 Systematic Reviews in Pharmacy Vol 11, Issue 1, Jan 2020

Sakinah mohd shukri*,

Mohd Shukri Ab Yajid,

Ali Khatibi

Management and Science University

*Corresponding author: [email protected]

ABSTRACT

This study explore the factors effecting the recovery of airlines in Malaysia.

Previously a government agency, later known as Malaysian Airline System (MAS)

embarked on a system of corporate governance that would ensure the fulfillment

of its role not only as a national carrier but also as a corporate citizen centered on

being responsible to its shareholders. In this new age of technology after the

economic downturn and the 9/11 incident, Malaysia Airlines and all other airline

companies throughout the world had suffered a long term running at loss due to

drastic changes of market pattern. Malaysia Airlines had taken various strategies in

diversifying its operations into human resource development, training, catering,

property consultancy and technical ground support for aircrafts to cater the

decreasing demand of services. Sharing its limelight with the ultra-modern Kuala

Lumpur International Airport (KLIA), Malaysia Airlines also provides world-class

cargo management facilities to meet the needs of all potentials. With more than 50

years of experience, Malaysia Airlines is now still seeking the ways to cater to the

ever growing needs of fast moving travelers and bringing them the best service that

air travel has to offer such as sophisticated in-flight entertainment to the simple

things in life. Malaysia Airlines tries to offer the world-class services that somehow

redefines the standards in passengers’ comfort that fulfill their needs and wants

against each and every rival internationally as well as domestically. Now, Malaysia

Airlines is Malaysia’s biggest carrier with a fleet of about 110 aircrafts that fly

passengers and cargo to more than 100 cities across six continents. Despite the

worldwide issues, Malaysia Airlines continues to firmly establish the brand name as

Asia’s leading carrier and the company is now spreading its wings to more than 200

destinations across the globe.

Keywords: airline, recovery factors, Malaysia.

Correspondence:

Sakinah mohd shukri

Management and Science University

Corresponding author: sakinahshukr[email protected].my

INTRODUCTION

The national carrier has been praised and criticized from

all quarters, right from the business community to the

public at large. Naturally resilient, the natural carrier did

not buckle under pressure. In fact, through these obstacles

they saw a window of opportunities for them to improve

on paper and on the ground. The successful restructuring

programmed in 2002 has helped them to fast-track the

national carrier’s return to profitability. Malaysia Airlines

has been seen making three straight quarterly-financial

results of profit, with the highest recorded of three-fold

profits – an impressive financial gain compared to the six

consecutive years of losses. This has taken up almost

everyone including the critics who are always skeptic with

Malaysia Airlines’ performance and indirectly, the success

has vanquished all the controversial and the negative

comments about the restructuring programmed.

With more than 50 years of experience, MAS is

continuously seeking for ways to cater to the ever growing

needs of fast moving travelers. Malaysia Airlines strives to

offer the world-class service that somehow redefines the

standards in passenger’s comfort that fulfill their needs

and wants and benchmarking this against each and other

rivals, internationally as well as domestically. It has

announced to increase the total number of destinations to

over 100 of international stops. Recently, the company has

increased the number of routes to China, India, Japan and

the Middle East. The airline’s network will grow

extensively to more international destinations in response

to growing demand for worldwide coverage. Emphasizing

on quality services, Malaysia Airlines has always hired the

best professionals who are highly disciplined and

dedicated towards their jobs. As a result, many travelers

worldwide have made Malaysia Airlines as their preferred

choice of air travel. With “Going beyond Expectation” as

their tagline, Malaysia Airlines has excelled in its mission

to provide a safe, comfortable, and punctual air travel with

personal touch of the crews involved in each flight (Azmi,

Rahman, Halim, & Hamid, 2016; Dewi et al., 2019;

Pambreni et al., 2019; Tarofder et al., 2017).

MSA ceased their operation in 1971 and were separated

into two airlines. The separation happened because of the

different needs of the two airlines. However, these two

airlines have become the leading Asian carriers. The final

revision of the airline names was completed, and MSA

became Malaysian Airlines System Berhad (MAS) and

Singapore Airlines (SIA). In 1987 the Malaysian

Government sold its shares in MAS and a new corporate

identity came along. In the late 1987, as part of the new

corporate identity align with their current mission and

objective, Malaysian Airlines System (MAS) had changed

their identity to Malaysia Airlines. To date, the name is still

being used. Started by offering flight services from Penang

to Singapore, the national carrier has then flown further

throughout the country in response to the increasing

demand of the nation. In a more to expand their market,

the airline offered flights to Jakarta, Medan, Palembang

and Saigon. At that point in time, they were the pathfinder

of the regional flight services and MAL first flight to Hong

Kong was in 1958 right after the acquisition of another six

aircrafts.

