Full Service Airlines - Malaysian Industry

Our
journey…
We have come
a long way
MAS: We Have Come A Long Way. . .
1937
1947
1960
1967
• Formation
• First int’l nonof Malaysia
stop service
Airways
(KULÆHKG)
Limited
(MAL), Oct
12, 1937
• First fare
• Name
paying
changed to
passengers
Malaysia(SIN Æ KUL)
Singapore
• International
flights within 3
months
Airlines
(MSA)
What we are today:
1971
• Partnership
between
Malaysia and
Singapore
dissolved
• Malaysia
Airlines Bhd
incorporated in
April
• Name changed
to Malaysian
Airline System
(MAS)
1987
1996
2002
• Received World
Class awards –
Best Cabin Staff
2007, Economy
Class Onboard
• Successful
Service
implementatio
Excellence 2006
n of Wide
Asset
• Refined MAS
corporate logo Unbundling
(WAU)
• Official change
of name to
Malaysia
Airlines
• Bought
B777s
and
B747s
60 years of aviation
Among the pioneers in the Asian region
2003-2007
Investing in today
will change our
tomorrow
A reminder….where we came from
Prognosis of our business fundamentals
9 Excellent world class products & services
9 Comparable load factor
8 Low yield
(20.5 sen/RPK vs. industry average 22 – 32 sen/RPK)
8 Inefficient network
(not configured to match our target customers and
markets)
8 Low productivity
8 Lack of cost control
Business Turnaround Plan (BTP) –
“The MAS Way”
2006 - 2008
“The MAS Way”
MISSION:
To be a profitable airline
COMMERCIAL
OPERATIONS
Flying to Win Customers
Mastering Operational
Excellence
FINANCE
Financing and Aligning
the Business on P&L
PEOPLE
Unleashing Talents and
Capabilities
STAKEHOLDERS
Winning Coalitions
STRATEGY:
BUSINESS TURNAROUND
To achieve sustained profitability by going
beyond expectations on 5 thrusts
WHERE WE ARE TODAY:
A 60 year-old airline
Where we are today
•
Uplifted 15,466,000 passengers for 2006
•
Average load factor 70% systemwide
Our Reach
•
We provide both domestic air services in Malaysia as well as
operate an international network
•
We also have extensive code-share arrangements to provide
improved connectivity options in key markets
•
Overall, we link around 100 destinations around the world,
covering all 6 continents
WHERE WE ARE TODAY
Over 100 destinations around the world
MH FAMILY TODAY - 18,000+ staff
OUR INTERNATIONAL NETWORK (August 2007)
OUR DOMESTIC NETWORK (August 2007)
Strong partnerships
yield
greater success
OUR AIRLINE PARTNERSHIP NETWORK
Objective: Increased connectivity & seamless travel for customers at affordable fares
Connects MAS’ International flights into
London to 8 cities in UK, operated by
British Midlands
Bergen
Oslo
Stockholm
Helsinki
Stavenger
Edinburg
Gothenburg
Teesside
Amsterdam Copenhagen
Codeshare with KLM to 9
Frankfurt
London Leeds
Scandinavian Destinations
Brussel
Milan
Geneva
s
Barcelona
Sandefjord
Aberdeen
Belfast
Glasgow
Dublin
Manchester
Rome
Athen
s
Code-share with Alitalia to destinations
in Southern part of Europe
Madrid
----------------------
- Operated by Malaysia Airlines
- Operated by Alitalia
- Operated by South African Airways
-------- - Operated by Virgin Blue
-------- - Operated by Transaero Airline
-------- - Operated by Gulf Air
-------- - Operated by KLM
Bahrain
Muscat
Codeshare with Gulf Air for flights
between KL to Bahrain and Muscat
Langkawi
KUALA
LUMPUR
Penang
Kota
Kinabalu
Dar er Salaam
TANZANIA
Victoria Falls, ZIMBABWE
Harare, ZIMBABWE
Gaborone, BOTSWANA
Windhoek, NAMIBIA
Johannesburg
Port Elizabeth
Darwin
Maputo
MOZAMBIQUE
Durban
East London
Phase 1: South African Airways to market seats for KL –
Johannesburg, operated by Malaysia Airlines.
