Restructuring / Turnaround Strategies Case Study

Malaysian Airlines: A Turnaround Strategy

Abstract:
Malaysian Airlines System (MAS), incorporated in 1937, was one among the only four to be awarded 5–star rating by Skytrax. MAS was characterized by government intervention and control. Due to this, fares charged in Malaysia were the lowest in the region. Foreign airlines were unable to compete at such a low fare which adversely affected the overall industry and also the profits of MAS. Moreover, rising fuel prices and poor management led to losses being incurred by the airline. Idris Jala was appointed as MD and CEO to overhaul the MAS operations. Poor pricing, rising cost structure, mismatch fleet, weak operational performance, low-intensity performance culture, and social obligations were contributing to their dismal financial performance.

The case highlights the trials and tribulations of MAS and efforts of Jala to improve efficiency and capabilities and turnaround the airline to profitability.

Pedagogical Objectives:

• To discuss the role of government in Malaysian Airlines System
• To understand the importance of management efficiency in the performance of a company
• To discuss and understand the turnaround strategies.

Keywords : Malaysia Airline System (MAS); Business Turnaround Plan (BTP); Idris Jala; Management Restructuring; Cost Reduction; Strategy Overhaul; Restructuring / Turnaround Strategies Case Study; Schedule Optimization and Airline Revenue System (SOARS); Mutual Separation Scheme (MSS); Financial Process Exchange System (FPX); Competitive Scenario; Government Policy; AirAsia; Low Cost Carriers; Penerbangan Malaysia Berhad (PMB); Kaula Lampur International Airport (KLIA); Turnaround strategy; Fuel prices