Malaysia Airlines

Malaysia Airlines Berhad
Penerbangan Malaysia Berhad
IATA ICAO Callsign
MH MAS MALAYSIAN
Founded 1 May 1947 (1947-05-01) (as Malayan Airways)
Commenced operations MAS: 1 October 1972 (1972-10-01)
MAB: 1 September 2015 (2015-09-01)
Hubs Kuala Lumpur International Airport
Secondary hubs
Frequent-flyer program Enrich
Airport lounge Golden Lounge
Alliance Oneworld[1]
Subsidiaries
Fleet size 77
Destinations 55
Parent company Khazanah Nasional Berhad[2][3]
Headquarters Kuala Lumpur International Airport, Sepang, Malaysia
Key people Peter Bellew (CEO)
Net income Increase MYR 51 million (2016 Q1)
Profit Increase MYR 14 million (2016 Q1)
Employees 14,000 (2016)
Website www.malaysiaairlines.com

Malaysia Airlines Berhad (MAB) (Malay: Penerbangan Malaysia Berhad) formerly known as Malaysian Airline System Berhad (MAS; Malay: Sistem Penerbangan Malaysia); branded as Malaysia Airlines; (Malay: Penerbangan Malaysia; MYX: 3786 as Malaysian Airline System Berhad) is a major airline operating flights from Kuala Lumpur International Airport and from secondary hubs in Kota Kinabalu and Kuching to destinations throughout Asia, Oceania and Europe. Malaysia Airlines is the flag carrier of Malaysia and a member of the oneworld airline alliance. The company's headquarters are located at Kuala Lumpur International Airport. In August 2014, the Malaysian government's sovereign wealth fund Khazanah Nasional—which then owned 69.37% of the airline—announced its intention to purchase remaining ownership from minority shareholders and de-list the airline from Malaysia's stock exchange, thereby renationalising the airline.

Malaysia Airlines owns two subsidiary airlines: Firefly and MASwings. Firefly operates scheduled flights from its two home bases Penang International Airport and Subang International Airport. The airline focuses on tertiary cities. MASwings focuses on inter-Borneo flights. Malaysia Airlines has a freighter fleet operated by MASkargo, which manages freighter flights and aircraft cargo-hold capacity for all Malaysia Airlines' passenger flights.

The airline began as Malayan Airways Limited and flew its first commercial flight in 1947. Malayan Airways was headquartered in Singapore. A few years after Singapore's expulsion from Malaysia, the airline was renamed Malaysia Singapore Airlines (MSA), before its assets were divided in 1972 to form Singapore flag carrier Singapore Airlines and Malaysian flag carrier Malaysian Airline System.[4]

Despite numerous awards from aviation industry and recognition from the World Travel Awards as the leading airline in and to Asia (2010–11, 2013) [4] the airline struggled to cut costs to compete with new, low-cost carriers in the region since the early 2000s.[5] In 2013, the airline initiated a turnaround plan after large losses beginning in 2011 and cut routes to prominent, but unprofitable, long-haul destinations, such as the Americas (Los Angeles and Buenos Aires) and South Africa.[6] Malaysia Airlines also began an internal restructuring and intended to sell units such as engineering and pilot training.[6]

In 2014, Malaysia Airlines lost two aircraft—Flight 370 and Flight 17—less than five months apart, exacerbating the airline's financial troubles and leading to the renationalisation of the airline. Prior to 2014, MAS had one of the world's best safety records—just two fatal accidents in 68 years of operation,[7] including the hijacking in 1977 of Flight 653 that resulted in 100 deaths.

History

In 1947, the airline began as Malayan Airways, being renamed Malaysian Airways after Malaysia gained independence. After that, it changed its name once more to Malaysia-Singapore Airlines. MSA ceased operations in 1972, and two airlines were born — Malaysian Airline System(MAS) and Singapore Airlines(SIA).

An Airspeed Consul, the first aircraft type operated by Malayan Airways.

Malaysian aviation history

Scheduled air passenger and mail services in Malaya commenced in 1937 when Wearne's Air Service (WAS) commenced operating services between Singapore, Kuala Lumpur and Penang. Wearne's Air Service was started by two Australian brothers, Theodore and Charles Wearnes.[8] The service commenced as a thrice weekly flight between Singapore and Penang. The first flight, using an 8-seater de Havilland DH.89A Dragon Rapide took place on 28 June 1937[9] This inaugural flight departed Singapore from the then brand-new Kallang Airport, which had just opened earlier in the same month on 12 June[10] Later a second D.H.89A enabled the expansion to daily services as well as the addition of Ipoh as a destination. The WAS services ceased with the onset of the World War II Japanese occupation of Malaya and Singapore.