Phase 2: Code-share to expand to destinations in domestic
points in South Africa and regional destinations in Africa
Seamless connectivity from Malaysia
Airlines 3 International Australia’s gateway
ports to 22 Australian cities and centres,
operated by Virgin Blue
The agreement will roll-out into Phase 2 to
include Perth & Sydney (TBA)
Cairns
Townsville
Hamilton Island
Mackay
Rockhampto
Fraser
Coast
n Sunshine
Coast
Broome
Brisbane
Perth
Adelaid
e
Melbourne
Launceston
Hobart
Gold Coast
Ballina Byron
Coffs Coast
Newcastle
Sydney
Canberra
OUR EXISTING AIRLINE PARTNERS:
Making the
most of
what we have
OUR AIRLINE SUBSIDIARIES
Firefly
1st Community airline
Latest development: 4 hubs Penang,
Kinabalu & Johor Bharu
Subang, Kota
Started operations – 2 April 2007
Home Base - Penang
Network: 2 international (Phuket, Koh Samui – 1 x daily)
4 domestic (Kuantan, Kota Bahru, Kuala Trengganu, Langkawi – 2 x daily)
Current Fleet – 2 Fokker F50 aircraft
Future fleet plan – 10 ATR firm and another 10 ATR optional
OUR AIRLINE SUBSIDIARIES
MASWings – takes to the skies from 1 Oct 2007
MASWings is our commuter airline
[1] Reliability
(on time departure)
[2] Friendly
MASWings NETWORK
Fokker 50
Twin Otter
Kudat
Kota Kinabalu
Sandakan
Kota Kinabalu
Sandakan
Labuan
Limbang
Miri
Mulu
Bintulu
Sibu
Kuching
Home Base: Miri, Sarawak
Lahad Datu
Tawau
Limbang Lawas
Miri
Marudi
Bakalalan
Mulu
Bario
Long Seridan
Long Lelang
Mukah
Long Akah
Bintulu
Long Banga
NETWORK GROWTH FROM 2007 TO 2011
Core Network
HUB & SPOKE
MAINTAIN
N America
10x
GROW
Europe
43x to 44x
RESTRUCTURE
Mid East
11x to 15x
China
60x to 91x
GROW
S Asia
40x to 74x
N Asia
46x to 53x
GROW
GROW
ASEAN
244x to 316x
MAINTAIN
S America
2x
MAINTAIN
S Africa
3x
RE-ALIGN / HUB & SPOKE
Australia
MAINTAIN
41x to 47x
New
Zealand
5x
The core network will feature collaboration between MAS,
Firefly, MASWings and other partners
MALAYSIA AIRLINES’ AIRCRAFT FLEET
As at 31 July 2007
Aircraft Type
Own
Leased
MH System
Engine Type
B747-400
-
17
17
PW4056
B747-200F
-
4
4
GE/RB/PW
B747-400F
-
2
2
PW4056
B777-200
-
17
17
TRENT 892(RR)
A330-300
-
11
11
PW4168
A330-200
-
3
3
PW4168A
B737-400
-
37
37
CFM56-3C1
F50
2
-
2
PW125B
TOTAL
2
91
93
Future Plans:
•8 Fokker 50 and 5 Twin Otter aircraft will be in our subsidiary MASWings by 1 Dec 2007
•Six A380 will join the fleet from 2009
•MAS may replace up to 110 aircraft – 55 narrow body & up to 55 wide body
•Proposals received from Boeing, Airbus & Bombardier for up to 55 aircraft to replace 737-400s.
•Looking at 2-3 aircraft type
•Funding will be a mixture of : cash, rights issues, assets sale, banks & leasing companies
•Plans to replace current fleet by 2012-2014.
•RFP for wide-body to be out by the end of 2007.
Listening
to our guests MH Customer Value Proposition
What’s the Challenge for MH Customer Value Proposition?
