Case Study Malaysian Airlines
2.1.4 Malaysian Airlines System (MAS) after the resignation of Tajuddin.
As it is in hands of the state, MAS reported a loss of RM1.3 billion in 2005, resulting in a longer recovery plan which saw the appointment of Datuk Seri Idris Jala as the new CEO of Malaysian Airline System.
Under the appointment of Idris, the airlines was expected to dismiss about 5,000 jobs and spend a maximum of RM850 million in compensation packages as part of its plan to return to profitability then making it one of the country's biggest corporate retrenchment exercise. A days later, MAS decided it’s expectation to dismiss the entire staff and only retain about two-thirds (2/3) of them on to perform the new company, which means more than 8,000 people will lose their jobs
In 2007, it recorded a profit of RM852 million, the highest in the history of
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• Pay a high interest on the bank loan for the purchase of aircraft
• And also paying extreme-overdue salaries only for the selected management department. Although Malaysia Airlines MAS does not show the best performance, but they still paid a high salaries to them regardless of the problems that MAS has faced.
Under the various initiatives, launched together with the business turnaround plan, Malaysia Airlines switched from losses to profitability between financial year 2006 and financial year 2007. When the business turnaround plan came to an end, the airline posted a record profit of RM853 million in 2007, ending a series of losses since 2005.
Two years after Idris Jala resignation, MAS is having the most historic losses in the airline industry, which is a shocking loss of RM2.5 billion in 2011.
Some says the cause of the losses in Malaysia Airlines (MAS) is due to:
• Malaysia Airlines sees weak and unable to compete with other airlines
• Weak management
• Changes in union
• Government intervention
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