Beginnings

An MSA Boeing 707 at Zürich-Kloten Airport. (1972)

An initiative[11] by the Alfred Holt's Liverpool-based Ocean Steamship Company, in partnership with the Straits Steamship Company[12] and Imperial Airways, resulted in the incorporation in Singapore on 12 October 1937, Malayan Airways Limited (MAL). But the first paying passengers could be welcomed on board only some 10 years later. After the war, MAL was restructured to include just the partnership of Straits Steamship and Ocean Steamship. The airline's first flight was a charter flight from the British Straits Settlement of Singapore to Kuala Lumpur, on 2 April 1947, using an Airspeed Consul twin-engined aircraft.[13] This inaugural flight on the "Raja Udang",[14] with only five passengers, departed Singapore's Kallang Airport and was bound for Kuala Lumpur's Sungai Besi Airport. Weekly scheduled flights quickly followed from Singapore to Kuala Lumpur, Ipoh and Penang from 1 May 1947 with the same aircraft type.[15] The airline continued to expand during the rest of the 1940s and 1950s, as other British Commonwealth airlines (such as BOAC and Qantas Empire Airways) provided technical assistance, as well as assistance in joining IATA. By 1955, Malayan Airways' fleet had grown to include a large number of Douglas DC-3s, and went public in 1957. Other aircraft operated in the first two decades included the Douglas DC-4 Skymaster, the Vickers Viscount, the Lockheed L-1049 Super Constellation, the Bristol Britannia, the de Havilland Comet 4 and the Fokker F27. Over the next few years, the airline expanded rapidly, boosted by post-war air travel demand when flying became more than a privilege for the rich and famous. By 12 April 1960, the airline was operating Douglas DC-3s, Super Constellations and Viscounts on new routes from Singapore to Hong Kong, and from Kuala Lumpur to Bangkok via Penang. Flights were also introduced from Singapore to cities in the Borneo Territories, including Brunei, Jesselton (now Kota Kinabalu), Kuching, Sandakan and Sibu.

With the delivery of an 84-seat Bristol Britannia in 1960, the airline launched its first long-haul international flight, to Hong Kong. When Malaya, Singapore, Sabah and Sarawak formed the Federation of Malaysia in 1963, the airline's name was changed, from "Malayan Airways" to "Malaysian Airways" (though still abbreviated to MAL). MAL also took over Borneo Airways. In 1966, following Singapore's separation from the federation, the airline's name was changed again, to Malaysia Singapore Airlines (MSA). The next year saw a rapid expansion in the airline's fleet and routes, including the purchase of MSA's first Boeing aircraft: the Boeing 707s, as well as completion of a new high-rise headquarters in Singapore. Boeing 737s were added to the fleet soon afterwards.

Incorporation

Boeing 737-200 of MAS at Brunei International Airport in 1987.

The differing needs of the two shareholders, however, led to the break-up of the airline just 6 years later. The Singapore government preferred to develop the airline's international routes, while the Malaysian government had no choice but to develop the domestic network first before going regional and eventually international. MSA ceased operations in 1972, with its assets split between two new airlines; Malaysian Airline System (MAS), and Singapore Airlines.

With the Singapore government determined to develop Singapore Airlines' international routes, it took the entire fleet of seven Boeing 707s and five Boeing 737s, which would allow it to continue servicing its regional and long-haul international routes. Since most of MSA's international routes were flown out of Singapore, the majority of international routes were in the hands of Singapore Airlines. In addition, MSA's headquarters, which was located in Singapore, became the headquarters of that airline.

The initials MSA were well regarded as an airline icon, and both carriers tried to use them. Malaysian went for MAS by just transposing the last two letters and choosing the name Malaysian Airline System, while Singapore originally proposed the name Mercury Singapore Airlines to keep the MSA initials,[16] but changed its mind and went for SIA instead. Acronyms for airline names later became less fashionable, and both carriers then moved on to their descriptive names.

Expansion

Revenue passenger-kilometers, in millions
Year Traffic
1975 1633
1979 2825
1981 4290
1990 11909
1995 22558
2000 37939
Source: Air Transport World
Malaysia Airlines DC-10-30, a backbone for the medium-long haul expansion of the airline from 1976 to March 2000.

Malaysian Airline System took all domestic routes within Malaysia and international routes out of that country, as well as the remaining fleet of Fokker F27's. It began flights on 1 October 1972 and soon expanded, including introducing flights from Kuala Lumpur to London.[17]

In that year MAS operated flights to more than 34 regional destinations and six international services. In 1976, after receiving its DC-10-30 aircraft, MAS scheduled flights reached Europe, with initial flights from Kuala Lumpur to Amsterdam, Paris and Frankfurt.

An economic boom in Malaysia during the 1980s spurred growth at Malaysia Airlines. By the end of the decade MAS was flying to 47 overseas destinations, including eight European destinations, seven Oceania destinations, and United States destinations of Los Angeles and Honolulu. In 1993 Malaysia Airlines reached South America when the airline received its Boeing 747 aircraft. MAS became the first airline in Southeast Asia to serve South America via its flights to Buenos Aires, Argentina. Malaysia Airlines also flew to Mexico City between 1994 and 1998 with fifth-freedom rights to carry passengers between Mexico City and Los Angeles, en route to Kuala Lumpur.

First period of unprofitability

Prior to the Asian Financial Crisis in 1997, the airline suffered losses of as much as RM 260 million after earning a record-breaking RM333 million profit in the financial year 1996/1997. The airline then introduced measures to bring its P&L back into the black. For the financial year 1999/2000, the airline cut its losses from RM700 million in the year 1998/1999 to RM259 million. The airline plunged into further losses in the following year, however, amounting to RM417 million in FY2000/2001 and RM836 million in FY2001/2002. With these losses, the airline cut many unprofitable routes, such as Brussels, Darwin, Madrid, Munich and Vancouver.

The airline recovered from its losses in the year 2002/2003. It achieved its then-highest profit in the year 2003/2004, totalling RM461 million.

