Malaysian Airline System

From a sm essencely air attend to that began with a 5-seater twin engined Airspeed Consul in 1947, Malaysia air ducts has gravid into an award-winning air hose with a run of more(prenominal)(prenominal) than 100 aircraft, inspection and repair more than 110 destinations across six continents. Today, Malaysian Airlines System Berhad is a corporation with a vision of world(a) magnification. The respiratory tracts network will assume extensively in response to consumer demand for worldwide coverage. The air ducts enhanced in-flight go, authorized ground support and excellent infrastructure will set saucily world standards.Company History Malaysian Airlines System Berhad is the holding political party for Malaysias campaign airline crew cut, one of Asias fastest growing airlines. Through salwaysal(prenominal) another(prenominal) subsidiaries, the company manufactures aircraft parts, offers trucking and cargo tran free reination services, caters food, provides laundry and dry-cleaning services for airlines and other industrial institutions, and oversees a travel agency.Company Chairman Tajudin Ramli admits a significant share in Malaysian Airlines System (MAS), and the Malaysian organization retains a strong voice in MAS affairs. 930s Origins The history of Malaysian Airlines dates mainstay to 1937, when the Straits Steamship Co. of Singapore joined forces with two British companies maritime Steamship Co. and Imperial Airwaysand won approval from Singapores administration to operate an airline in the region. Malayan Airways Limited was registered on October 21, 1937. Getting clearance and get planes in the air, however, proved to be two different things for Malayan Airways Ltd. trading operations did not begin until 1947, easily after the Japanese occupation had neck to an end, when a twin-engined Airspeed Consul lifted off from Subang internationalist Airport in Kuala Lumpur, linking that metropolis with Singapore, Ipoh, and Penang in t he north of the country. In 1947 the fledgling airline added a 21-seater DC-3 to its authorise of iii Airspeed Consuls. By the end of the family the airline was flying to capital of Indonesia (then called Batavia), Palembang, Bangkok, Medan, and Saigon (later called Ho Chi Minh City).Jointly controlled by the intercontinental carriers BOAC and Qantas, Malayan Airways as for a time run by Keith Hamilton, who would later become full stop of Qantas. 1960s Independence Following Malaysias political establishment in family 1963the impertinently country comprised the former states of Malaya and Singapore, and the one-time colonies of North Borneo, Sabah, and SarawakMalayan Airways became Malaysian Airways and was shake up to focus on connecting the new countrys disparate regions. Expansion brought more aircraft into the fleet after Borneo Airways was purchased and folded into Malaysian Airways in 1965.This brought four Dakota jets and two Scottish strain Twin Pioneer aircraft to th e carriers stable of aircraft. More organizational changes for the airline occurred in 1966, a family after Singapore seceded from Malaysia to become a sovereign state on its own. That year, the governments of Singapore and Malaysia jointly bought a controlling refer group in the airline and renamed it Malaysia-Singapore Airlines Ltd. (MSA). Powerful Boeing jets then entered the fleet and enabled flights to reach a number of far-flung Asian destinations. However, differences amongst Kuala Lumpur and Singapore over the futurity direction of MSA prompted a split in 1972.Lee Kuan Yew, prime looking for of Singapore, desired a truly national carrier for his country, the aim universe to fly a small fleet of Boeing 707s displaying the yellow and blue colorize of Singapore Airlines. Malaysia likewise chose to go its own way. In October 1972, Malaysian Airline Systems (MAS) was open. (The acronym MAS means gold in the Malaysian language. ) Each of its aircraft would hence away sp ort a winged tiger logo, a stylized form of the traditional Kelantan wau or Malaysian kite. The split was crucial to the future fortunes of MAS.From 1972, the airline go on to see itself as a regional carrier, connecting a myriad of unlike destinations in Peninsular Malaysia, including Sabah and Sarawak. Singapore Airlines, on the other hand, was committed from its introduction to becoming an international success. By 1975, Singapore Airlines was flying to Seoul, Hong Kong, and Taipei. A year later, that airline was wearing riders to Paris, Dubai, and New Zealand. Unlike Singapore, Malaysia looked to focus on exploiting its vast reserves of natural re starting timespetroleum and petroleum products, natural gas, timber products, and rubber.The countrys government would occupy much later than Singapore had to attempt competing with Western companies in manufacturing and advanced markets. Thus, maintaining a successful regional airline carrier was judged the best schema for Mal aysia during the 1970s. The company slowly built up its regional services to capital of Indonesia and Medan in Indonesia. Later the destinations of Bangkok, Hong Kong, Manila, and Singapore were added. Malaysia mat that MAS was not serving the of necessity of Malaysians, explained Abdullah Mat Zaid, director of corporate planning at MAS.Expanding as a regional airline was not without incident for MAS. In 1978, the companys low-wage policy met with a set post. Kuala Lumpur had set out rules limiting union activity at the national air carrier as a means of keeping reinforcement and costs down, and a bitter and disruptive labor dispute occurred in 1978. Events surrounding a strike at the national airline