Thursday, December 07, 2006

MAS Comprehensive Fare Revision by Jan 19

MAS goes for more flexible fare pricing

PETALING JAYA: Malaysia Airlines (MAS) will adopt a more flexible pricing structure after Jan 19, allowing it adjust daily or weekly the airfares for more than 100 routes to match those of its rivals.

The airline had begun a comprehensive review in conjunction with its seasonal fare revision and this would be completed by Jan 19, managing director Idris Jala told a media briefing yesterday.

He said the price of some tickets might go up while others might fall after the review.
“We do not want to out-price ourselves but want to (remain) competitive,'' he added.

Since Jala took the helm over a year ago, the airline has undergone changes in many areas. Fare pricing is his next big project, given the need to realign MAS' fares so that it can maximise revenue on all the routes it operates.

“Over the past nine months, we have gradually shifted to more sophisticated pricing and you will see us really improving our yields,’’ Jala said.

This is despite the fact that some travellers feel that the MAS fares are high compared with those of other carriers on certain routes.

“Depending on which of the 2.5 million fare permutations is being compared, the conclusion can be that MAS fares are cheaper or more expensive. It is thus highly inappropriate to conduct simplistic benchmark comparisons without looking at the complex variables like fare categories, ticket restrictions, and so on,’’ MAS said in a statement released at the briefing.

Jala said with the airline working towards a new fare structure, MAS could expect to achieve about 90% accuracy in its seat sales forecast over the next 1½ years.

On whether there would be a reduction in fuel surcharge, Jala said a decision would be announced on Jan 19 as part of the fare review.

As the new fare structure can only be effective if there is a new reservation system, the airline is investing RM200mil over a five-year period to overhaul its computer system to facilitate electronic ticketing (e-ticketing).

The first phase would be implemented by February 2007 to allow for instantaneous fare amendments, cost reduction and efficiency improvement. The airline's current reservation system is grossly outdated.

E-ticketing, which would be fully implemented by the end of next year, would help the airline save RM19 on each ticket sold. The shift towards online ticketing would also help it save on commissions and free up employees to focus on other areas of the airline's operations.

Currently, MAS is recording 1.2 million online hits a month, far exceeding the 17,000 monthly hits registered in 2003.

MAS recently reported a net profit of RM240mil for the third quarter ended Sept 30, a turn around after five consecutive quarters of losses. Jala said he was confident the airline would beat its own forecast for next year but did not elaborate.

MAS shares closed unchanged at RM4.56 yesterday.

Source : STAR
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