Second period of unprofitability

Regional services flown by Fokker F50s, such as this one, were once operated at a substantial loss.

In the year 2005, Malaysia Airlines reported a loss of RM1.3 billion. Revenue for the financial period was up by 10.3% or RM826.9 million, compared to the same period for 2004, driven by a 10.2% growth in passenger traffic. International passenger revenue increased by RM457.6 million or 8.4%, to RM5.9 billion, while cargo revenue decreased by RM64.1 million or 4.2%, to RM1.5 billion. Costs increased by 28.8% or RM2.3 billion, amounting to a total of RM 10.3 billion, primarily due to escalating fuel prices. Other cost increases included staff costs, handling and landing fees, aircraft maintenance and overhaul charges, Widespread Assets Unbundling (WAU) charges and leases.[18]

The Government of Malaysia appointed Idris Jala as the new CEO on 1 December 2005, to execute changes in operations and corporate culture. Several weaknesses in airline operations were identified as the causes of the RM1.3 billion loss. These included esclating fuel prices, increased maintenance and repair costs, staff costs, low yield per available seat kilometre ("ASK") via poor yield management and an inefficient route network. Under the leadership of Idris Jala, Malaysia Airlines launched its Business Turnaround Plan in 2006, developed using the Government-linked company (GLC) Transformation Manual as a guide.

The most substantial factor in the losses was fuel costs. For the period, the total fuel cost was RM3.5 billion, representing a 40.4% increase compared to the same period in 2004. Total fuel cost increases comprised RM977.8 million due to higher fuel prices and another RM157.6[18] million due to additional consumption. In the third quarter, fuel costs were RM1.26 billion, compared to the RM1.01 billion in the corresponding period in 2004, resulting in a 24.6% increase or RM249.3 million.[18]

Another factor for the losses was poor revenue management. MAS substantially lagged its peers on yield. Some of this gap was due to differences in traffic mix,[19] with less business traffic to and from Malaysia than to and from Singapore, but much of it was due to weaknesses in pricing and revenue management, sales and distribution, brand presence in foreign markets, and alliance base. Malaysia Airlines has one of the lowest labour costs per ASK at USD0.41, compared to other airlines such as Cathay Pacific and Singapore Airlines at USD0.59 and USD0.60[19] respectively. Despite low labour costs, however, the ratio of ASK revenue to this cost was, at 2.8, much lower than Singapore Airlines, where the ratio is 5.0, and slightly higher than Thai Airways[19]

There are other factors listed in the Business Turnaround Plan of Malaysia Airlines, all leading to the net loss of RM1.3 billion in the year 2005.

Recovery from unprofitability

The Bangunan MAS in Kuala Lumpur (second from the left, pictured in 2013) once served as the company headquarters until its move to the Sultan Abdul Aziz Shah Airport in 2006 under strict cost-cutting measures.

Under the various initiatives, launched together with the Business Turnaround Plan, Malaysia Airlines switched from losses to profitability between FY2006 and FY2007. When the Business Turnaround Plan came to an end, the airline posted a record profit of RM853 million(USD265 million) in 2007, ending a series of losses since 2005. The result exceeded the target of RM300 Million by 184%.[20]

Route rationalising was one of the major contributors to the airline's return to profitability. Malaysia Airlines pared its domestic routes from 114 to 23, and also cancelled virtually all unprofitable international routes. Apart from that, Malaysia Airlines also rescheduled all of its flight timings and changed its operations model from point-to-point services to hub and spoke services.

Additionally, the airline started Project Omega and Project Alpha to improve the company's network and revenue management. Emphasis has been placed on six areas: pricing, revenue management, network scheduling, opening storefronts, low season strategy and distribution management.

Malaysia Airlines has been involved in discussions for new aircraft purchases, using its cash surplus of RM5.3 billion to eventually purchase narrow-body aircraft and wide-body aircraft.[21]

Despite these achievements, critics continue to deride the carrier for lagging behind its competitors in the region. This notion is not helped by the fact Malaysia Airlines has not made substantial investments in customer service, especially compared to Thai Airways or Singapore Airlines.

On 22 December 2009, Malaysia Airlines announced the purchase of 15 new Airbus A330 aircraft, with options for another 10. Expected to be delivered between 2011 and 2016, they are intended to operate on medium-haul routes to eastern Asia, Australia, and the Middle East. The airline's plans are to run Airbus A380 planes, which were introduced into service in 2012, on long-haul routes, A330s on medium-haul routes, and Boeing 737 aircraft on short-haul routes. Under this plan, it is unclear where Boeing wide-bodies currently in the fleet would fall.[22]

Third unprofitability

Malaysia Airlines recorded a stunning net loss of MYR2.52 billion for the full year 2011, which was the largest in its company history, due to rising fuel costs and mismanagement.[23] A major restructuring to the Board of the Company saw the appointment of a new Group Chief Executive Officer. Ahmad Jauhari Yahya was appointed as Group CEO in September 2011. One of the first initiatives to stop the losses was a rationalisation of the network. The company suspended services to Surabaya, Karachi, Dubai, Dammam[24] and Johannesburg in January 2012, and ceased flights to Cape Town, Buenos Aires as well as Rome in February 2012.

