Friday, May 16, 2008

MAS: Now A Cheapo Airline

Hantu Laut

I strongly believe in free enterprise and healthy competition.You can't call it a competition anymore when the playing field is not level and your opponent hit you below the belt and the referee allows it.

The airline business is now a cut-throat business due to high operational costs andtoo many players in the market.Those with good business sense, innovative and good foresight will succeed while those who do not care to innovate, fear competition and in some cases sit on a pile of government subsidies would eventually sees its own demise.

Singapore Airlines (SIA) is today operating its first all-business class service, between its Singapore base and New York-Newark in the USA.

Flight SQ22 departed Singapore at 11:00 today and the Airbus A340-500 is due to arrive in Newark at 17:50 local time.

The carrier announced in March that it planned to switch the A340-500s to an all-business class operation seating just 100 passengers in a 1-2-1 layout. It said the change was being made as a result of higher demand from business travellers for the non-stop US services.

That's Singapore Airline.Let see where our national carrier is taking us to.

Malaysia Airlines is offering 1 million free domestic fares this month to promote its new Everyday Low Fares program, which MD and CEO Idris Jala said "will redefine the rules in the travel industry" if successful. MAS's effort to compete against low-fare giant AirAsia will feature nonrefundable one-way fares of MYR76 ($24) and MYR120 between East and West Malaysia excluding airport taxes and surcharges and will be available online at least 30 days prior to departure. Jala said there will be no loss in revenue, as the fares represent 30% of surplus seats that otherwise would go unsold.

The zero fare quoted by MAS and in comparison with AirAsia are shown below:

AirAsia (RM) MAS 0-Fare Carrier (RM)
Airport Tax + Fuel Surcharge
+ Insurance + Admin Fee 44.50 76.00
Promo Fare* 15 0
Baggage Fee** 3 0
You Pay RM 62.50 RM 76.00

Total fare:Air Asia RM62.50 MAS RM76.00

Even with minimal fare added plus baggage fee Air Asia is still cheaper than MAS.

That's besides the point.What is MAS doing competing with low-cost carrier when it has been decided it should concentrate, improve and expand its international routes and compete with such airlines as SIA,Cathay Pacific and other premier airlines.

It is hard to reconcile putting a passenger who pays say RM1058.00 to fly KK-KL return and his next seat neighbour who pays RM76.00 and get the same service and the same lousy lunch box(usually sold on non-frills airlines)in the economy class.MAS quality of food has deteriorated so much on it domestic sector even those sold on non-frills airline taste better and cheaper.

The excuse that those 30 percent of seat would be unsold anyway goes to show the airline are run by lazy people who would rather be copycats and degrade the airline status rather than taking concerted effort to promote a competitive fare and services than most full-fledged airline should be doing to attract more costumers.

The video above shows some of the surprises you can get on some of MAS planes.

The airline always seems to be getting some sort of awards especially for its in flight services more in it first and business class on international flights and certain sectors rather than a reflection of it overall quality of service.It has also one of the highest air fare in this region.

The normal domestic fare has skyrocketed.The normal return fare KK-Labuan,flight time of less than 30 minutes is now RM350.00.The normal economy fare between KK-KL and return is as shown below.

Flight From/To Time Super Saver Flex Saver Full Flex
MH2601 Kota Kinabalu
Kuala Lumpur International Airport Wed, 21 May
10:50 Sold Out MYR 329.00 MYR 529.00

Flight From/To Time Super Saver Flex Saver Full Flex
MH2604 Kuala Lumpur International Airport
Kota Kinabalu Sun, 25 May
10:05 Sold Out MYR 329.00 MYR 529.00

The return economy fare KK-KL-KK worked out to be RM1058.00.

The fare below is what my wife paid to AirAsia for her flight from Phnom Penh to KL.

