MALAYSIA AIRLINES

Malaysia Airlines
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Malaysia Airlines (MAS)Penerbangan Malaysia

IATAMH
ICAOMAS
CallsignMALAYSIAN
Founded
1947 (as Malayan Airways)
Hubs
Kota Kinabalu International Airport
Kuala Lumpur International Airport
Kuching International Airport
Penang International Airport
Frequent flyer program
Enrich and Grads
Member lounge
Golden Lounge
Subsidiaries
Firefly
MASwings
MASkargo
Fleet size
85 (+41 orders, 20 options)
Destinations
85 (included Maswings)
Company slogan
Going Beyond Expectations, "MH" is more than just an airline code; it is Malaysian Hospitality
Parent company
Penerbangan Malaysia Berhad (Government Holding Company)
Headquarters
Subang, Selangor, Malaysia
Key people
Azmil Zahruddin (Managing Director & CEO)
Website
www.malaysiaairlines.com
Malaysia Airlines (MAS) (Malay: Sistem Penerbangan Malaysia; Chinese: 马来西亚航空公司; MYX: 3786) is the government-owned flag carrier airline of Malaysia. Malaysia Airlines operates flights from its home base, Kuala Lumpur International Airport, and its secondary hub in Kota Kinabalu. It has its headquarters on the grounds of Sultan Abdul Aziz Shah International Airport in Subang, Selangor.[1]
Despite a financial restructuring exercise in 2006, Malaysia Airlines maintains a strong presence in Southeast Asia, East Asia, South Asia, Middle East and on the Kangaroo Route between Europe and Australasia. Malaysia Airlines also operated transatlantic flights from Kuala Lumpur to Newark, via Stockholm until October 2009. It operates transpacific flights from Kuala Lumpur to Los Angeles, via Taipei. In 1997, the airline flew the world's longest non-commercial, non-stop flight from Boeing Field in Seattle to Kuala Lumpur, flying eastward passing the European and African continents and breaking the Great Circle Distance Without Landing record for an airliner on a Boeing 777-200ER longer than the record held by the Boeing 777-200LR.[2]
Malaysia Airlines non-aeronautical revenue sources include maintenance, repair and overhaul (MRO),[3] and aircraft handling. Malaysia Airlines has two airline subsidiaries: Firefly and MASwings. Firefly operates scheduled flights from its home base Penang International Airport which focus on tertiary cities, while 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. MASCharter is another subsidiary of Malaysia Airlines, operating charter flights using Malaysia Airlines' aircraft. After recovering from past losses, Malaysia Airlines is keen on merger and acquisition (M&A) activities: particularly airlines in the Asia Pacific region.[4] Malaysia Airlines was ranked second with score 88 in Aviation Week's Top Performing Companies which accurately measures financial viability of an airline.[5]
Since its inception in 1963, after Malayan Airways was separated into two parts, Malaysia Airlines has built up a strong brand name in the aviation industry for service and safety [6], coupled with numerous awards from international bodies such as Skytrax.[7]. Malaysia Airlines is accredited by International Air Transport Association with IOSA (IATA Operational Safety Audit) for its operational safety practices.[8]
It is one of only six airlines to be given a 5-star status airline by Skytrax (the other 5 are Asiana Airlines from South Korea, Cathay Pacific from Hong Kong, Qatar Airways from Qatar, Singapore Airlines from Singapore and Kingfisher Airlines from India). Malaysia Airlines is also listed among Skytrax's Quality Approved Airlines, alongside fellow 5-star carriers Asiana Airlines, Kingfisher Airlines and Qatar Airways
Contents[hide]
1 History
1.1 Malayan Aviation History
1.2 Beginnings
1.3 Incorporation
1.4 Expansion
1.5 First Unprofitability
1.6 Second unprofitability
1.7 Recovery from unprofitability
1.8 Everyday Low Fares
2 Corporate information
2.1 Subsidiaries
2.2 Financial Highlights
3 Branding
3.1 Corporate image
3.2 Corporate logo
4 Destinations
5 Travelling with Malaysia Airlines
5.1 Ground Service
5.2 Airport Lounge
5.3 Cabin
5.3.1 First Class
5.3.2 Golden Club Class
5.3.3 Economy Class
5.4 In-flight entertainment
6 Fleet
7 Frequent flyer programs
7.1 Enrich by Malaysia Airlines
7.2 Grads
8 Partnerships and Code Share Agreements
9 Historical flights
9.1 Accidents and incidents
10 References
11 External links
//
[edit] History
Malaysia Airlines started its operation on 1987 after the airline changed its name from Malaysian Airline System. It is founded in 1947 by Malayan Airways. Then, it transformed to Malaysian Airways due to Malaysia gaining its independence. After that, it changes its name once more to Malaysia-Singapore Airlines and thereafter ceased its operation. It was then divided into Malaysia Airlines and Singapore Airlines.