Business turnaround plan

On 28 February 2013, Ahmad Jauhari Yahya, Group Chief Executive Officer of Malaysia Airlines, reported a net profit of RM51.4mil for the fourth quarter, reversing the net loss of RM1.3bil a year earlier. MAS' improved financial performance last year was mainly attributable to its route rationalisation programme, which saw an overall 8% reduction in available seat kilometre (ASK). This was matched by a marginal 1% reduction in revenue to RM13.76bil in 2012 and seat factor holding at 74.5%. The reduced ASK also helped MAS register a corresponding 14% decrease in expenditure.[25]

2014 aircraft losses

In 2014, Malaysia Airlines lost two Boeing 777 aircraft within 131 days, with a total of 537 passengers and crew lost. Flight 370 disappeared in an unknown location (most likely in the Southern Indian Ocean) on 8 March with 239 people on board, leaving little evidence behind; little debris from the plane has been found, mostly off the coast of Réunion.[26][27] Flight 17 crashed in eastern Ukraine on 17 July with 298 people on board, after being shot down with a Buk surface-to-air missile.[28]

Malaysia Airlines was struggling to cut costs to compete with a wave of new, low-cost carriers in the region when Flight 370 vanished without a distress signal. Malaysia Airlines lost RM443.4 million (US$137.4 million) in the first quarter of 2014.[29] The second quarter—the first in the aftermath of Flight 370's disappearance—saw a loss of RM307.04 million (US$97.6 million), which represented a 75% increase over losses from the second-quarter of 2013.[30] Malaysia Airlines has not made a profit since 2010.[30] In the previous three years, Malaysia Airlines had booked losses of: RM1.17 billion (US$356 million) in 2013, RM433 million in 2012, and RM2.5 billion in 2011.[31] Industry analysts expect Malaysia Airlines to lose further market share and face a challenging environment to stand out from competitors while addressing their financial plight.[31] The company's stock, down as much as 20% following the disappearance of Flight 370, had fallen 80% over the previous five years, which contrasts with a rise in the Malaysian stock market of about 80% over the same period.[32]

A month after the disappearance, Malaysia Airlines' chief executive Ahmad Jauhari Yahya acknowledged that ticket sales had declined but failed to provide specific details. This may partially result from the suspension of the airline's advertisement campaigns following the disappearance. In China, where the majority of passengers were from, bookings on Malaysia Airlines were down 60% in March.[32] Mr. Ahmad said he wasn't sure when the airline could start repairing its image, but that the airline was adequately insured to cover the financial loss stemming from Flight 370's disappearance.[29][31] In August, the airline warned of poor second-half earnings, citing a 33% decline in average weekly bookings following the loss of Flight 17.[30] Media reported that some flights were largely empty and that the airline had slashed prices well below competitors on several important routes.[32][33][34]

Malaysia Airlines originally planned to sell off or lease its entire fleet of six Airbus A380s, however as of July 2015, former Aer Lingus CEO Christoph Mueller, who was appointed CEO in May, announced that it was too early, and opted to retire only two, pulling them from the KL-Paris route. Mueller also stated the airline is technically bankrupt. As part of the restructuring, 6,000 employees received termination letters.

Renationalisation

Even before the crash of Flight 17, many analysts and the media suggested that Malaysia Airlines would need to rebrand and repair its image and/or require government assistance to return to profitability.[35][36][37][38][39] On 8 August, trading in the company's stock was temporarily suspended when Khazanah Nasional—the majority shareholder (69.37%)[40] and a Malaysian state-run investment arm—requested that MAS's Board of Directors undertake a selective capital reduction exercise (e.g. buyback or cancel stock of other shareholders);[41] Khazanah announced it will spend 1.38 billion ringgit (US$431 million; 27 sen per share) to compensate minority shareholders (a 12.5% premium of 7 August closing price).[42][43][44] At the time, Khazanah Nasional did not announce much about its plans for the airline except that the airline had "substantial funding requirements"[42] and that a "comprehensive review and restructuring"[42] was needed.

On 29 August, Khazanah released a report—Rebuilding a National Icon: The MAS Recovery Plan[45]—which outlines their plan for the restructuring of MAS and the process of completing the takeover. About 6,000 jobs (about 30% of MAS's workforce) will be eliminated and the carrier's route network will be shrunk to focus on regional destinations rather than unprofitable long-haul routes.[46] Khazanah plans to de-list the airline from Malaysia's stock exchange by the end of 2014 and plans to return it to profitability by late 2017, re-listing the airline by 2018 or 2019.[46] On the business/legal side, Khazanah intends to transfer the relevant operations, assets, and liabilities of Malaysian Airline System Berhad into a new company (no name given in documents) by July 2015.[45]:2

During May 2015 it was announced that the airline will be transferred to a newly founded Malaysia Airlines Berhad by 1 September 2015, with rebranding of the airline also commencing that day. The new company will see an heavily reduced workforce and adjusted route network with focus on Asia according to its new CEO, Christoph Mueller.[47] He also announced that Malaysia Airlines put two of its Airbus A380s up for sale.[47]

On September 10, 2015, Malaysia Airlines Berhad announced that they will add 4 new Airbus A350-900 XWB series aircraft to their fleet by 2017 to the middle of 2018. The aircraft will be leased from Air Lease Corporation. The airline also expects to add two more A350-900s as well as two A330-900neo aircraft in the upcoming future. The CEO of MAB, Christoph Mueller is expecting the A350's to deliver exceptional passenger comfort and improve the overall efficiency of their fleet.

