Malaysia Airlines Performance Gap Analysis and Future Organizational Transformation Solution
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Added on 2020-07-22
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Critically evaluating performance analysis of Malaysia Airlines of current strategies to performance gap against forecasted strategic ambition 1 2. 6 PART 2 EVIDENCE REVIEW 8 PART 3 REFLECTIONS FOR EMPLOYABILITY ENHANCEMENT14 CONCLUSION 16 REFERENCES 17 PART 1 THE COMPANY REPORT 1 1. Critically evaluating performance analysis of Malaysia Airlines of current strategies to performance gap against forecasted strategic ambition Malaysia Airlines is the main airlines which is operating within Malaysia having t he headquarter at Kuala Lumpur.
Malaysia Airlines Performance Gap Analysis and Future Organizational Transformation Solution
Added on 2020-07-22
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ORGANISATIONALTRANSFORMATION
TABLE OF CONTENTSPART 1 THE COMPANY REPORT..............................................................................................11. Critically evaluating performance analysis of Malaysia Airlines of current strategies toperformance gap against forecasted strategic ambition..........................................................12. Future organisational transformation solution through adoption and implementation ofjustified self determined conceptual model designed to achieve new value addition............6PART 2 EVIDENCE REVIEW.......................................................................................................8PART 3 REFLECTIONS FOR EMPLOYABILITY ENHANCEMENT.....................................14CONCLUSION..............................................................................................................................16REFERENCES..............................................................................................................................17
PART 1 THE COMPANY REPORT1. Critically evaluating performance analysis of Malaysia Airlines of current strategies toperformance gap against forecasted strategic ambitionMalaysia Airlines is the main airlines which is operating within Malaysia having t heheadquarter at Kuala Lumpur. In 2014 after the accident of MH17 government of Malaysiadecided to buy back its remaining shares of about 30% from all minority shareholders thusmaking it nationalised airline once again (Malaysia Aviation Group. 2018). Company is havingtwo subsidiaries airlines namely Firefly and MA Swings and is also having freighter fleetknowing MA Skargo. In 1947 it flew its first commercial flights from Singapore as MalaysianAirways Limited which was it formally known to as. Malaysia Airlines is having about 71 fleetswith destination of about 61, all over world with having 14000 employees in 2016. In 2014 withhaving gap of less than 5 months company faced its most drastic accidents in which MA lost 2 ofits aircraft Flight 370 which disappeared and still not found and MH17 which was eventuallyshot down. Malaysia Airlines is having very diversifying portfolio related to sector and industrieslike aircraft ground handling, aircraft leasing, aviation engineering, air catering and touroperator. In order to maintain its core business which is of passenger airline company in 2013completely restructured itself with spinning off all operational units as fully owned subsidiaries. The Malaysian Airline system also called as MAS was created from a joint operation oractivity, the Malaysia airlines successfully achieved second position in the Aviation week's topsuccessful organisations in terms of money generated by airline services or business. TheMalaysian airline industry has become a most successful and award-winning carrier whichoperates more than 100 aircraft providing effective services to around 110 destinations over four1
continents. This airline system focuses on international expansion and development, they enabletheir growth as per the demand of the customers. The Malaysian airline has improved their in-flight services, infrastructure, ground support etc in order provide effective services to thecustomers worldwide. Competitive position of Malaysian airlinesThe Malaysia Airlines have many types of competitive advantages for example effectiveofferings of products, network distribution, Cost structure and customer support. The Malaysianairline may easily develop an impressive position within the airline industry due to its cheapservices as compared to the other airlines, this is a major competitive advantage for this airlinesystem. The airline system focus on offering most comfortable, better, modern and innovative aswell as attractive services to their customers. The Malaysia Airlines offer easy access to theirservice with the help of online portals which help the customers to make