Following the separation between Malaysia and Singapore

which led them to change their name to MSA, they have

vastly expanded their international destinations. The

destinations were Manila, Perth, Sydney and Taipei. In

1968, MSA made its first flight to Tokyo and a year later

they started service to Bali. Madras and Colombo were also

added to MSA growing international destinations list. By

1972, the total destinations that MAS services was up to 34

domestic routes and 6 international destinations. In 1973,

Sakinah SM et al. The Factor Associated with Recovery of Malaysia Airlines

853 Systematic Reviews in Pharmacy Vol 11, Issue 1, Jan 2020

due to the rapid globalization around the world, MAS was

pressured to add up more international routes. Not

wanting to be left behind, popular destinations for

business such as Tokyo, London, Madras, Amman, Hat Yai,

Jeddah, and Taipei were included. In 1976, after the

acquisition of wide-bodied DC 10 aircraft, MAS added

more destinations, this time to European countries. New

services to Zurich, Amsterdam, and Paris had opened up a

new dimension in travel offerings to all travelers and

tourists. MAS made own history when they offered their

first service to the United States in 1986. They ran the

service twice weekly, from Los Angeles via Tokyo. They

were then continued to add more destinations in 1990,

where Ho Chi Min City, Guangzhou, Fukuoka, and

Pontianak became MAS choices (Carlsen & Hughes, 2008;

Doa et al., 2019; Maghfuriyah et al., 2019; Nguyen et al.,

2019).

Up to now, Malaysia Airlines is still the proud owner of

“world’s class cabin staff” for four-consecutive years. The

Survey is done by Skytrax Research of London, United

Kingdom2. The research regards Malaysia Airlines as

providing the most comprehensive range of customer

survey programmers for airlines across the globe. As the

first airline scoops the title as the “World’s Best Cabin

Staff” awards for four consecutive years, the qualities that

passengers’ have described and nominated the flight

attendants include Consistency among Staff, Cabin Staff

Grooming and Presentation, and the Sincerity, Enthusiasm

and Attitude of Cabin Staff. Malaysian Airlines has drawn

admiration from international passengers, as shown by

the awards. Please refer to the (Exhibit 1) on the awards

that Malaysia Airlines has received for the past seven

years. As for providing the best service in the sky, Malaysia

Airlines also provides delicious Malaysian culinary cuisine

as well as international favorites. Skytrax awarded

Malaysian Airlines cuisine as the “Best Signature Dish

2003”, where the airline served the first class and business

class passengers’ through their tasty and mouthwatering

Satay served specially for them. Economy class passengers

were also served with a top of the notch signature dish.

Apart from the delicious cuisine.

Malaysia Airlines from the beginning has proven that its

existence is not just a mere presence in the airline industry

but also is a genuine performer; its dedication has placed

Malaysia Airlines as one of the best 5 airline companies in

the world. Starting from Kuala Lumpur to Singapore, this

airline has expanded their network by flying to numerous

destinations in Asia, Australasia, the Middle East, Europe,

North America, South America, and Africa. When the

apartheid system came to an end in South Africa, Malaysia

Airlines was the first airline in Southeast Asia to fly to

Johannesburg 4. (Please refer to Appendix 5, to see the

domestic and global destinations that are included in

Malaysian Airlines routing service). With a hope to expand

more of its routes and capacity, Malaysia Airlines is

planning to purchase 39 new jetliners to replace half of its

existing fleets, this despite the increase in oil prices and

the emerging of close competitions from the low-cost

carriers in Southeast Asia. The exhibit below indicates the

aircraft type and the total number of fleets that Malaysia

Airlines currently own. This sum has proven that Malaysia

Airlines has achieved the target of aircraft that they want

to own with regards to the passenger’s comfort and the

volume of passengers that they would bring in one flight

(Case, 2005).

Table 1: Malaysia Airlines’ Aircraft Fleet (as at June 15,

2005).

By using MES, Malaysia Airlines able to reduce the aircraft

maintenance downtime days, effective hanger slot

management as well as making it more effective in

tracking engines and other next higher assemblies. They

also provide modification services of ageing aircraft,

corrosion prevention programmers and cabin upgrading.