On October 11, 2015, Malaysia Airlines Berhad announced that it is set to undergo a brand overhaul involving a new name, logo and livery for its aircraft, with the changes to be unveiled on a date unknown. On November 3, 2015, Malaysia Airlines introduced their new business class seats which will be fitted on all of their A330's by September 2016. The CEO also said that they will consider on introducing Premium Economy Class next year.

In April 2016, CEO Christoph Mueller resigned from his post after less than a year of leading the carrier’s reorganising efforts, citing changing personal circumstances. Mueller initially planned continue to serve as CEO until September 2016 and stay on the airline’s board as a non-executive director to oversee the transition to a new CEO.[48] It was subsequently announced that former chief operating officer Peter Bellew took over Mueller as the new chief with effect from July 1, 2016,[49] effectively cutting Mueller's tenure by a further two months.

Corporate affairs

Head office

Former MAS head office at Subang Airport: Complex A

The airline has its headquarters and registered office on the first floor of Administration Building, South Support Zone at Kuala Lumpur International Airport, Sepang.[50] The move was completed in December 2015.[51]

Previously the airline headquarters were on the third floor of the MAS Administrative Complex at Subang Airport,[52][53] in Subang.[54] Prior to the construction of the Kuala Lumpur MAS headquarters, the airline rented space in the UMBC headquarters.[55] The airline had a permanent corporate headquarters in the Bangunan MAS,[56] a 34-36 story[54][55] building it owned along Jalan Sultan Ismail,[55] in the Golden Triangle.[54] The airline occupied 20 stories in the building.[54] The building was built for RM88mil. In 2005 The Star said that the building was "reported to be worth between RM300mil and RM350mil".[55] At one time before 2005 the airline chairperson, Raja Tun Mohar, made an oral promise to Tun Abdul Razak of the Government of Malaysia that the airline would not sell its headquarters.[55] The airline had 600 employees in the building.[54]

In 2006,[54] the airline moved its head office from the Kuala Lumpur building to the former headquarters in Subang,[54] to reduce inefficiencies and generate cash.[57] Channel News Asia stated that the airline had been "forced" to sell the former headquarters.[58] Idris Jala, the managing director, said that the sale could net RM3bil. In the event it did not, the airline would try to rent out the floors it occupied. The first phase was scheduled to occur from January to March of that year, with the chairperson, executive director, managing director, company secretary, corporate communication officer, and finance communication officer moving to the Subang facility. In June 2006, Phase II was planned as a move for the distribution, marketing, and sales divisions of the company, to Administration Block Three.[54]

Around 2007 Permodalan Nasional Berhad purchased Bangunan MAS from the airline. The new owners planned to remodel the building, by installing a five star hotel apartment block and upgrade the offices to Grade A++.[59]

The airline planned to relocate its headquarters from Sultan Abdul Aziz Shah Airport to Kuala Lumpur International Airport in Sepang, Selangor in Greater Kuala Lumpur in February 2012.[60]

Subsidiaries

Malaysia Airlines has diversified into related industries and sectors, including aircraft ground handling, aircraft leasing, aviation engineering, air catering, and tour operator operations. It has also restructured itself by spinning-off operational units as fully owned subsidiaries to maintain its core business as a passenger airline. In 2013, Malaysia Airlines has 28 subsidiaries, with 25 of them fully owned by Malaysia Airlines.[61]

Some of the subsidiaries include:

CompanyTypePrincipal activitiesIncorporated inGroup's equity shareholding
Malaysia Airlines Cargo Sdn. BhdSubsidiaryCargoMalaysia100%
GE Engine Services Malaysia AssociateEngine OverhaulMalaysia30%
MASwings Sdn. Bhd.SubsidiaryAirlineMalaysia100%
Firefly Sdn. Bhd.SubsidiaryAirlineMalaysia100%
MAS Aerotechnologies Sdn BhdSubsidiaryDormantMalaysia100%
MAS Golden Holidays Sdn BhdSubsidiaryDormantMalaysia100%
Malaysian Aerospace Engineering Sdn BhdSubsidiaryDormantMalaysia100%
MAS Academy Sdn BhdSubsidiaryDormantMalaysia100%
Abacus Distribution Systems (Malaysia) Sdn BhdSubsidiaryComputer reservation systemMalaysia80%
Taj Madras Flight Kitchen LimitedAssociateCateringIndia20%
MAS Awana Services Sdn BhdSubsidiaryCatering and cabin handling servicesMalaysia60%
Brahim's Airline Catering, formerly known as LSG Sky Chefs AssociateCatering, cabin handling and cleaning servicesMalaysia30%

Financial highlights

Malaysia Airlines experienced a RM1.25 billion loss in FY2005. Since then, the Business Turnaround Plan was introduced to revive the airline, in the year 2006. At the end of the airline's turnaround program, in financial year 2007, Malaysia Airlines gained RM851 million net profit: a swing of RM987 million compared to RM134 million in losses in FY2006, marking the national carrier’s highest-ever profit in its 60-year history. The achievement was recognised as the world’s best airline-turnaround story in 2007, with Malaysia Airlines being awarded the Phoenix award by Penton Media's Air Transport World.[62]