booking fast and easy.Therefore, it has become a most known and popular airline system in the aviation industry. In 2015 company was also facing problems which related to workforce and of adjustedroute network with more focus on Asia. Malaysia Airlines Berhad which was formerly known oras Malaysian Airline System Berhad Branded as Malaysia Airlines (Malaysia Aviation Group.2018). This is a part of MAG which is known as Malaysian Aviation Group which is globalaviation company with four distinct business segments. The four distinct structure was made sothat company could be able to drive good transparency which would focus on management allover its subsidiaries. The company is also meant to explore collaboration of opportunity that ofraising capital, enforcement of more amount of competition into subsidiaries and this will bemaking position within market stronger.After its crash airlines decided to rebrand, restructure and also renationalised which wasnot very good and effective option for company. In 2015 when two of its planes which wascarrying about 537 people with them were both destroyed within span of 5 months. Both theseevents took place at the time of holiday travel season during the month of Ramadan as this wasvery much engaged at that time (Malaysia Airlines again adjusts its widebody strategy. 2018).After the time when Malaysia Airlines decided to transform its whole operation and workingcompany came with all kind of positive results which was not at starting of changes. However, it2
was also noted that after the sudden accidents at airlines 3 of its CEO decided to step down in notmore than 3 years which was regarded to as very much concerning situation of all times.In the 3rd Quarter of 2017 Airlines started to witnessing slow and steady progress still itsaw tougher competition with rising fuel price and currency conditions were also not in theirfavour (Malaysia Airlines sees steady progress in Q3 2017. 2018). The load of passengers wasstatic at 77.5% but then also revenue was about 3.5% information technology saw greaterdevastating increase. Malaysia Airlines saw progress which was along a long way with theirmore and more focus on improvement of management practice and customer segmentation.Price-Malaysia Airlines (MAS) is on a way to implement a new 'micro-environment' faresystem for its' domestic network, covering 23 routes. MAS Business Turnaround Plan, is in linewith 'Flying to Win Customers' aspect. Fare segments has its own set of conditions regardingaspects like ticketing deadlines and refunds (Malaysia Airlines Berhad restructuring continuesto show positive results. 2018). Travellers can now combine different one-way fare flights to aplan personalized travel experience with cheaper rates. Beside the fact, the fares of economy and business class have been raised to an average of15% and 30% respectively, still they could enjoy the lowest air fare rates, globally. Due toInflation, the company, implemented cost cutting strategies that has helped positively in fareplus the overall Business Turnaround Plan (Malaysia Airlines sees steady progress in Q3 2017.2018). Airlines strictly adhere to government's plan for national integration initiatives whichoffers trans-Malaysian fares that begin from lower rates than before 21st August 2006. MASprovide discounts to senior citizens, members of parliament. Financial performance- Revenue of MAS declined due to high fuel prices, provision for aircraft redelivery,stock obsolescence, freight impairment in the year of 2007-11, an operating loss of MYR2,584.5 million. Profit/loss- 3
It saw a good performance in the year 2016 with the improvement in customer servicewhich is reflected in increased bookings. The company focuses to be a five star premium Asianairline, offering the best of “Malaysian Hospitality” to 15 million customers a year, travelling to54 destinations in 21 countries. It's “Golden Rule is - treat customers as you would wish to betreated yourself”.Passenger load factors improved in Q4 2016 to 81% year on year from 70% Q4 2015,achieving 90% in the month of December. Malaysia Airlines has maintained our fare disciplinedespite competitor fares dropping. We remain focused on cost control and have identified afurther RM400 million of cost reductions in 2017 to offset US Dollar strength (Malaysia Airlinessees steady progress in Q3 2017. 2018). The airline finished 49% ahead of our budgeted loss forthe year 2016. Malaysia Airlines offers great value on all-inclusive business and economyfares .An enormous growth potential is observed through inbound tourism from China toMalaysia.Actual Q3 2016Actual Q4 2016Passengers (m)3.63.8ASK (m)10,531.310,577.9Passenger Load Factor (%)79.3%80.9%Passenger Yield (sen)21.721.5On-Time Performance (%)68%70%Environmental Sustainability4
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