prompted the government to intervene and cite MAS workers as being engaged in mislabeled activity. Several union officials were subsequently arrested.Growth in the 1980s90sAn scotch boom in Malaysia during the 1980s functioned spur growth at Malaysian Airlines. By the end of the d ecade, MAS was flying to 47 overseas destinations. These included octonary-spot European cities London, Zurich, Paris, Frankfurt, Istanbul, Vienna, Amsterdam, and Brussels. MAS in any case flew at this time to six Australian citiesBrisbane, Adelaide, Darwin, Perth, Melbourne, and Sydney&mdash well as to Auckland, New Zealand. Besides flights to such Asian hubs as Hong Kong, Tokyo, and Peking, MAS in like manner connected with Los Angeles and Honolulu.By 1992, MAS had added scheduled flights to Athens, Madrid, and Rome, and plans were in motion to reach at least one destination in Eastern Europe. Moreover, a new service to South Africa and Brazil was scheduled for 1993. The airline would also look to reach one city on the eastern seaboard of the unite States. MAS also chose during the early 1990s to expand by teaming up with other airlines to make additional destinations available for its customers. For example, Iran Air connected Kuala Lumpur with Tehran, and Royal Jordanian co nnected MAS flights with Amman.In addition, joint services to Chile and Argentina were discussed in late 1991. The impetus for this expansion came from Malaysias burgeoning economy. Between 1986 and 1991, the countrys export-oriented economy posted an clean real growth of nine partage. Changes to Malaysias abroad investment rules during the mid-1980s were designed to help speed a shift from an economy previously dependent on natural resources to a finely tuned industrialized economy. At the same time, a number of swelled Asian and Western corporations such as Sanyo, NEC, Toshiba, and Philips established branch plants in Malaysia.The extra traffic of company officials flying back and forth from their headquarters to Malaysia, and the transportation of their high-tech goods, spurred on ticket sales for the airline. The number of business passengers MAS accommodated was underscored by gross foreign investments in Malaysia that come upbush 30 percent in 1991 to M$10. 7 meg ($5 billion). The 1980s90s Tourist Trade As the countrys export trade thundered frontwards in the late 1980s, so did the domestic passenger traffic in and out of Malaysia, and naturally tourism also provided a springboard to expansion for MAS.By the late 1980s Malaysia began to go after the prized Western tourist, a market already well exploited by neighboring Thailand and the Philippines. to the highest degree 5. 5 gazillion travelers visited Malaysia in 1991. Although the country, and its airline, were hit by the effects of the disconnectedness War and global recessionary conditions, tourism contributed M$5 billionor $2. 4 billion&mdasho the countrys trade balance in 1991. The great deal of these tourists came from neighboring Brunei, Indonesia, the Philippines, Singapore, and Thailand.Kuala Lumpurs plans to build a number of luxury golf courses in the country were expect to help secure growing numbers of Japanese tourists. Getting into the package tour business also helped MAS e ncourage change magnitude passenger traffic. Malaysia Airlines Golden Holiday packages and Malaysia Stopover packages were established in 1984. These promote European and Australian travelers in transit between the two continents to memorize a rest break in Malaysia forwards carrying on to their final exam destination. To further stimulate tourism, a joint campaign was run by the Malaysian government and MAS to declare 1990 Visit Malaysia Year.During the year, some 7. 4 million tourists flew into and out of the country, as compared with the 4. 8 million tourists who visited Malaysia in the previous year. some other source of new traffic for the airline was the growing number of foreign students att final stage educational institutions in Malaysia. In September 1989 the International schooling of Kuala Lumpur registered 700 students a year later, the school had doubled its enrollment. By the same token, one-year-old Malaysians were studying in Europe and North America.In Canada , where many Malaysian students attended universities, it was felt in early 1992 that this new traffic source business leader warrant regular service between the two countries. Canadas own national airline, Air Canada, which was suffering from economic recession and increasing global aspiration, was slow to grant Malaysian Airlines landing rights. The Canadian government felt that allowing MAS to land in Vancouver would encroach on territory commanded by Canadian Airlines International Ltd. , while Toronto International Airport was considered the preserve of Air Canada.Malaysias case at the time was not helped by Ottawa having a year earlier announced the cancellation of Singapore Airlines landing rights in Toronto. Even so, Kuala Lumpur officials well-grounded that Canada was out-of-step in trying to protect its national airline carriers. The global airline industry as a whole was going the opposite way, towards increase deregulation and competitiveness. Malaysia was prepared to wait for Canada to accept its growing economic might and grant reciprocal landing rights. Intercontinental traffic for the airline was boost by the purchase of Boeing 747 wide-body jets.By 1991, the airline had four of them, and three more were added a year later with an average of two more due for delivery each year until 1995. In 1992, a change labor supply in Malaysia, in part the result of its increasingly prosperous economy, was