Malaysia Airlines is responsible has the experience in

maintaining the biggest B737 fleet operator. Their

expertise in handling such of this aircraft type is highly

admirable and a source of envy among the players.

LITERATURE REVIEW

Despite the common notion that the airlines industry is on

the verge of collapse, many major airlines, including

Malaysia Airlines has proved the idea was wrong.

Approximately, total profit from the combination of all the

major airlines is more than US$ 4 billion. Before the turn

of new millennium, many of Asia’s airlines are hitting up

and the market was intense due to the extreme

competition environment over the Asian skies. The

economy growth and the swelling middle class of the

Asians have helped civil aviation industry to grow further.

From the research done by the International Air Transport

Association (IATA), by 2010 Asians travelers. Multiple

forces drive the success of the airline industry. Policies and

regulations are two of the most critical factor in the

development of any country’s airline industry. The air

transport industry is highly regulated all over the world.

The geopolitical factor is one of the most critical and

contentious issue. Airline companies would only obtain

license for operating beyond their national frontiers by

means of reciprocal agreement. By this mutual agreement

between both countries, it means that one company from

the country may transport the passengers to another if,

and only if, the other country allows the signatory to

transport its own passenger to the first country

(Changsong, Yiming, & Ahmad, 2017; Pathiratne et al.,

2018; Rachmawati et al., 2019; Seneviratne et al., 2019;

Sudari et al., 2019; Tarofder et al., 2019).

AIRCRAFT

TYPE

NO. OF

AIRCRAFT

PASSENGER

SEATING

RANGE

(KM)

B747-400

(Passengers)

386

12,964

B747-200

(Freighter)

B777-200

248

12,779

A330-200

229

7,964

A330-300

294

12,224

B737-400

144

2,963

F50

2,778

DHC6 Twin

Otter

740

Total Number of Aircraft = 111

Sakinah SM et al. The Factor Associated with Recovery of Malaysia Airlines

854 Systematic Reviews in Pharmacy Vol 11, Issue 1, Jan 2020

Over the past 20 years, the shift from regulations to de-

regulations has emerged. Airline companies have

benefited most from the de-regulations policy. Dramatic

shifts occurred from regulated to deregulated markets

especially in the domestic and regional routes. Usually, for

the domestic markets, only domestic companies may

operate. However, some of the countries has deregulated

it totally allow the market force to come into play. Still,

there are a few countries that chose to remain closed and

as a result, new entrepreneurs are not so welcomed to

enter the market. Only a number of small players or

companies are capable to operate international routes. Not

only the capital requirement needed is high, but certain

restrictions from laws relating to this industry prohibit

any airline companies from merging. However, forming

strategic alliances are allowed though. Many advantages

can be obtained from the alliances as the alliances may

operate in closed market, achieving economies of scale,

sharing research and development, marketing and

distributions costs, acquiring each other technology, and

reducing financial risk. However, not all alliances have

achieved this aim. Alliances are hard to manage and there

is no surprise that two thirds of the alliances worldwide

failed within a few years after it was formed.

The industry is constantly under threat due to the rise of

fuel prices, economy downturn and increasingly

demanding labor force. However, this situation quickly

turns into a golden opportunity if the economy is growing

and the fuel prices are stabilizing. The combination of

these factors and the changing paths, regulations and

deregulations has shaped the airlines into what they are

today. Not surprisingly, corresponding strategies of the

airlines were shaped from the combination of the factors

above. The Asian economy crisis began when Thai Bhat

was depreciating down swiftly. The neighboring countries,

such as Malaysia, Indonesia, Philippines and South Korea

were also affected. This happened due to investors had lost

confidence in Thailand’s currency and the ‘infection’

spread throughout the Asian region. Market has been

depreciated very badly even in strong free-trade-oriented

countries like Singapore and Hong Kong. Businesses in

Asian countries had difficulty to survive due to the little

inflow of the foreign capital. Asian airlines were not spared

from this crisis. Cathay Pacific Airways had announced

that it had been thrown into the red for the first time ever.

Thai Airways saw a 40% drop in passengers. Indonesia,

struggled to stabilize its own country both – politically and

economically. Indonesian’s Garuda reported a drop of

around 80% and four out of six Indonesian airplanes were

planning to return all the fleets that they had leased.