• 15.5m passengers carried / year
• Assuming 10 interactions with MAS
per passenger - 155 million moments
of truth/touchpoints
• 9,397 flights / month
• > 300 flights / day
• 18,641 staff strength
IT TAKES ONLY ONE OF THESE SITUATIONS TO CAUSE A FLIGHT DEPARTURE TO BE DELAYED
FLIGHT
OPERATIONS
CATERING
ENGINEERING &
MAINTENANCE
Brake Landing gear
defect
Aircraft late arrival
defect
Cabin Crew
Late Cabin
Briefing Delayed
Crew Transport
FTL exceeded
IFE inop
INTEGRATED OPS
CENTRE
Retime for late connecting pax
Mechanical
failure
Station / Destination problems
Emergency situations
No standby crew
No standby
Defect not
Bomb threats
crew
deferrable
Late Flight plan
Flight disruption at line stations
Autopilot
Crew on
Toilet
Meals short-shipped
Overbooking Downgrade/
MC
Engine defect defect
iCMS failure
W rong menu
defect
Upgrade acft
cards
Late fuel
Birdstrike
Late Crew
chit
Aircraft
Briefing
Aircraft
Commercial
upgrade /
Prolonged
Catering
downgrade
Cockpit checks
Disorganized
Aircraft swap
Operations
group
Crew meal
Late meal order
Aircraft Recovery
not uplifted
Last minute
Last minute
cancellation
Crew Transport Tech crew not
Catering equipment breakdown
rescheduling
Last minute bay change
available
late
Crew without Visa
Inflight
Services
Late runaway allocation
Contaminated runway
ATC
COMMS SITA KLIA TAMS
Bad
Busy
Air traffic Weather
Aerobridge
Or Pax step
Late
Bay not allocated
MAB
Baggage
System down
Stringent security checks
Fuelling error
Fuel spillage
Systems
Availability
Long queue at
Immigration
FM CS
slow
MAS
Network
DCS
down
Immobilized aircraft
on runway
Excess baggage
VVIP
Manual loading
Oversized cargo
Pax
cases
Anti hijack / anti
sabotage checks
NTL Drunkards
Disabled/Sick
CARGO
Arms handling
Manual
SERVICES
Inaccurate
Fraud passport
loadsheet Loadsheet
Loadsheet
late
Aggressive pax
Load sheet
SECURITY
Bomb Scare
Handling of Security-sensitive
or Special cases
Air Defence Exercise
OTHERS
Ground equipment inoperative
Manual check-in
Manual Boarding
Cabin too dirty
IT PLANNING
& SERVICES
Late pax
Cargo offloading
No Electrical Power
OTHERS
Pax lost way
Seating problem
Runway/taxiway under repair
Late fuel bowzer
Overweight cargo
Chemical spillage
Dangerous Goods
KOMMAS Unavailable
Fuelling problems
Inhold baggage
loading inoperative
Ground incident
Subsystems
unavailable
Dep. gate
not opened
DEPARTURE
A17
Late cargo release
Late pushback/Tow-tug
ON TIME
AIRPORT
OPERATIONS
OUR CUSTOMER VALUE PROPOSITION IN BTP
What is CVP?
•A proposition (comprising product, service, experience) that wins the customers
•Offers & delivers a unique customer experience to achieve profitable growth
•A compelling need for us to increase service levels to customers
•Our Malaysian Hospitality, Hassle-free, All the Way CVP
•Convenient
•Responsive
•Proactive
•Easy
449 initiatives to improve customer experience under
customer experience program
MHCVP Quad Execution
Fix Top Breakage
Track & Benchmark
Product
Development &
Service Audits
Engagement
All about execution (Discipline of Action)
MHCVP Quad Execution
1. Fix Top Breakage
HQ/Central CVP Initiatives
• Workshops - Delay Handling, E-Platinum, Special Meal
• FTBs Improvement Programs – OTP & Delay Handling,
Delays & Cancellation Reduction, Inflight Food, Seat &
IFE Serviceability, Cabin Items Serviceability
Route CVP Labs
• All Route Regions – Aug 2007
Route CVP Review
• China, South Asia & North Asia – Nov 2007
3
3
3
3. Product Development & Service Audits
Product Development
• Chef on Call, Cocktail on Cart, Enhanced Porter Service,
F&B Concept & Development, A330 Portable Media Player,
A330 RNSD, Inflight Box Meal
• A330 Refresh BC Seat Covers, E-Ticketing
Product Specific Audit
• RNSD
HQ CVP Audit
• Delay Handling Audit
Route CVP Audit
Partnership with Audit & Business Advisory, Risk & Policy
Advisory Services
3
3
3
3
3
2. Tracking & Benchmarking
3
3
3
3
3
3
2007 Quarterly targets set for key areas
Tracking vs. IATA Gap, IIS & Corp Std
• Quarterly review
MH Steering Committee (MHSC)
• Chaired by MD, selected MC & invitees
• Monthly reporting, 1st meeting 20 Apr 2007
Mystery Shopper Program
Focus Group Discussion
Customer Advisory Panel
Voyage Reports
Partnership Development
4. Engagement
Internal & External
• Rallies at ASEAN & Domestic Hubs tied to Labs
• FO, AO, IFS & Cabin Crew, Call Centre Rallies
• Employee Engagement Program, MH Juara
• MHCVP Brief to Execs & Mgrs
• MH Reach – engaging suppliers and vendors
• MH Summit 2008
Training & Development
• IMTD – 10 classes conducted (200 staff)
