KUALA LUMPUR: Malaysian Airline System Bhd marks a new beginning today as it transitions into new entity Malaysia Airlines Bhd (MAB) in a restructuring exercise to claw back into profitability.
To inaugurate the migration, chief executive officer (CEO) Christoph Mueller will personally send off the passengers of its first domestic flight today, flight MH1138 bound for Penang, at the Kuala Lumpur International Airport in Sepang at 9.15am.
“This is the first step in a group-wide restructuring and it will be a seamless and a smooth transition. The restructuring is progressing well and Malaysia Airlines will see several changes.
“The rebranding exercise is ongoing but there will be no fanfare as we endeavour for a smooth migration to a new firm,” a source told Busines Times.
Meanwhile, a Malaysia Airlines spokesman said the carrier would continue to be known as Malaysia Airlines until the rebranding exercise was launched.
MAB received its air operator certificate from the Department of Civil Aviation on Friday.
Frost & Sullivan GIC Malaysia Sdn Bhd managing director Hazmi Yusof said a fresh and reborn Malaysia Airlines could be expected and one that strove to maintain its old charm but geared to thrive in the current environment.
“MAB’s overall priority after this is to implement its strategies and plans well. As in any turnaround plans, communicating and engaging its stakeholders, from employees to the general public, is important.
“A big part of the journey is the belief and confidence that things will work out successfully.”
He said the strategy to downsize and focus on domestic and regional routes was widely seen as necessary.
“Having the right fleet for the right route is also important as fuel and efficiency cost has a direct impact on profitability. The timing and speed of replacing its ageing fleet is important.”
Hazmi added that many competing airlines were beginning to focus on customers’ experience and how well they were treated.
MAB needs to make sure the entire customer journey, from purchasing to travel and post-travel, is well managed.
He said the airline industry was fairly volatile, competitive and influenced by many external factors.
Price competition, fuel cost, economic conditions, natural disasters and security instability have a short-term impact on the profitability.
Hazmi said a new logo was psychologically important for stakeholders. To the employees, it’s a fresh start with all the positives.
However, Endau Analytics analyst Shukor Yusof said the rebranding might not impact the airline’s ability to stay relevant in an industry that was constantly changing.
“Apart from cosmetic changes, pretty much everything else appears the same due to the same old game with the same old management, albeit a new CEO.
“In my opinion, Malaysia Airlines is losing its place in the market, especially after having retrenched many employees who possessed key skills in the sector. Many people now identify AirAsia as the de facto flag carrier of Malaysia.
“The weakening of the ringgit poses a deeper and more acute challenge for the airline, irrespective of the decline in oil prices.
“A dearth of talent to manage the carrier beyond 2020 may further aggravate an already perilous predicament.”
Shukor said a new Malaysia Airlines was only superficially new until it could detach itself from old habits and mindsets.