Airlines like Korean Air, Philippines Airlines, and Garuda

also had to sell off their own fleets and returned the ones

that they leased. In the event of this crisis, Cathay Pacific,

ASIAN, Korean Air was forced to give their passengers

steep discounts and special packages, just to increase the

sales (de Sausmarez, 2007).

“The repercussions trickle down through every layer of

the global economy. In the era of globalization, the

September 11 terrorist attacks on New York and

Washington have had worldwide economic consequences,

felt even in those countries that are not likely to become

terrorist targets themselves. Ultimately, some of the

weakest Third World economies could suffer the worst

fallout from the September attacks. The necessary

preoccupation with counter-terrorism measures is also

diverting attention and resources away from economic

development throughout the world” 7

When Swissair grounded its plane due to the lack of cash,

the Swiss government bailed them out. Not long after the

terrorist attacks in United States on September 11 2001, in

the year 2002, the world was again shocked by what had

happened in Bali, a province of Indonesia. Bali, known to

most travelers around the world as a vacation destination

is heavily dependent on tourism industry. The tragedy

happened outside the “Paddy’s Bar” and “Sari Club” where

individuals blew bombs outside the two clubs. The

bombing killed around 202 people; most of them are

tourists mostly from Australia. Another crisis, the Severe

Acute Respiratory Syndrome (SARS) has of course,

affected highly on the tourism, and airline industry.

Regional and international conferences throughout Asia

where all the delegates from the affected countries were

expected to arrive were canceled. Airlines from Cathay

Pacific to Singapore Airlines and others worldwide have

cut Asian routes and flight frequencies dramatically.

Malaysia Airlines has reported a loss in revenue due to

SARS for at least RM131 million. Due to SARS, Malaysia

Airlines had to cancel its expansion plan because of the

increasing revenue losses caused by the disease. Malaysia

Airlines were also forced to cancel more than 700 flights

to SARS affected area.

Avian Influenza also known as bird flu is less dangerous

than SARS. Although the bird flu outbreak has had a very

limited impact on the economy, a number of countries

such as Thailand and Vietnam have reported several bird

human transmissions caused by the interactions between

human and the contagious poultry populations. Although

the outbreak could heavily impact the tourism and the

airlines industry, but so far, the bird flu had a very limited

economic impact on the airline industry. In 26th December

2004 the devastation caused by earth quake and tsunami

that hit many parts of Asia and east Africa caused a lot of

damage. Many beautiful vacation destinations such as

Mauritius, Sri Lanka and Phuket had serious damages

physically. Hundreds of thousands of people were killed

during the disaster. As the impact relates to world tourism,

the tsunami impact will likely be relatively small to the

airline industry. Airlines, airports, tourism organizations

and government agencies should capitalize on their

experience in dealing with “Constant Shocks” that

happened constantly. In Thailand, where Phuket is the

most known traveler’s favorite destinations, was hit quite

badly (Howell, 2015).

Five years after the millennium, technological

advancement keeps on evolving and becoming

commodities. Airlines industry must ensure they keep up

with the pace. Up to this stage, it is not exaggerating to say

almost all industries have relied upon the advancement of

high technology to increase their productivity. When it

comes to airline systems, technology has to be coupled

with the in house development system to serve the

customers better. Many carriers have make full use of

technology as it is believed by using technology it could cut

many costs and increase the productivity of the

employees. As what has been stated earlier on, in this small

industry there are only few companies in the business as a

result of high barriers to entry. Acquiring or sharing

technology within airline companies is common due to the

restriction of mergers. An example of technological

innovation, it is important for airlines to open their own

website to promote destinations and other products that

they offer (the internet era). It is obvious that low-cost

carriers are using website as a means to keep their prices

low. By using websites, they are encouraging their

passengers to purchase tickets online and passengers

Sakinah SM et al. The Factor Associated with Recovery of Malaysia Airlines

855 Systematic Reviews in Pharmacy Vol 11, Issue 1, Jan 2020

don’t need a ticket to ride on the plane just relying on the

booking number. The so-called ticketless system and the

benefits are amazing where the cost savings of printed

papers, and time consuming administration costs and

maintain them.