Malaysia Airlines financial highlights.[63]
Year endedRevenue
(RM '000)		Expenditure
(RM '000)		Profit/(Loss)
after tax (RM '000)		Shareholders
fund (RM '000)		EPS after tax
(cents)
31 March 20028,864,3858,872,391Increase336,5312,562,841Increase38.7
31 March 20038,780,8208,591,157Increase461,1433,023,984Decrease36.8
31 March 200411,364,30911,046,764Decrease326,0793,318,732Decrease26.0
31 December 2005 (9 mos)9,181,33810,434,634Decrease(1,251,603)2,009,857Decrease(100.2)
31 December 200613,407,24013,641,880Increase(133,737)1,873,425Increase(10.9)
31 December 200715,232,74114,404,400Increase852,7433,934,893Increase58.1
31 December 200815,570,14115,299,234Decrease271,7954,119,822 Decrease14.6
31 December 2009 11,605,511 12,288,452 Increase522,948 699,693Increase25.3
31 December 2010 13,585,559 13,485,355 Decrease237,346 3,524,166 Decrease7.2
31 December 2011 13,901,421 16,485,693 Decrease(2,521,325) 1,042,508 Decrease(75.5)
31 December 2012 13,756,411 14,162,738 Increase(430,738) 2,123,144 Increase(6.1)
31 December 2013 15,121,204 16,314,775 Decrease(1,168,839) 4,033,923 Decrease(8.7)

Branding

From the late 1990s up to 2007, Malaysia Airlines used the Going Beyond Expectations slogan to brand itself internationally. With the rollout of the Business Transformation Plan in 2008,[64] the CEO of Malaysia Airlines rejected the idea of using MH's network or certain other features as its new branding strategy.[65] Instead, the new branding strategy slogan is More than just an airline code. MH is Malaysian Hospitality, to emphasise the hospitality of its cabin crew instead of the airline's network and cabin classes.[66]

Since 2013, the airline has been using the slogan Journeys are made by people you travel with, however with the onset of Flight 370 and Flight 17, the airline has used a number of slogans including "#keepflying" and "#flyinghigh". The hashtag "#bettertomorrow" was used after the renationalization plan was announced, and the slogan "#todayishere" when the airline was nationalized on 1 September 2015. It is expected that a new slogan will be launched when the airline rebrands itself.

Corporate image

Malaysia Airlines introduced the Sarong Kebaya design on 1 March 1986[67] for female flight attendants. It was designed by the School of Fashion at Mara Institute of Technology (Malay: Institut Teknologi Mara) and later known as Mara University of Technology (Malay: Universiti Teknologi Mara). The batik material depicts the kelarai motif, which is a bamboo weave pattern. It appears in the background in subdued hues of the basic uniform colour. Superimposed on the kelarai motif is a mixture of Malaysian flora, such as the cempaka, jasmine and the leaves of the hibiscus. The geometric Sarawakian motif is used for the lapels of the baju, edges of sleeves and the sarong. On 1 January 1993, the colours of the batik were enhanced to complement the colour of the new uniform. The male flight attendants wear grey colour jackets.[68]

The history of the airline started in 1937, when Malayan Airways Limited was registered as a company. Flying operations started in 1947, with the aircraft bearing the symbol of a winged tiger. In 1963, the airline was renamed Malaysian Airways Limited, when the Federation of Malaysia was formed. Subsequently, Borneo Airways Limited was absorbed by Malaysian Airways Limited. In 1965, with the political separation of Singapore from Malaysia, there was continued participation by the governments of Malaysia and Singapore in the airline. In 1967, the company changed its name to Malaysia-Singapore Airline Limited (MSA), which was the joint national air carrier for both countries, and a new logo was introduced.

In 1971, Malaysia-Singapore Airline Limited was separated into two airlines, each with its own policies and objectives, leading to the birth of Malaysia's flag carrier, Malaysian Airline System (MAS), on 3 April 1971. The name was chosen because, in abbreviated form, MAS (as in EMAS) in Malay means gold, to symbolise quality service. A corporate logo based on the wau bulan (moon kite) was eventually adopted in the following years.

A Malaysia Airlines Boeing 777-200ER at Hong Kong International Airport

A new corporate logo designed by Dato' Johan Ariff was introduced on 15 October 1987, retaining the essence of the moon kite, with a sheared swept-back look.[69] Along with the new corporate logo, a new type style - MALAYSIA, was created. It is italicised to slant parallel with the logo to accentuate speed as well as direction. Within this corporate typestyle, the letters MAS bear red clippings to denote the initials of the statutory name of the airline, Malaysian Airline System (MAS), and were added after the original design was rejected by former Prime Minister Mahathir Mohammad. The introduction of blue to the original red logo has national significance. The red and blue divides equally in the middle to denote equilibrium.

On 8 March 2012, Malaysia Airlines unveiled a new logo featuring an all-blue moon kite and livery for its Airbus A380 fleet. Months later, the corporate logo of red and blue wau was refreshed. The new moon kite logo faces from left to right, as it did in the original 1971 logo, and its tails have been extended. The wordmark has also been modernised with a new typeface and the word "airlines" is now presented in lowercase.[70]

Alliance

In August 2011, Malaysia Airlines agreed to collaborate with AirAsia through a share swap. The share swap between Malaysia Airlines' major shareholder and that of AirAsia was later undone in May 2012 due to resistance from certain quarters of its staff.[71]

On 1 February 2013, Malaysia Airlines became a member of the oneworld airline alliance, whose members include Air Berlin, American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan Airlines, LAN Airlines, Qantas, Qatar Airways, Royal Jordanian, S7 Airlines, TAM Airlines and SriLankan Airlines.

