The most urgent task for Malaysia Airlines' (MAS) newly-appointed chief would be to position and brand the national carrier ahead of economic recovery, say analysts.
Datuk Tengku Azmil Zahruddin, previously the chief financial officer, took over as MAS' managing director and chief executive officer from Datuk Seri Idris Jala on August 28.
"With economic recovery possibly happening by the end of the year, passengers will be less concerned about the few dollars' difference in fares. MAS should position itself to take advantage of that. In the long run, the current low-fare scheme won't work," Maybank Investment Bank Bhd senior analyst Khair Mirza told Business Times.
He said that the last thing MAS needed was to price itself so low that it diluted the airline's premium-service products.
"What MAS must now ask itself is, what exactly it needs to do. It has cut all that it can cut - costs, size, network. The question is, as part of its fleet renewal plan, will it come up with something that meets the needs of the more price-sensitive consumers?"
Should MAS decide to come up with a new low-fare scheme for the long term, it should focus on giving exactly what a normal low-cost carrier (LCC) would give rather than the extra trappings it boasts of currently, Khair said.
"Azmil saying that he will continue with the existing plan is his way of not rocking the boat. I'm sure he will have new ideas worked out, and one of them should be what role (MAS' wholly-owned subsidiary) Firefly can play in the greater scheme of things. In a way, this is Firefly's opportunity to rise," he added.
Khair voiced hopes that Tengku Azmil would continue to ensure MAS was well represented in the formulation of government policies, adding his view that Idris had done a good job in this respect.
During Idris' tenure, MAS evolved into a new breed of hybrid carrier blending traditional full-service carrier traits with those of the LCCs.
During a press briefing in June last year, Idris had likened MAS' business model to a cross between full-fledged full-service airlines like Cathay Pacific Airways and Singapore Airlines and LCCs like AirAsia.
Standard & Poor's Asian Equity Research analyst Shukor Yusof said that as more and more airlines consolidate, MAS would have to decide where it wanted to position itself in the industry.
"There has been a wave of consolidation, as you can see in the likes of Japan Airlines. With the latest round of airline consolidation, where does MAS see itself being positioned?" Shukor questioned.
So far, rather than join any of the global airline alliances such as OneWorld and Skyteam, MAS has chosen to grow its network through code-share deals with other airlines.
"Would MAS be looking to join an alliance? This remains a key aspect of the business which needs to be addressed quickly," Shukor said.
Source : Business Times
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