A Airspeed Consul, the first aircraft type operated by Malayan Airways
[edit] Malayan Aviation History
Scheduled air passenger services in Malaya commenced in 1937 when Wearnes Air Services (WAS) commenced operating services between Singapore, Kuala Lumpur and Penang. Wearnes Air Services was started by two Australian brothers, Theodore and Charles Wearnes.[9] The service commenced as a thrice weekly flight between Singapore and Penang The first flight, using an 8-seater de Havilland Dragon Rapide D.H.89A took place on 28 June 1937. This inaugural flight possibly departed from either the older Seletar Airport or the then brand new Kallang Airport. 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 Second World War Japanese occupation of Malaya and Singapore.
[edit] Beginnings
An initiative[10] by the Alfred Holt's Liverpool-based Ocean Steamship Company, in partnership with the Straits Steamship Company[11] 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.[12] This inaugural flight on the "Raja Udang"[13], 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.[14] 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.
In 1957, the airline became a state-run stock corporation. 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 Airlines" (though still abbreviated to MAS). MAS 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 afterward.
[edit] Incorporation

Malayan Airways DC-3
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)(now Malaysia Airlines),[15] 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, 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.
[edit] Expansion

Boeing 747-400
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. Soon after that, Malaysia Airline System rapidly expanded its services, including introducing long-haul flights from Kuala Lumpur to London.
In the same 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 services from Kuala Lumpur to Amsterdam, Paris and Frankfurt.
An economic boom in Malaysia during the 1980s helped spur 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 the United States destinations of Los Angeles and Honolulu. In 1993, Malaysia Airlines reached South America when the airline received its B747 aircraft. When Malaysia Airlines introduced its service from Kuala Lumpur to South America, MAS became the first and only airline in Southeast Asia to serve South America via its flights to Buenos Aires, Argentina. Services extended to Central America when Malaysia Airlines began flying to Mexico City in the 1980s, which route was terminated in the 1990s.
[edit] First 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 RM319 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. However, the airline plunged into further losses in the following year, 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, Honolulu, 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, totaling RM461 million.
[edit] Second 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.[16].
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[16] 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.[16]
Another factor for the losses was high operating costs. MAS substantially lagged its peers on yield. Some of this gap is due to differences in traffic mix,[17](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[17] respectively. However, despite its low labour cost, the ratio of ASK revenue (millions) to this cost was, at 2.8, much lower than Singapore Airlines, where the ratio is 5.0, and slightly higher than Thai International Airways[17]
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.
[edit] Recovery from unprofitability

