Its group CEO Ahmad Jauhari Yahya (pictured left), speaking after the company’s annual general meeting on June 21, said the updated business turnaround plan, which was announced last December, was to ensure that revenue was higher than cost of operations.
A number of initiatives will be undertaken to “sweat” the airline’s assets to maximise revenues and return the airline to profitability by 2014.
It aims, within three years, to trim operational costs by 20%, to increase revenue per available seat-kilometre by 10% from 18.5 sen as at end of last year, and to cut cost per available seat km by 20% or about 5 sen from 24.8 sen.
MAS will execute some of these initiatives within the next six months to a year via optimising all the assets, making some cost reduction for sustainability and leveraging onwork efficiency”.
“We just have to sweat our assets more as under the previous network utilisation plan the usage was low of our narrow and wide body aircraft,” Jauhari said.
There will also be changes to the work practices so as to be more efficient and to drive productivity levels up.
“We give ourselves up to 2014 basically to return to profitability, a change from our earlier target by 2013,” added Jauhari.
MAS will also optimise its fleet capacity by increasing frequencies on some profitable routes.
“We want to realise our capacity to where the opportunities are. We are currently utilising the nine-hour flight routes and plan to increase up to 11 hours flight routes,” he said.
The new Airbus A380 (pictured right) will help to boost further MAS’ fleet efficiency. However, the aircraft will only be used for the London sector and not for the Kuala Lumpur-Sydney route as it was too big for the Sydney sector.
MAS took delivery of the first A380 superjumbo in May, which will be used on services to London starting July 1.
MAS chairman Tan Sri Md Nor Yusof said that capacity cuts were not on the drawing board. Instead to grow revenue MAS has to realign capacity to match opportunities especially within the six-hour flying radius.
“We have the right mixture of aircraft types which will enable us to build a better orientation towards capitalising on the region particularly for the short-haul routes,” he said.
In the meantime, MAS will also look into other areas that they can deal with including maintenance, ownership, utilisation, system and procurement of aircraft.
Downsizing the staff of 20,477 (as of 2011) is, however, not on the card as part of the cost cuts although Jauhari said manpower costs would be dealth with.
On Firefly, Jauhari said the community airline would not resume its jet operations even though the MAS-AirAsia share swap was reversed. Instead it would concentrate on turboprops and maximise on point-to-point traffic. (Firefly’s jet operation was stopped after the inking of the MAS-AirAsia deal amidst speculations then that its jet services was growing to be a threat to AirAsia’s regional services).
MAS also has no plans to set up low cost airline now “as our immediate focus is revenue growth”, although it was not closing its doors to that option, said Jauhari.
