MAS all prepped to face on-coming competition

MAS

MAS all prepped to face on-coming competition

The past few years have certainly been a mixed bag to say the least for Malaysia Airlines but recent developments will indicate that the national carrier may be on its way to recover some of its glitter. The current management led by group chief executive officer Ahmad Jauhari Yahya has put in a business plan to turn around the airline to regain that sparkle. And if recent news are anything to go by, MAS could be going in the right direction.

MAS has been on a roll lately with some encouraging news. It has recently become a full member of the oneworld alliance, announced an improved financial performance and is currently bolstering its balance sheet with a proposed rights issue of RM3.1bil. The new funding for its capital expenditure and working capital if utilised efficiently, could be the cornerstone of its recovery.

MAS cannot afford to rest on its laurels in an industry where competition is fierce. Locally, low-cost carrier AirAsia Bhd has proven to be more than an able competitor. Soon, MAS will have to fend off new low-cost carrier Malindo Air which will start flying by the end of this month. This will certainly intensify competition. Local competition aside, MAS also has to compete with other full-service carriers in the region. Hence, MAS will have to up its ante to stay in the game. It has recently announced an extra 10kg weight to its complimentary checked-in baggage allowance for all routes, except for flights to Los Angeles in the United States. The is a good move indeed.

Theoretically speaking, I don’t think travellers will go for no frills airlines when for the same price they can enjoy MAS in-flight dining and entertainment system for free. Analysts expect the entrance of Malindo Air to spark a price war among the airlines. A Malindo air ticket from Kuala Lumpur to Kota Kinabalu starts from only RM68.

As brand loyalty poses another challenge, MAS entry into oneworld alliance is timely and gives it extra mileage. MAS’ Enrich frequent flyer members will have their privileges extended to flying with any oneworld member airline worldwide, including the ability to earn and redeem reward points throughout the alliance’s global network. Such competition will mean some turbulence days ahead. MAS will definitely need to buck up in order for it compete and recent moves show it has.

Source: Star Business – http://biz.thestar.com.my/news/story.asp?file=/2013/3/9/business/12808433&sec=business

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