Saturday, November 01, 2008

Changes at Malaysian Airline

Malaysia’s national carrier plans to cut its capacity further and make some changes at senior management level as the global financial crisis bites deeper into economies, resulting in slowing demand for air travel.

StarBiz has learnt that Datuk Bernard Francis is taking over the sales and marketing portfolio to give MAS a stronger push in sales since demand for air travel is slowing down.

Bernard takes on the role as senior general manager, sales and marketing, for domestic, Asean and global operations effective today.

His last post, that of senior general manager of network and revenue management, will be taken over by Dr Mohd Amin Mohd Yassin Khan, who was managing director of MASWings Sdn Bhd.

Datuk Seri Idris Jala (left) and Bernard Francis at the MAS All-Inclusive Low Fares launch recently.

Mohd Salleh Ahmad Tabrani will take over as head of MASWings.

Yesterday, the Centre for Asia Pacific Aviation warned that no airline in Asia would make profit next year as Asian airlines were headed for the worst year ever.

“Demand has fallen off very fast,” Peter Harbison, the managing director of the centre, was reported as saying. “This is a global problem and it’s not going to be resolved in three months. It’s going to be here for a year or maybe two.’’

The International Air Transport Association (IATA) said September passenger volumes had suffered an “alarming drop,’’ falling by 2.9% compared with the same month in 2007, a decline not been since the SARS outbreak in 2003.

The IATA, which has 230 member carriers, has predicted airlines to lose more than US$5.2bil.

This year nearly 30 airlines have already failed and British Airways boss Willie Walsh predicts the ‘‘onset of the global recession will drive another 30 out of business before the economy bottoms out.’’

Yesterday, MAS chief Idris Jala told Bloomberg in an interview in Singapore that MAS might cut capacity further if demand continued to fall.

In June, the national airline had announced capacity cuts of 6%.

“If things get really bad, we will review capacity one more time,’’ Jala said, adding “if there is no demand, obviously we will have to cut capacity.’’

It is understood that since last month MAS had cut its daily flights to Los Angeles to three times weekly.

It has also cut weekly flights for its KL-Stockholm-New York route to two flights from three.

There are ongoing cuts on MAS’ European flights and a review for its London day flights is still on.

MAS currently flies to 100 destinations and has 25 code share partners globally.

Despite slowing demand for air travel, MAS is still on schedule to take delivery of 35 B737 aircraft from September 2010 and six Airbus A380 from 2011.

MAS in August said it was still targeting RM400mil to RM500mil profit this year.

But MAS executive director and chief financial officer Tengku Azmil Zahruddin in a Bloomberg report yesterday, warned that “in the next couple of years it will be quite difficult to pay any sort of dividend.’’

The company in May announced a dividend of 2.5 sen a share, the first since 2005.

Some people in MAS see the changes as efforts intended to strengthen the team with air travel demand weakening due to the credit crisis.

MAS recently kicked-off an “all inclusive” airfare campaign, offering deeper discounts and undercutting low cost carriers on select routes to boost seat sales.

While these changes may be needed, the question looming in the industry is whether Jala has inked an extension to this contract with the national carrier although earlier reports said he was set to stay on for the next three years.

His present contract expires in a month.

In an e-mail response to a StarBiz query, MAS yesterday said “Jala was still in discussions with Khazanah Nasional Bhd (MAS’ parent) and any announcement will be made towards the end of this month.’’

Source : Star
[tags : ]

No comments:




Related Posts with Thumbnails