Boeing 777-200ER
Under the various initiatives, launched together with the Business Turnaround Plan, Malaysia Airlines turned losses into profits between FY2006 and FY2007. When the Business Turnaround Plan came to an end, the airline posted a record profit of 851 million Ringgit (265 million dollars) in 2007, ending a series of losses since 2005. The result exceeded the target of RM300 Million by 184%.[18].
Among the initiatives that turned losses back into profit, route rationalising was one of the major contributors. Malaysia Airlines pared its domestic routes from 114 to 22, and also cancelled virtually all unprofitable international routes (such as Kuala Lumpur-Manchester, that required a 140% load factor to break even). 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 5.3 billion Ringgit to eventually purchase 55 narrow-body aircraft and 55 wide-body aircraft.[19].
[edit] Everyday Low Fares
Malaysia Airlines took an unprecedented move with its “Everyday Low Fares” (ELF) programme on 6 May 2008 which offers 1.3 million RM 0 for all domestic routes operated by Malaysia Airlines and Firefly.[20] According to the managing director of Malaysia Airlines, Datuk Seri Idris Jala the Everyday Low Fares programme will create new demand for people who do not fly with Malaysia Airlines.[21]
The Everyday Low Fares programme offers a maximum of 30% of the total seats on every flight which are unsold due to the average load factor of 70% on each flight. Thus, Malaysia Airlines is generating income for the airline through fuel surcharge, administrative fee and airport tax.[22] By 14 May 2008, Malaysia Airlines has sold more than 150,000 seats since the launch of the programme and 50,000 tickets has been sold in the first two days.[23]. Malaysia Airlines is also extending the programme to all Asean routes operated by Malaysia Airlines.[24]
However, the Everyday Low Fares programme launched by Malaysia Airlines has been strongly opposed by Asia's largest low cost carrier, AirAsia which claims that Malaysia Airlines is competing directly with AirAsia's business model but at the same time not allowing the budget carrier to compete against the national airline.[25]
[edit] Corporate information
Malaysia Airlines is listed on the stock exchange of Bursa Malaysia under the name Malaysian Airline System Berhad (MYX: 3786). The airline suffered high losses over the years due to poor management and fuel price increases. As a result of financial restructuring (Widespread Asset Unbundling) [16] in 2002, led by BinaFikir, Penerbangan Malaysia Berhad became its parent company, incorporated in 2002, in exchange for assuming the airline's long-term liabilities. On the operational side, the Government of Malaysia appointed Idris Jala as the new CEO on 1 December 2005, to execute changes in operations and corporate culture. Under his leadership, Malaysia Airlines unveiled its Business Turnaround Plan (BTP) in February, 2006, which highlighted low yield, an inefficient network and low productivity (overstaffing). The airline headquarters building in downtown Kuala Lumpur was sold. The new corporate headquarters is now at Sultan Abdul Aziz Shah Airport in Subang, Petaling.

Malaysia Airlines Boeing 777 flight MH138 docked at Adelaide Airport awaiting departure
Following the Widespread Asset Unbundling (WAU) restructuring of Malaysia Airlines, Malaysian Government investment arm and holding company, Khazanah Nasional's subsidiary, Penerbangan Malaysia Berhad[26] is the majority shareholder with a 52.0% stake.[26] After Penerbangan Malaysia Berhad, the second-largest shareholder is Khazanah Nasional, which holds 17.33% of the shares. Minority shareholders include Employees Provident Fund Board (10.72%), Amanah Raya Nominees (Tempatan) Sdn Bhd (5.69%), State Financial Secretary Sarawak (2.71%), foreign shareholders (5.13%)[26] and Warisan Harta Sabah (2.4%). It has 19,546 employees (as of March, 2007).[27]. Malaysia Government has been reporting that the government's holding company, Khazanah Nasional is keen on selling shares of Malaysia Airlines to remain globally competitive in an industry which is fast-consolidating.[4]
[edit] Subsidiaries
Main article: Malaysia Airlines Subsidiaries
Malaysia Airlines has diversified in to 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. Malaysia Airlines has over 20 subsidiaries, with 13 of them fully owned by Malaysia Airlines.[28]
Some of the subsidiaries include:
[edit] Financial Highlights
Malaysia Airlines experienced its worst lost in FY2005, with RM1.25 billion losses. 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: the leading monthly magazine covering the global airline industry.[29]