Many airlines company- major, regular or even low-cost

carriers are outsourcing their technology support and

software development. As what one of Malaysia Airlines

director was saying, he doesn’t want to concentrate on

what he considered as a non-primary activity for the

company. Airlines have to realize there are number of

technologies that are considered to be a non-core activity

for them and because of that, outsourcing has become a

trend for many airlines. Outsourcing of IT would become

essential as it is consuming a significant part of the airlines’

management time and resources and not to mention the

high costs thereof. Moving on from information technology

to the aircrafts, as we know, the lifelong aircrafts

competitors – Airbus and Boeing have been competing

since probably the dawn of time. Usually the criteria that

airlines are looking for when purchasing an aircraft are: i)

the maintenance capability – where the higher the number

of the engines, the higher the maintenance. ii) These

factors are among the most important requirements that

were once considered before any airlines purchase their

own aircraft (Mekki, Derigent, Rondeau, & Thomas, 2017;

Nikhashemi et al., 2017; Tarofder et al., 2019; Ulfah et al.,

2019; Tarofder et al., 2016; Udriyah et al., 2019).

Early this year, Airbus has made an announcement about

their newly craft – A380, the biggest and the most

economical flight that has ever been invented in history.

A380 is the largest passenger airplane in the world and has

seduced many airlines company with their capabilities to

bring more passengers to any destinations and the costs-

saving benefits it offered (in terms of oil consumption).

Despite friendly, consistent and very efficient cabin crew,

in order for airline companies to attract the customers,

airlines must at least install important tools such as the in-

flight entertainment systems and the beds – for the

corporate clients. In-flight entertainment system has been

a growing market segment for which it has been added just

as to offer an increasing number of products and services

to travelers 9. To enhance the travel experience, it is

common to have airlines offering the finest overhead

system and the audio in-flight system. A high quality in-

flight entertainment system, coupled with the ‘super’

comfortable seats and combined with the warm

hospitality of the cabin crew could boost up any airlines

company. The in-flight entertainment system could

differentiate one airline company from another. This

includes the space and the seats, as well as the personal

entertainment system. LanChile Airways for example, has

impressed many passengers who flew with them. The

seats are impressive, as it could be reclined farther than

any other seats in business class. SIA has been repeatedly

saying that the spacebed is a very important tool for the

company as it could attract the corporate clients. SIA has

also introduced the first in-flight service for the corporate

passengers, by offering the facility of in-seat equipment to

send text message or email addresses or even mobile

phones.

Malaysia Airlines, has unveiled the latest business class

product featuring the roomy seats that can be reclined a

full 180 degrees, and indirectly turning it into a makeshift

bed. Cathay, Emirates, SIA and Lufthansa provide the

emails service. Although it is not free, it is still worth the

value with just a minimum pay of US$9.95.Malaysia

Airlines flies to more than 100 destinations, across 6

continents. Travelers may choose any destinations that

they want to go, inbound or outbound. There are several

packages that Malaysia Airlines offer to their customers

for a simple vacation trips or even just a weekend gateway.

Packages and Promotions include ‘Global Destinations’

and ‘Malaysia Destinations’. Under these packages,

travelers may choose between two, to have a package that

gives them freedom to plan their own ways, or to pick a

package that is full with a well-planned itinerary. The

packages are named as “Escapade Free and Easy

Programs” or “Guided Packages”. If travelers plan to go to

overseas trip, there are special packages that cater the

needs for Muslim travelers – such as the food. According to

the annual report (2003/04), the most popular

destinations in that year were Europe and Middle East.

Malaysia Airlines generated most revenues from those

destinations. As for Malaysia Destinations, the national

carrier provides their best efforts to offer the best flights

and attract tourists to travel to and in Malaysia. Malaysia

Airlines Golden Holidays are the experts in offering the

various types of packages offered by them. These packages

can be customized individually so it will suit each

individual needs (Mohd-Any, Mutum, Ghazali, &

Mohamed-Zulkifli, 2019).

As a reward for being a loyal customer to Malaysia Airlines,

Malaysia Airlines commenced a loyalty program called –

Enrich in 1999. Ever since it was launched, Enrich has

become very popular and attracted many premier credit

card companies to further enhanced the joint promotions

and had increased business partner participations.

Malaysia Airlines, North West Airlines, KLM, Swiss

International Airlines, and Virgin Atlantic are among the

airlines partner. As for the credit card partners are such as

American Express, Citibank, Hong Leong Bank, HSBC,

Maybank, RHB Bank, Standard Chartered, Southern Bank

Berhad, United Overseas Bank and Westpac Australia’s

First Bank. There are many benefits and privileges awaited

for all the Enrich members such as free travels, holiday

packages, and special offers. Enrich members may use the

membership in many ways to earn the enrich points. With

sufficient points, members may redeem the points with

gifts or other items offered by Enrich.