MHbuddy social networking service

In 2011 Malaysia Airlines introduced a social seating plan that allows passengers to pick seatmates before their flight. The plan lets passengers share their social network profiles and photos with other passengers on the same flight. [72]

Destinations

Further information: Malaysia Airlines destinations
A Malaysia Airlines Boeing 737-800 at Guangzhou Baiyun International Airport, with the aircraft carrying the current livery.

Before the introduction of the Business Turnaround Plan, Malaysia Airlines operated 118 domestic routes within Malaysia and 114 international routes across six continents.[19] Malaysia Airlines now flies to 55 destinations across Southeast Asia, North and South Asia, the Middle East, Australia and Europe. Its primary hub is in Kuala Lumpur. It has a particularly strong presence in the Southeast Asia region, which, together with its subsidiary MASWings and Firefly, connects Kuala Lumpur to the most destinations in Borneo Island. Apart from that, the airline has a key role in the Kangaroo Route, on which the airline provides onward connecting flights from main European gateways to major Australian and New Zealand gateways via Kuala Lumpur International Airport, within 5 hours. After the turnaround plan, Malaysia Airlines has 424 flights daily departed and arrived in its hub Kuala Lumpur International Airport.

Under the Business Turnaround Plan, numerous routes were axed and frequencies reduced. As of September 2007, Malaysia Airlines flies to 88 destinations. In co-operation with code-share partner airlines, the airline serves more than one hundred destinations worldwide. It was the first airline in Southeast Asia to fly to South Africa, following the demise of apartheid, and the only airline in Southeast Asia that served South America via South Africa until 2012. In 2006, it suspended its routes to Manchester, Vienna, Fukuoka, Chengdu, Nagoya, Xi'an, Cairo, Kolkata, Ahmedabad and Zürich under its Business Turnaround Plan. Before the MH17 and MH370's crashes, it suspended services to Cape Town, Rome, Dammam, Karachi, Surabaya, Johannesburg and Los Angeles.[60][73]

Malaysia Airlines also owns its own charter flight division. Malaysia Airlines' charter flights have flown to destinations around the world, such as Guilin, which was previously one of Malaysia Airlines' scheduled destinations, and Christmas Island. Malaysia Airlines has also been the official airline for the Manchester United Asian Tour[74] It also has a substantial Hajj operation.

Malaysia Airlines applied for approval to launch three weekly Kota Kinabalu – Tokyo Haneda service with Boeing 737-800, effective 15 November 2010. After receiving regulatory approval, Malaysia Airlines adjusted its Tokyo operations. All Kuala Lumpur – Tokyo traffic departed and arrived in Narita, and Kota Kinabalu – Tokyo traffic operated from/to Haneda. The airline ended operations at Tokyo Haneda Airport on 1 February 2012.[75]

Codeshare agreements

Malaysia Airlines codeshares with the following airlines:[76]

Fleet

Further information: Malaysia Airlines fleet

As of April 2016, Malaysia Airlines has 76 active aircraft in its fleet with a further 20 in storage.[78] Of these 76 aircraft, 54 are from Boeing and 22 from Airbus Industries.[78]

Airbus A330-300 used primarily for medium-long haul routes.
Airbus A380 at Kuala Lumpur International Airport, the flagship carrier of the airline.
Boeing 737-800 the regional workhorse fleet.

Services

The Airbus A380 fleet has a three-cabin configuration, also including first class. The Airbus A330-300, and Boeing 737-800 aircraft have a two-cabin configuration. All Airbus A380-800, Airbus A330-300, and Boeing 737-800 fleets have new cabin seats and in-flight entertainment.

Airport lounge

Malaysia Airlines' Golden Lounge at Kuala Lumpur International Airport

The Golden Lounge is the airport lounge for Malaysia Airlines First Class, Business Class passengers and Enrich Platinum and Enrich Gold, eligible oneworld and code-share partner members. The Golden Lounges have open bars and food catering. There are Golden Lounges throughout the world, and qualified passengers have full reciprocal privileges at lounges operated by selected partners. The lounge offers various services such as business centres, food catering, slumber rooms and child-care centres.[79]

Lounges are maintained at the following airports:

In April 2008, the airline launched its new Regional Golden Lounge at the KL International Airport (KLIA) for regional-bound front-end passengers.

With this new lounge, Malaysia Airlines at Kuala Lumpur International Airport now has three lounges: the Satellite International Terminal Lounge, Domestic Lounge and Regional Lounge.

Cabin

Malaysia Airlines flight attendant

The airline received the "World Best Cabin Crew" award by Skytrax in 2012, bringing home the international accolade 8 times since 2001. All of Malaysia Airlines' aircraft have an economy and a business class section. First class is only present on Airbus A380 aircraft. [82]

First class

First class is offered only on the Airbus A380 on routes to London Heathrow. Malaysia Airlines offers the widest fully flat first class seats in the world on its A380 aircraft. The A380s feature eight semi-enclosed suites with a 23-inch flat-screen television.[83]

First Class is also introduced to 1 Boeing 747-400 that replace the Airbus A380 for a while.