• 27 classes calendared till Dec ’07 (675 staff), incl. KCH,
PEN, BKI
• MH Begins with Us & MH Awareness
• MH Soft Skills Program
Reward & Recognition
• Trial MHI$ Aug – Oct 07
• MHI$ Enhancement
• Anugerah MH
3
3
3
3
3
3
3
3
MH Programs
1. MH SWEEP
2. MHI$
A increased vigilance program e.g. to
sweep aircraft of defects, ensure 100%
clean-up
An MH incentive program
3. MH Onsite CSI
An onsite investigation of critical breakage
LIVE IT – WAY OF LIFE
4. MH Talk about it!
5. MH Roll-up Your Sleeve
6. MH SWAT Team
7. MH Prowl
8. MH Reach
To talk to 5 staff each day on MHCVP
face to face
Physically present for 2-3 hours at the
frontline (GMs & SGMs)
Dedicated team for improvement on a daily
basis – review processes & procedures
2 hours daily check on touchpoints & implement
corrective actions on the spot
Daily 3rd Party Check/Engagement Dedicated staff to issue reminder letters or
implement regular engagement with vendors to
communicate MH
Engagement
Rallies - Townhall
2007MH Award Recipients
“Juaras” – MH Champions
Syndication with Frontliners – Call Centre
Townhall Exhibition
Syndication with Frontliners – Airport Ops
Extended Leadership Team
It’s all about people!
Engagement
(Communication)
Townhall Exhibition
Townhall – 25 Jan 2007
Rallies at KUL
Rallies at ASEAN & Domestic Hubs
Engaging employees across the organisation and systemwide
Awards drive us
to deliver better
AWARDS RECEIVED IN 2006
5 Star Airline
Skytrax, UK
Best Economy Class Onboard Service Excellence
Skytrax, UK
Top Three Best Cabin Staff in the World
Skytrax, UK
No 1 in the world for “economy class onboard service excellence”
Skytrax, UK
‘Trusted Brand 2006 Platinum Award – airline category’
Reader’s Digest
No 1 - Best New Business class
Global Traveler Awards, New York
Best Airline to Asia
Travel Weekly Globe Awards, UK
World’s Best Resort – Development Category
FIABCI Malaysia Property Awards
Excellence in Logistics – Air Cargo Services
Technology Business Review Magazine, Malaysia
Best Airline to South Asia
Hospitality India Awards
Airline Turnaround of the Year
Centre for Asia Pacific Aviation (CAPA), Australia
AWARDS RECEIVED IN 2007
5 Star Airline
Skytrax, UK
World’s Best Cabin Crew
Skytrax, UK
Net profits
Latest financial results: 3QFY07
Jan-Sep 07
364m
610m
Highest profit in our 60-yr history
Flying the
Malaysian flag
high
Video
Thank You
Five-Star Airline @ LCC Cost
Five Star
Revenue
Cost
MH CVP
Campaign
LCC Cost
NIAT
Structural Cost
Reduction
Project Omega &
Alpha
Unleashing talents
OUR CUSTOMER VALUE PROPOSITION INITIATIVES
Loyalty programmes
Silver tier Enrich membership
Rebranded Enrich programme with new benefits
Chef on Call facility for Enrich Platinum members
Rebranded Corporate Signature Programme
Enrich partnership with Bank Mandari, Indonesia
Enrich Shopping Indulgence
Co-branded CIMB-Enrich MasterCard
Pre-embarkation & Embarkation
Customer Service Executives on duty at KLIA
Enhanced Denied Boarding Compensation policy
On-site recovery for creeping delays & denied boarding
Improved On-time Performance
Improved Boarding Announcement
OUR CUSTOMER VALUE PROPOSITION INITIATIVES
Golden Lounge KLIA
Noodles Station
Golf-putting room
Shoe-shine service
Coffee-of-the-day
Inflight
Food & Beverage Enhancement Programme
Upgraded Inflight Entertainment programmes
Improved Cabin Crew Communication Skills
Disembarkation
Minimise Mishandled Baggage Performance
Proactive assistance at baggage arrival
HISTORY
Significant dates:
1947 – Malayan Airways took to the skies
1963 – Renamed as Malaysian Airways Limited
1965 – Renamed Malaysia Singapore Airlines
1971 – Incorporation of Malaysia Airline Limited
1971 – Further name change to Malaysian Airline System
1972 – Malaysian Airline System took to the skies
1987 – Final name change to Malaysia Airlines
What we are today:
60 years of aviation
Turning
our achievements
into greater success
ENGINEERING