Malaysia Airlines’ aircrafts are known to be very modern.

Passengers may choose to travel between three classes –

Economy, Golden Club or First Class. The seats featuresdin

economy class are comfortable and they are tailored to the

passengers need. Usually in long-haul flights, the seats are

coupled together with foot rests and lumbar support. In

2002, Malaysia Airlines has been named as the “Best

Economy Class in 2002”. The service offered by the cabin

crew are top notch, and the seats available are the more

comfortable compared to other airline’s economy class.

Another plus point of Malaysia Airlines’ economy class is

the in-flight entertainment. Economy class passengers

actually enjoy the benefits of which the first class

passengers would enjoy (the personal television channels

and audio channels). As an economy class passenger, the

baggage allowance is only 20 kg and passenger is only

allowed to carry one hand luggage weigh no more than 5

kg (Monks, 2014).

As for the golden club business class, the perks are of

course higher than the economy class. Passenger who flies

with this class is often invited to use the Malaysia Airlines

Golden Lounge. Baggage allowance for those who travel

with golden club class is 30 kg and allowed to carry two

pieces of hand luggage that each weighs no more than 5 kg.

The seat features in golden club class allow passengers to

seat and sleep in a very comfortable position.

Sakinah SM et al. The Factor Associated with Recovery of Malaysia Airlines

856 Systematic Reviews in Pharmacy Vol 11, Issue 1, Jan 2020

Malaysia Airlines First class defined the luxury of airline

traveling, explicitly. The seats are wide and comfortable

and it offers a selection of adjustments catering to each

passengers need. Passengers may experience the luxury of

dining with a wide selection that being served on the best

china. As a first class passenger, the allowance of 40 kg

baggage and 2 pieces of hand luggage that each weighs no

more than 5 kg is given. An exclusive access to the Golden

Lounge is being awarded to each first class passenger that

is located around the world from Kuala Lumpur to Los

Angeles.

It is undeniable in-flight entertainment is the most

important thing installed in each aircrafts for the sake of

passengers comfort. Throughout the long journey,

passengers might feel bored and the personal

entertainment would keep them from this. Malaysia

Airlines is known to be one of the best airlines that provide

its passengers the satisfaction of entertainment while

traveling. Economy class passengers can enjoy all the

benefits in the first class as well. During the traveling

period, passengers may switch in to any 11 video channels

and 19 audio channels from the given remote and may

watch them in their own personal TV that has been

installed in each seat. Although the passengers are up

above in the sky, it doesn’t mean that passengers can’t be

updated with the current world news as the news will be

updated every one hour. When the passengers are tired

with the music and movies, they may choose to play the in-

flight game with a choice of 36 Nintendo games, 4 PC

games, and 3 multiplayer PC games. To those who are not

into TV programmers, movies, music or games, then there

is in-flight reading. The in-flight reading is called Going

Places. Going Places is a truly enjoyable magazine. There

are selections of international and Malaysian Newspaper

on board too (Nasir, Ahmed, & Barkat, 2017).

The airline brings the best cuisine up to the sky to be

served to all the passengers who are on board with them.

Both Asian and Western food is included in the selection

menu. Malaysia Airlines serves food every 2 hours, and

they tend to keep their passengers ‘full’ the whole time. A

truly Malay specialty dishes are highlighted and there is no

wonder why Malaysia Airlines is one of the best when it

comes to in-flight services. Of course, there are

assessments of children’s meal as well. As a matter of fact,

Malaysia Airlines has just improved their newly children’s

meals especially for children aged 4 to 11 years. The meals

are packed in colorful takeaway meal boxes. Depending on

the length of the flight, these meals will be served at

breakfast, lunch, light meal, dinner and supper. However,

the reservation for child meal must be made during the

flight booking or 24 hours before departure time.

Passengers with special dietary requirements are allowed

to request for it. There are three types of ‘special meal’

types- religious diets, medical diets, and vegetarian meals

(Wong & Musa, 2011).

