Air Transport World

Transforming Malaysia Airlines.(PROFILE)(Malaysia Airline System Bhd.)

THEY SAY THAT THE EYES ARE THE window to the soul and even to health. If the airline equivalent is its Internet site, then Malaysia Airlines is alive and well, its website brimming with bright, colorful fare promotions and special online deals. It's quite a departure from a few years ago when the carrier's future seemed much more uncertain and its website was not stacked with rotating Domestic SuperSavers.

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In fact, MAS managed consecutive profitable quarters for the September and December 2006 periods, with earnings totaling MYR361 million ($104.3 million). The stock market rewarded the momentum by sending its shares from MYR2.5 to above MYR6, causing the airline to outperform the Kuala Lumpur Exchange average by 44% last year.

Much of the credit for the improvement must go to CEO Idris Jala, a former Shell Oil executive who came to MAS on Dec. 1, 2005, after a number of government and private-market rescue efforts had failed to put the carrier on solid ground.

"When I was first appointed, the company was bleeding cash and accumulating massive losses," he recalls. In the shortened nine-month 2005 fiscal year it lost MYR1.3 billion. "If we continued on the same course and speed, Malaysia Airlines was projected to lose MYR1.7 billion by the end of 2006. If we didn't do anything, the company would have plunged into bankruptcy by mid-April 2006," he says.

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Jala hit the ground running. The company's Business Turnaround Plan was presented to the airline's board, the Malaysian Prime Minister and the Ministry of Transport on his first day on the job. "The next day, we had a town hall meeting where we gathered some 700 employees across the organization. The Prime Minister, who addressed the employees, made it very clear that the government will not bail out Malaysia Airlines. …

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