cited by international corporations as the prime obstacle standing(a) in the way of future expansion plans. Manpower shortages were eespecial(a)ly dandy at the middle management and technical levels. All of these circumstances would strike on MASs passenger and cargo traffic figures as the countrys economy locomote from the farm to the factory and beyond.Amid this backdrop, the Malaysian government in 1992 forecast that passenger traffic on the countrys combined airwaysinternational and regionalwould grow by ten percent annually in the five years before 1997. International freight volume in the same period was expected to rise by 13 percent annually. Officials in Kuala Lumpur announced in 1992 that they had plans to build a new international airport in Sapang, adding that all other airports in the country were expected to cope with the increased passenger demand of the 1990s without the need for expansion.Government forecasts in 1992 pointed to 9. 5 million passengers to be carried by MAS that year, a figure expected to jump to some 15 million by 1995. Cargo was also identified as an expanding source of revenue for the airline in the 1990s. In recognition of this potential, MAS in 1992 introduced MASkargo in order to begin providing a full cargo service to the United States and Europe. A DC-10-30 jet was fitted to carry up to 60 wads of cargo per flight. Further plans were announced to purchase an additional Boeing 747-400 freighter to carry 45 tons of extra cargo per flight.In 1992 MASkargo also candid a fully automated cargo handling center in Penang. The new facility complemented the expanded MAS Cargo Center at Subang Airport, which provided semi-automated and computerized facilities including elevating dispatch vehicles and electronic scissor lifts fitted with computerized scales. Expansion at the cargo center brought MASkargos total warehouse storage space to 150,000 square meters.The ambitious expansion plans taxed the carriers profits, which were roughly halved, from M$206 to M$ great hundred, between 1991 and 1992. Turnover increased 23 percent in 1992, however, reaching M$3. billion. Correspondingly, employment at MAS rose from 17,575 workers in 1992 to 20,370 in 1993. Demand for flight crews was so great that the carrier promise for 35 percent of these positions with overseas personnel, mostly Australian. Fifteen hundred of the employees worked in the airlines unique flight kitchen, which served 22 airlines. All 17,000 meals a day were hallal, that is, law-abiding Muslim dietary restr ictions that prohibited pork. During this time, MAS hired Star Wars producer George Lucass special effects unit to create a stunning sci-fi television commercial.The spot, which impractical around the world, was commissioned to present MAS as a modern, world-class airline and featured a huge kite-shaped space station. The cost was estimated at between $2 and $4 million dollars. In 1993, MAS bought a 24. 9 percent interest in U. S. charter operator World Airways. The company also leased five of its MD-11 aircraft. Operations personnel, in high demand at MAS, were also made available. 1994 Ramli Buys a Stake in the Airline In 1994 Malaysian entrepreneur Tajudin Ramli bought a 32 percent controlling interest for M$2 billion ($745 million) worth of stock.The government retained an 11 percent interest. Tajudin, who had earlier put together a mini-aviation empire in preparation of competing with MAS, was saddled with an overlarge fleet and diminishing profits. Although sales rose to $M4. 1 billion ($1. 6 billion) in the fiscal year ending March 3, 1994, profits fell from M$145. 4 million ($56. 4 million) to M$7. 7 million ($2. 9 million). The carrier was still receiving large shipments of new aircraft, including Boeing 747s, and sales of its used aircraft were slow. Some of MASs new A330 aircraft were delivered late, resulting in punishment payments from Airbus. )Tajudin immediately set out to trim the fat. He introduced a more businesslike attitude and required better reporting from the companys managers. Aircraft utilization was increased. The carrier signed code-share agreements on transpacific routes and promoted its Kuala-Lumpur-Los Angeles route to attract more business passengers. vestal Atlantic Airways teamed with MAS in 1995 to operate joint London-Kuala Lumpur flights. The service proved cheery for Virgins Australia-bound passengers.Planes stayed just as full after the number of flights was increased from eight to 14 a week, although the two carriers f aced very formidable competition from the British Airways/Qantas alliance, which operated the only single-plane service between London and Australia. MAS recorded its highest ever pretax profit in 199697 of M$349. 4 million ($120 million). The company continued to buy new planes and relocated to Kuala Lumpurs new Sepang International Airport, a move expected to further enhance its reputation. However, the new airports first step was plagued with lost baggage, computer malfunctions, and other annoyances.Depreciating Malaysian currency brought MAS debt up to M$12 billion by 1998. Debt servicing helped MAS lose M$260 million ($62 million) in 199798. In response, the carrier deferred new aircraft purchases, change old planes, and slashed underperforming routes. A new restructuring plan put forth by Tajudin, whose hands were tied by the government when it came to cutting jobs, was rejected on the grounds it would rescue Tajudin at the expense of minority shareholders. foreign airlines with an eye towards global expansion (such as Thai Airways and British Airways) seemed evoke in investing in the troubled carrier, however.