Monday, May 5, 2008
Every Day Low Fares
MAS has revised it's marketing strategy recently, which is a wise move although behind the market schedule. Compete with lower fare tactic is not the best method but at least can contend with other competitors in Malaysia
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If you study MAS' quarterly and full-year financial report carefully, you'll find out even without the sales of assets, MAS is making profits. No doubt the sales of assets boosted its revenue, but you should look at the operating profits. Furthermore, the sales of assets came in at the time MAS faced cash crisis (2006). It had to sell that time to survive. After several sales and lease back, it didn't sell assets anymore and instead focused on operating efficiency. With regards to the low fare initiative, there is a reason behind it. Read my story here. I'm not trying to paint a beautiful picture on MAS but from my experience of covering the airline industry, I can tell you MAS' turnaround story is just amazing. And one more thing, it does not decorate its book.
OK, I just found the figures. For the nine-month period up to Sept 2005, MAS made losses of RM1.3 billion. Idris Jala came on board in Dec 2005; and between Dec 2005 and September 2007:
One-off loss: RM320 million
One-off gain (from sales of aircraft and properties): RM375 million
Operating profit: RM2.24 billion
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