Business class

Business class (previously known as Golden Club Class) is available on all of Malaysia Airlines' fleet. In 2011, Malaysia Airlines introduced the new business class seats on their brand new Airbus A330-300. While newer regional business class seats were also introduced on the Boeing 737-800 to be used on short-medium haul routes such as Kota Kinabalu, Taipei and Manila.[84] Seats made by Recaro within the business class cabin of new A330-300 are configured in pairs (2-2-2) layout, fitted with in-seat power and USB port, as well as new Select 3000i on a 15.4 inches touch screen panel, while the Boeing 737-800 are fitted in pairs (2-2) inclusive of the new Select 3000i and have recline ability. The first Airbus A330-300 carrying the new Regional Business Class was assigned to Kuala Lumpur - Brisbane sector on 20 April 2011.[85] Starting April 2015, Malaysia Airlines will introduce new Business Class seats provided by Thompson Aero Seating equipped with fully lie-flat seats for their A330 fleet.[86] This will be in an staggered layout with alternate rows in the 1-2-2 and 1-2-1 configuration.

Economy class

Economy class is available on all of Malaysia Airlines' fleet. Seats feature a pitch of 33-34 inches and width of 17-17.25 inches, while the newer fleets such as the Airbus A380, Airbus A330-300 and Boeing 737-800 feature seat pitch of 30-32 inches and width of 17-17.5 inches. The leased 737-800 has no personal TV but overhead TV's located in the aisles of the plane and feature a seat pitch of 29-30 inches. The new A330-300 as well as the new 737-800 all have the new Select 3000i. In 2010, economy class was voted the World's Best Economy Class at the 2010 World Airline Awards by Skytrax.[87]

'Baby ban' and 'child-free zone'

Malaysia Airlines has attracted both criticism and praise for its controversial decision to prohibit children from travelling in certain classes or cabins of its aircraft.

Infants are not permitted in First Class on Malaysia Airlines Airbus A380 due to the non-availability of baby bassinets in the cabin.[88] Malaysia Airlines Managing Director and CEO Tengku Azmil explained the policy in a Twitter post, saying the airline received complaints from first class passengers that they "spend money on 1st class and can't sleep due to crying infants".[89]

MAS subsequently claimed that an upgrade of the first class cabin to fit new seats and an ottoman (which doubles as a visitor seat) meant "there was no facility for positioning bassinets in the First Class of the 747s."[90] Malaysia Airlines has also stated that children under the age of 12 may not travel in the 70-seat upper deck economy section of the A380. "The economy seats on upper level will be allocated for business travellers. Passengers accompanying children under 12 years old age will be excluded from booking these seats."[91]

MAS says the decision "is to showcase the economy class zone in the main deck, enhanced and designated as a family and children friendly inflight zone. From the perspective of customers travelling with their families, the economy class family-friendly convenience would be a warm welcome. The main deck has more facilities such as toilets (8 for economy configuration of 350 seats) and the dual aerobridge airport facility supporting this deck will also mean a speedier/faster embarkation and disembarkation for this group of passengers."[92]

In-flight entertainment

Select is the in-flight entertainment system of Malaysia Airlines. There are three types of Select: Select 3000i, Select 3000i Portable Media Player and Select Mainscreen.

Select 3000i

All Malaysia Airlines Airbus A380, Airbus A330-300(NEW), Boeing 737-800 and 777-200ER aircraft are equipped with an Inflight entertainment system, Select 3000i with audio and video in 14 languages. A touch-screen personal TV is available on board Airbus A380, Airbus A330-300(NEW), Boeing 737-800 and First Class and Business Class on Boeing 777-200ER aircraft.
New deliveries of Airbus A330-300(NEW) and Boeing 737-800 (MX,MS) aircraft would carry touch-screen based Select 3000i.
Select 3000i Portable Media Player
Select 3000i Portable Media Player
The Select 3000i Portable Media Player is provided to Malaysia Airlines' Business Class passengers on selected regional and semi-long-haul Boeing 737-800 (ML) aircraft on North and South Asia routes. It allows passengers a choice of movies, TV shows, sports and video games.[93]

Select Mainscreen

Used in economy class on Boeing 737-800 (ML) regional and semi-long-haul aircraft, which features 15-inch dropdown retractable LCD screens are installed at every 4th seat row in the economy class zone of the aircraft.

In-flight magazine

Malaysia Airlines' in-flight magazine is named Going Places.[94] It is published by Spafax.[95] There is also an online version.[96]

Frequent-flyer programs

Malaysia Airlines' frequent flyer programme is called Enrich by Malaysia Airlines. Enrich comprises a variety of airlines, banks, credit-card issuers, hotels and retailers around the world.

Esteemed Traveller

Logo for the Enrich programme.

On 30 September 1987, Malaysian Airline System introduced the Esteemed Traveller frequent-flyer program. In the early 1990s, Malaysia Airlines, Cathay Pacific, Thai Airways International and Singapore Airlines launched their joint Asian frequent-flyer program: Passages. The joint program was officially dissolved in 1999, and the Enrich frequent-flyer program made its debut after the split from Passages.

Enrich by Malaysia Airlines

On 12 July 2006, Malaysia Airlines introduced its enhanced frequent-flyer program. The program is now known as Enrich by Malaysia Airlines (Enrich).[97]

Partners

Members of Enrich are able to accrue miles on qualifying flights through Malaysia Airlines and Enrich airline partners:[98]

Non-airline partners[99][100] include:

Incidents and accidents

See also

References

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