The Strategic Recommendations for Malaysia Airlines

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INTERNATIONAL COLLEGE OF MANAGEMENT SYDNEY

THE STRATEGIC RECOMMENDATIONS FOR MALAYSIA AIRLINES

HOS801- Strategic Management in Tourism and Hospitality

THI THUY CHINH VU        ID: 4010991

05/06/2018

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Abstract

The purpose of the article is to develop critical thinking skill through offering strategic recommendations of a Tourism and Hospitality organization.  The article will choose Malaysia Airlines (MAS) as a researching objective. First of all, the report will give more details about the establishment of MAS and then mention several development strategies of the company. After that, it is going to analyse the internal and external environment which is based on the analysis of PEST and Porter’s 5 Forces. It also will indicate the key strategic activities through primary and support levels. After all, some strategic recommendations would be offered to improve and develop the company’ performance and management in the next year .

Table of Contents

Abstract        3

1.        Introduction        4

2.        The current development strategies        5

3.        External environment analysis        5

4.        Internal environment analysis        6

5.        The development of strategy at the primary and support level        8

6.        Strategic recommendations.        9

7.        Strategic implementation.        10

8.        Conclusion        10

References        11

1. Introduction

Historically, Malaysia Airlines, formerly known as Malaysian Airline System Berhad (MAS), is the government-owned flag carrier of Malaysia. The airline originated from Malayan Airway Limited which was founded in Singapore in the 1930s. However, the airline was officially established in 1947, since the Federation of Malaysia was independent. It changed its name to Malaysian Airways and its headquarter located in Kula Lumpur International Airport and its second hub in Kota Kinabalu and Kuching.

In 1966, after both the government of Malaysia and Singapore granted independence to Singapore, they decided to make a joint ownership of each national carrier. Thus, the airline was renamed to Malaysia-Singapore Airlines and expanded the international fights. Nevertheless, these two governments decided to split up to two separate national airlines in 1972 including Malaysian Airline System (MAS) and Singapore Airlines.

The airline tends to expand its capabilities to international market after participating in Orient Airlines Association in 1972. For example, MAS offered fights to great destinations of Europe like Frankfurt, Paris and Amsterdam. By the end of the 1980s, MAS operated over 47 destinations from European region, Oceanian destinations to the United States area. Especially, the airline opened various international fights in Asian regions such as Guangzhou (China), Ho Chi Minh (Viet Nam), Fukuoka (Japan) and Pontianak (Indonesia). Nowadays, the airline carries almost 50,000 passengers each day, services more than 100 destinations, cover across 6 continents with its primary hub at Kuala Lumpur.  

Malaysia Airlines is known for an excellent record of service and the most notable recognition which was received by Skytrax UK is “World’s best cabin crew” in 2004. Furthermore, it got the first rank of Economy class on-board excellent and 5-star Airline in 2006 and 2005 respectively. Malaysia Airlines also was ranked 2nd in “Aviation week’s top performance” which values in the financial ability of an airline (Malaysia Airlines, 2014).

1. The current development strategies

1.  Product and Price

MAS offers three major travel classes such as Economic class, Business class and First class in the international routes. As for domestic flights, the company only provides two class including Economic and Business class. On the other hand, the cost offered also higher than others because it needs to maintain and improve the services of the 5-star company.

1. People

The majority of MAS’s customers is international fights passengers. MAS has built its target market to customers having high income and also to business travellers. Therefore, there is a small group of customers who can afford to pay for the ticket of MAS.

1. Promotion

MAS has promoted the loyalty customers program "Enrich Frequently Flyer Program" which is a strategy to hold the customer's loyalty. This program is developed through the official website. Furthermore, MAS is using a new slogan "Malaysian Hospitality" in order to highlight the hospitable services of cabin crew rather than focusing on the extension of the network and its cabin classes.