Tuesday, 22 July 2014

The Future Of Malaysia Airlines

I believe that the worst of times are, ironically, the times of golden opportunity.

Malaysia Airlines has taken such a beating that fewer people would be willing to fly it, save the pragmatic, logical thinkers who know that the disasters have less to do with negligence than with pure bad luck.

However, given that Malaysia Airlines is turning into a white elephant rather than a cash cow, hopefully, the Malaysian government regards it as being a low priority and gives it to a non-crony to manage.

Naturally, as we have seen in the past, when this happens, the airlines has always managed to tighten its belt and leap back into the black after years of being in the red.

It always happens and I am looking forward to it happening again.

Radical change is what we need, and it's not going to happen within our ruling coalition and its cronies. As Malaysians, you and I know that.

TIME has a piece on it: Malaysia, the World’s Unluckiest Airline, Will Now Struggle to Survive

The next months could prove humbling for an airline that had grand ambitions. The Malaysian government had high hopes that its national carrier would compete with the region’s best, and invested much money and emotion into building it.

But Malaysia Airlines got badly squeezed in the fiercely contested Asian airline industry. Its cost base is too high to compete with lean and mean budget carrier AirAsia, also based in Kuala Lumpur. At the same time, it lacks the prestigious brand image to raise its ticket prices and take on East Asia’s more premier airlines, such as Singapore Airlines and Hong Kong’s Cathay Pacific. As a result, the company has been bleeding for years.

The airline’s Kuala Lumpur–listed parent, Malaysian Airline System, has racked up losses of more than $1.4 billion since 2011. Management has tried cutting costs and improving service to turn around the airline’s fortunes, but such efforts were making only minimal progress.

The sentiments are that of foreign observers and may not necessarily have a pulse on what exactly is going on, but it gives the mood on how fragile the situation is.

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