Following the disappearance of flight MH370, Malaysia Airlines are suffering from the biggest financial crisis in its 40-year history. The airline had experienced losses for the past three financial years, but was beginning to recover to a break-even point in 2014 until the tragic disappearance occurred. The airline recently released figures that revealed a record $138million loss for the first quarter.
Needless to say, Malaysia Airlines are looking for ways to reduce operational costs if it is to recover and indeed survive for the next 12 months. The company are committed to examining every area of operations in a bid to save money and have a plan in place to implement measures that could bring them to a break-even point in 2015.
This month will see the retirement of the final Boeing 737-400 aircraft in the MAS fleet, being replaced with the more fuel-economic and lower maintenance 737-800s. Also, the airline plan to introduce business class seats with a reconfiguration of the cabin spaces to produce higher revenues and plans for the purchase of Airbus aircraft have been put on hold for the time being.
As competition grows within the industry, airlines all over the world are looking closely at operational spending, and in that respect, MAS are not alone. Both commercial and business carriers can save money in many areas of productivity, including messaging costs, which can run into tens of thousands of individual messages each day. Companies such as ARINC offer consultancy services specifically designed to tailor messaging packages to help airlines to cut costs.
“We have to look at the business model that will allow us to be sustainable over the next 40 years,” said Hugh Dunleavy, MAS director of commercial operations.