As part of the branding strategy, Malaysia Airlines created

an extravaganza television advertisement. With the theme

of “Going Beyond Expectations” Malaysia Airlines tried to

capture the worldwide target market by launching its

biggest advertising campaign. On September 2002, the

advertisements on printed media and television had been

previewed not only in Malaysia but also in 17 other

countries with the aim to inform passengers worldwide

about new products and services offered by Malaysia

Airlines. There were eighteen printed ads and a total of

seven television commercials, six of them were short

commercials and another one was a 60 minutes long

commercial. Each commercial focused on a particular

service aspect of the airline. According to TV AdEx,

Malaysia Airlines grabbed the top position in “Tops

Advertising Race on Television 2004” with 29 percent of

advertising share from January to December 2004 (Nikbin,

Iranmanesh, Hyun, Baharun, & Kim, 2015).

In August 2004, aligned with the new e-commerce site that

Malaysia Airlines launched, there were many media

publicity and full-page newspaper advertisements. Those

advertisements stated about the discounted fares also

known as ‘supersavers’ that Malaysia Airlines would give

to those who booked online. Malaysia Airline’s print

advertisements had always grabbed the audience

attentions from newspaper to billboards. In each of the

print advertisement, Malaysia Airlines tried to convey the

message with this tagline - “Little details matter to us,

because they matter to you”. With such a catchy tagline,

travelers are hoped to understand the message from

Malaysia Airlines and it will encourage them as the

travelers feel they are being appreciated by believing that

Malaysia Airlines would give them the best service

possible. Advertisements displaying the awards won like

“Best Cabin Crew”, “Best Signature Dish” and “Top Five

Airlines” would certainly attract the business travelers.

As part of Malaysia Airlines strategy to enhance its brand,

product and services, Malaysia Airlines has undertaken

some major sponsorship of promotional sports activities

in to promote the company and also the country as an ideal

holiday destination. During its last financial year, Malaysia

Airlines had sponsored games Early this year, March 1

2005, Malaysia Airlines has organized a joint partnership

of Malaysia Airlines and MATTA Charity Golf 2005. This

was the first ever and the most awaited and the Largest

Simultaneous Tee off Golf Tournament in Malaysian

History. This event had been recorded in Malaysia Book of

Records. Being the consistent participant in Malaysia’s

sports tourism activities Malaysia Airlines is positive that

this is the most magnificent marketing tool as to promote

Malaysia Airlines brand name to the world (K. L. See,

Hafizam, Aziz, Azaini, & Shah, 2016).

Apart from promoting Malaysia Airlines through

television advertisements, Malaysia Airlines took a step

further ahead by sponsoring some television programmes

in local and abroad. In June 2003, Malaysia Airlines has

signed a joint partnership with TV3, a local television

company, for a reality programme called “ExploRace”.

ExploRace is a custom made show for all Malaysians and is

the most challenging reality TV show in Malaysia where

teams are required to outdo the others in an all-out race.

The aim of the programme was to let them experience and

discover, as they track through local destinations to

complete their tasks, contestants will also get to discover

new things about the people, their cultures and above all,

the spirit of the competition (Nikbin, Ismail, Marimuthu, &

Salarzehi, 2012).

Malaysia Airlines collaborated with BBC World to extend

its brand proposition, “Going beyond Expectations”. The

programme called “World City Breaks”, highlighted world

top 10 destinations. The key objective is to let the target

audience know about their product lines, aware of their

branding campaign and to let the audience know their new

airlines’ facilities. Malaysia Airlines is well aware that BBC

World is highly targeted on frequent business travelers;

therefore they took this advantage to promote their

business class. Malaysia Airlines is also sponsoring the

“World Destinations” at Discovery travel and adventure

channel, also, highlighting beautiful tourist’s destinations.

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ANALYSIS

Malaysia Airlines has brought the world class musical

teams to Malaysia by sponsoring the “Saturday Night

Fever” a musical theatre that defined the disco era of the

seventies. The investment in such performance was part of

Malaysia Airlines commitment to diversify the country’s

tourism offerings and make Kuala Lumpur a focal city for

the performing arts in the region. The sponsorship was

also part of its “Going Beyond Expectations” campaign to

demonstrate the national carrier’s commitment towards

attracting passengers in fresh and exciting ways. In this

chapter, Environmental Scanning can further be divided

into four segments, and they are (Figure 1):

Figure 1: Major Segments of Environmental Scanning

PEST Analysis

In order for Malaysia Airlines to face the external

environments that are growing more complex and global

day by day, PEST Analysis is being used. PEST is a short

form of Political, Economy, Social-cultural, and

Technological factors.

POLITICAL FACTOR

1. The Iraq war has given many negative impacts

towards airline industry- including the traffic to and from

Middle East destinations has declined, and the increase in

oil prices.

