Home' Asian Aviation : AAV October 2014 Contents 4 AsianAviation | OCTOBER 2014
his month’s issue includes Malaysia
Airlines’ Dean Dacko, SVP of marketing &
products, recounting an “unprecedented”
year for the carrier. It’s a reminder, if one is
needed, of the critical importance of having a crisis
management strategy in place.
But beyond that, there are many lessons to be
learned for the whole industry. A key message
from Dacko is that airline crisis management needs
updating for the digital age. Gone are the days
when response strategy dictated by lawyers was
Another lesson was the importance of cloud
computing — something that MAS had invested
in not too long before MH370. This was critical in
helping the airline cope with the sheer volume of web
traffic, as well as four cyber attacks — each of which
could have brought the entire IT system down.
Dacko also talks about how the search for MH370
was hampered by the lack of cooperation from the
various military establishments in the region, making
it pretty much impossible to verify any information.
Meanwhile, the future of MAS is far from certain.
State-owned Khazanah Nasional will take the
company private by the end of the year, but its
strategy seems unclear. To be fair, turning around
MAS is no easy task — it is sandwiched between full
service carriers with higher yields, and the low-cost
sector. It is perhaps unlucky to have AirAsia on its
doorstep, but most of MAS’s problems have been of
its own making.
It has been chronically over-staffed for years, and
its taken the tragic events of 2014 to finally see some
In the MAS Recovery Plan, Khazanah details to
the cost to the Malaysian state of supporting the
flag carrier, hinting it can’t continue. But Khazanah
appears to be talking the talk, rather than walking
the walk. For instance, the airline is still adding
capacity, and the new CEO won’t arrive until just
before the fourth quarter of next year. This gives
him or her a year or two to return the carrier to
profitability — according to the Recovery Plan which
calls for a return to profitability in 2017.
Will a white knight ride to the rescue? Etihad’s
strategy of building up a basket (or should that be
basketcase) of perennial loss making airlines seems
to be on hold. This mysteriously seems to have
coincided with the recent dip in oil prices. In any
case, they would appear to have their hands full with
the likes of Alitalia, Jet Airways and the like.
A more likely, or at least sensible option would be
AirAsia. MAS could become a premium brand for
the Group. But this would require a lot of fences to be
mended between Tony Fernandes and the Malaysian
Government. Ironically a deal between the two was
scuppered by unions in 2012.
The MAS crisis and the political turmoil in Thailand
contributed to a weak performance for Asia-Pacific
air traffic in June and July. IATA says that “Within
Far East’ saw a dip in traffic over the two months of
2.9%. But it believes that this will be short-lived.
It bases this on the assumption of a managed slow-
down in China, the region’s key economy. China’s
industrial growth and retail sales growth were both
weaker than expected in August, and Danske Bank
warned that the slowdown could be more severe
than expected. But reformist Premier Li Keqiang is still
confident of hitting the country’s target of 7.5% growth
rate — which many other countries can only dream of.
In any case, many feel that we are nearing the
top of the cycle and in certain parts of the world,
including South and South-East Asia, airlines are
already struggling. India’s airline industry seems
stuck in perennial crisis, and MAS is not the only
ASEAN airline in a fragile state — although its
travails are by the far the worst in the region.
North Asia, on the other hand, is still relatively
buoyant, and leasing companies are helping to relieve
the pressure by moving capacity into this region and
other strong performing areas, including the US.
But there is another cloud looming on the horizon
interest rate rises. There seems to be a general
expectation that these will rise at some point in the
not so distant future, maybe late next year. What
effect this has on the leasing and wider airline
industry remains to be seen. ✈
Quick Response (QR) codes allows readers with smart phones to unlock the web based content behind the code.
To allow the content to be accessed, the mobile must have a QR code reader installed. Many phones come with
readers installed, but if not, one can be downloaded for free, by texting ‘rdr’ to +61 (0)429 112 756. A message
will be sent back with a link to allow download of the software applicable to your phone. For further details on QR
codes please go to: asianaviation.com/navigating-qr-codes
New generation aircraft
A more likely, or at least sensible
option would be AirAsia. MAS
could become a premium brand
for the Group.
Links Archive AAV Nov 2014 AAV Sept 2014 Navigation Previous Page Next Page