Malaysia Airlines System Berhad - Risk Management

Introduction

Malaysia Airlines System Berhad is also known as MAS in short. Malaysia Airlines was established in 1 May 1947, and was known as Malayan Airways. Later on, it changed its name from Malayan Airway to Malaysia Airline System on 1 October 1972. The government of Malaysia owns MAS, which is the flag carrier. MAS headquarters is situated at Sultan Abdul Aziz Shah Airport in Subang, Selangor. MAS flights were primarily base in Kuala Lumpur International Airport (KLIA) and subsidiary base in Kota Kinabalu. (Advameg, Inc, 2016) Malaysian Airlines System Berhad is the holding company for Malaysia’s national airlines carrier. It is one of the fastest growing airlines in Asia. Firefly and MASwings are two subsidiaries of Malaysia Airline. MAS uses two main type of craft Airbus which are A330-200, A330-300 and also Boeing 737-400, 800 and400/400. Malaysia Airlines operates a fleet of aircraft with two cabin configurations which are Malaysia Airlines B747-400 and B777-200ER. Malaysia Airlines B747-400 fleet has three cabin configurations, which are First class, Premium cabins and Economy Class. Malaysia Airlines B747-400 has been given numerous awards for their excellent product and service delivery. Its B777-200ER fleet has two configurations which is Golden Club Class and Economy Class. Malaysia Airlines have grown to become an award winning airline. MAS have more than 1000 aircraft, which serves more than 110 destinations across six region. It is very impressive for a small air service. Moreover, Malaysia Airlines System also provides online booking and buying, which makes reservation or purchasing very much easier for their passengers. Malaysia Airlines was voted as ‘Asia’s Leading Airline’ at the (WTA) World Travel Awards in October 2013. World Travels Award is a benchmark for industry quality and business excellence. The award can be considered as the Oscars of the travel industry. After several months of renovation works, Malaysia Airlines launched refurbished Golden Lounge at Kuala Lumpur International Airport (KLIA) In February 2014. Today, the airline flies over 100 worldwide destinations with almost 50,000 passengers daily.  (SeatMaestro, 2016)

Malaysia Airlines Crisis

Malaysia Airlines airplane have been involved in two fatal mishaps, with a sum of 134 victim The first accident occur in December 1977, a Boeing 737-200 were hijacked and it crashed in Tanjung Kupang, Johor and 100 people were killed. The second accidents happen in September 1995. A Fokker 50 slammed during the approach in Tawau, Sabah, causing 34 victims. The third most calamitous accident occurred on March 8, 2014. Malaysia Airline Flight (MH370) scheduled from Kuala Lumpur to Beijing was vanished. The airplane, a Boeing 777-200ER was carrying 12 Malaysian crew and 227 passengers from 14 nations. The airplane last made voice contact with the air traffic control at 17:19 UTC, 7 March (01:19 MYT, 8 March). The last contact made was less than an hour after the flight takeoff, which was over the South China Sea. At 01:22 MYT it vanished from air traffic control radar screen. Despite the disappearance of MH370, the Malaysia military did not fail to continuously track the airplane. Malaysia government and Malaysia Airlines had initiated a search and rescue operation, when MH370 lost contact from air traffic control. (BBC News, 2014) However, the search and rescue operation was unsuccessful despite that it was going on for almost a year, yet there was no evidence of MH370. On 29 January 2015, Malaysia government has official declared the loss of Malaysia Airlines flight MH370 and presumed 12 Malaysian crew member as well as 227 passengers dead.  (Brumfield, 2015). The forth accident occurred on 17 July 2014; it is the same year as MH370. Flight MH17, scheduled from Amsterdam to Kuala Lumpur, and suddenly went missing from radar. A total of 283 passengers, including 15 crew members and 80 children were on board.MH17 airplane left Amsterdam's Schiphol Airport at 12:31 MYT (10:31GMT) on 17 July and scheduled to arrive at Kuala Lumpur International Airport (KLIA) at 06:10 MYT (22:10 GMT). MH17 airplane lost contact with air traffic control at 23:20 MYT. MH17 airplane was about 50km from the Russia-Ukraine border. Malaysia Airlines flight MH17 were killed when it was shot down over Ukraine, a missile exploded just above and to the left of the cockpit, killing three crew members immediately which cause caused the plane to break into stages. It begins with the cockpit that broke way, however the plane continue to fly, but after sometime the wing of the airplane flew off and the back of the airplane broke away. This caused the main body of the airplane to crash into the ground upside down. (BBC News, 2015)

Malaysia Airlines Response

As soon as Malaysia Airlines received the news that MH370 lost contact from air traffic control, they initiated a search and rescue operation along with Malaysia government. (BBC News, 2014) Malaysia Airlines decided to distribute succinct, quick and honest updated to public, by utilizing Facebook and Twitter. Malaysia Airline senior staff member communicate on the behalf of the entire company by using social media to express since and compassionate regret. Malaysia Airlines decided to remediate the situation by supporting the families of those involved in the unprecedented disaster of MH370, through the development of a Family Support Centre.

Besides that, Malaysia joint and conducted an additional search rescue operation with Vietnam. US help by dispatches numerous ships and planes to the South China Sea to help in search and rescue of MH370. China likewise sends two maritime rescue ships in search of MH370. Later on Malaysia rescue ships indicated there was no sign of MH370 flight where it last contact. Malaysia Airlines discover there were two passengers who board MH370 with stolen passport. After several investigations, Malaysia Airlines was able to determine whose actual passport it was, the stolen passport belongs to Lugi Maraldi, a 37 year old Italian male, and Christian Kozel, a 30 year old Austrian male as well. (MGN Limited, 2014) However, those men who board the plane with a stolen passport was Iranians, aged 18 and 29, who had entered Malaysia using their real passports. When public questioned how the organization can make such mistake, how did the two men’s managed to use a stolen passport to board the plane? Malaysia Airlines responded by saying they followed the standard operation procedure of MAS.

The search of MH370 continues thought-out 2014, there was no solid evidence. Each time Malaysia Airlines claim to found parts of MH370, it turns out to be a false alarm. As for now, Malaysia Airline claims there are searching around Southern Indian Ocean, however parts they found are elsewhere hence the media makes their statement a bigger issue. Finally, after two year on January 29th 2015 Malaysia Airlines declared all passengers and crew member’s flight of MH370 deceased. As the airlines recognize the loss of flight MH370, they begin to compensate family members. Malaysia Airlines decide to inform the family members through a text message stating “Malaysia Airlines deeply regrets that we have to assume beyond any reasonable doubt that MH370 has been lost and that none on board survived.” (Siemaszko, 2014)