2. Strong support from the government on airline

industry – by the development of KLIA, and the rapid

promotion of “Visit Malaysia” in overseas.

ECONOMIC SITUATION

1. The Asian economy crisis has resulted in

uncertainties and many investors have lost confidence in

Asian country’s currencies

2. Following the September 11 attacks, more than

400,000 employees have lost their jobs. The attacks have

affected every segments of the industry.

3. “Bali Bombing” tragedy has killed many tourists

that mostly came from Australia, and by this tragedy,

airline industry had a severe impact because the industry

is heavily relying on tourism industry.

4. The miscellaneous outbreaks such as Severe

Acute Respiratory Syndrome (SARS), and Avian Influenza

(bird flu) killed many people – flights cancellation were at

the highest during the outbreak period.

5. Tsunami had hit quite a number of Asian

countries and damaged many tourism spots.

Internal Analysis

Malaysia Airlines’ internal resources are the most critical

source of wealth for them. Through internal analysis,

Malaysia Airlines could perform evaluation in identifying

its internal strengths and weaknesses. This analysis is

concerned both with the past and future, and indirectly it

can indicate how the airline has performed in the past. It is

very important for them to identify their strategic

objectives and key success factors as this analysis could

establish and achieve their objectives (Nikbin, Marimuthu,

Hyun, & Ismail, 2015).

Competencies Analysis

Below are the analysis of Malaysia Airlines strength and

weaknesses of major functional resources within Malaysia

Airlines. The resources of Malaysia Airlines are mostly

based from its own competencies, (please refer to Table

2):

1. Operational Analysis

2. Value Added Analysis

3. Cost Efficiency Analysis

4. Robustness Analysis

Table 2: Internal Environment Resources

COMPETENCIES

ACTIONS

1. Operational

Analysis

Examine the strength

and weaknesses of

the overall operation

in Malaysia Airlines

including the

customer service

activities.

2. Value Added

Analysis

Analyze the value

added services that

Malaysia Airlines

offers to customers.

3. Cost Efficiency

Analysis

Analyze Malaysia

Airlines cost

efficiencies.

4. Robustness Analysis

Analyze Malaysia

Airlines’ Robustness.

Cost Efficiencies Analysis

Cost efficiencies analysis will be used to examine the

means that Malaysia Airlines use as to save its cost but still

retain the quality. One of the ways that Malaysia Airlines

use and found profitable is to engage in alliance

constituting two or more airline companies, and it is called

code-sharing agreement. Although Malaysia Airlines has

signed agreements with many airline companies, the

Airline has not signed up with any global airline Alliance,

unlike its competitor, Singapore Airline belongs to the Star

Alliance network. Malaysia Airlines should carefully

review this matter, they have been holding up in joining

the international alliance for sometimes already. The

international alliance could bring a lot of benefits to the

airline as well as the passengers (Rosnan & Mahmod,

2012).

CONCLUSION

Nevertheless, in order to respond to these fierce

competitions, Malaysia Airlines should create new policies

and adapt the entire organization to keep abreast of on-

going changes in the industry by looking at each and every

different angle. It is without any doubt that other

strategies such as enhancing its customer services and

airline alliances play important roles for achieving its

vision and goals.

External Analysis – SEPT Analysis, Industry

Analysis.

Internal Analysis – Functional Resource Analysis

Strategic Choice – SWOT Analysis, External

Factors, Internal Factors

Malaysia Airlines Diagnosis

Sakinah SM et al. The Factor Associated with Recovery of Malaysia Airlines

858 Systematic Reviews in Pharmacy Vol 11, Issue 1, Jan 2020

Fortunately, Malaysia Airlines receives strong bless and

support from the Malaysian government. However,

Malaysia Airlines should rather be proactive, to grab the

advantage of having a strong goodwill as the leader of

national carrier whilst providing the highest quality of

services to the respective customers. Feedback given by

the customers should be taken in a serious manner and

corrective actions should be deployed promptly.

Brand image and alliances for volume are important and

strong capital backing is also crucial, and has marginal

returns. With high intensity of rivalry, every airline in the

region wants to provide the greatest service on the sky,

want to fly its customers to more destinations, giving out

low-fares that they could ever give, and endow customers

with the best ground support; the increasing competition

in this industry should be seen as a healthy rivalry. As a

result, Malaysia Airlines had shown their desire to go

beyond expectation and had gone through a lot of

improvement over the years (K. F. See & Rashid, 2016).

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