1 Guest60.00 US Administration Fee 9.00 US Fuel Surcharge 20.00 US Sub Total 89.00 US
Services & Fees 1 x Xpress Boarding 2.00 US 1 x Checked Baggage 2.00 US
Sub Total 4.00 US Total Amount 93.00 US

From KL to KK

Flight 1 Guest 55.00 MY Airport Tax 6.00 MY Administration Fee 22.50 MY Fuel Surcharge 43.00 MY Sub Total 126.50 MY Services & Fees GoInsure 6.00 MY 1 x Xpress Boarding 5.00 MY 1 x Checked Baggage 6.00 MY Sub Total 17.00 MY Total Amount 143.50 MY

The total one way journey costs her RM437.50.

With such high fare it is little wonder that MAS load factor is lower than it should have been if the fare have been more competitively priced.

In the past MAS complained that most of it losses were from the domestic sector and it was supposed to give up its domestic sector in entirety.

Now, we know that was a lie and a whitewash.If that was true, why are they still keeping the domestic routes and fly parallel with Air Asia on most domestic flights.

You don't need a wiz kid to run MAS, you just need someone with the brain in the right place.

Transport Minister Ong Tee Keat said the current price war between MAS and Air Asia is a healthy competition which will benefit the nation.

That's one big bullshit.It's not healthy competition, it's unfair competition.You either no-frills or full-frills and should learn to be honorable and stick to the original agreement.

Come on MAS, you want to be a cheapo or a full-fledged airline?


Anonymous said...

we're not only seek cheap flight but also high quality services.....but still....thumbs down for airasia services..i've so many bad experiences with airasia compared to MAS

Hantu Laut said...

Air Asia is a low-cost carrier and no-frills, so don't expect any golden service.You get what you pay.

Just like the computer jargon WYSIWYG(what you see is what you get)you get no servide for the price you pay.

Not fair to compare the two airlines.

Abdul said...

Some Sabah and Sarawak history here.

Anonymous said...

why gov so protective of airasi? why not allow firefly/maswings to be mas' low-frill airlines arm in domestic and international

mas as full frill need to improve the service and food
hate mealbox serve in the night flight

SM said...


It's great what MAS is doing! I just purchased 2 tickets for my parents from Miri to KL & it only cost me RM240 (for the Airport Tax)!
Air Asia's boss is now "bitching" about MAS's chaep fare...too bad...competition is great for the Consumers.

supa said...

There were instances of major airlines creating budget subsidiaries in order to compete with other budget airlines. Generally it was done to quash competition because major airlines can afford to lose money while budget airlines cannot.

Kerajaan Rakyat said...

Saya bukan ahli politik, tetapi saya membaca sifir politik melalui pemerhatian serta pengamatan tindak-laku dan sandiwara para pelakonnya. Pelakon sandiwara politik adalah mereka yang menjadikan lapangan politik sebagai sumber pendapatannya.

Slogan dan retorik yang beraneka adalah skrip sandiwara kutu-kutu politik ini. Samada kutu-kutu ini mementaskan sandiwara politik mereka di peringkat nasional, negeri, daerah atau desa, matlamat dasar mereka adalah meraih perhatian, simpati dan sokongan rakyat demi meliliti mereka dengan kekuasaan yang lumrahnya berakhir dengan matlamat sebenar mereka – menggunungkan harta kekayaan dan wang ringgit.

Sejarah banyak membuktikan, terlalu banyak mereka yang telah berpuluh tahun berkhidmat sebagai guru atau pengetua atau pegawai PTD yang hanya mampu memiliki sebuah rumah kediaman yang sederhana dan hanya termampu memiliki kereta paling hebatpun mungkin Proton Perdana atau Honda Accord 2.0 atau Volvo secondhand.

Manusia yang sama apabila terpilih sebagai wakil rakyat samada sebagai Ahli Dewan Undangan Negeri atau Ahli Dewan Rakyat dalam jangka masa 4 atau 5 tahun telah berubah menjadi jutawan dengan hartanah, kereta dan perniagaan yang berbagai dalam nilai jutaan dan mungkin puluhan juta ringgit.

Hantu Laut said...

Many of you probably think there is something wrong with me or I am mad to oppose MAS low fare.I don't oppose the cheap fare,I opposed the way it is done.

Most Malaysians would be happy to have alternative cheap fares, so am I.

I am not looking at it from that point of view.I am looking at it from the point of business ethic, unfair competition and inconsistent government policies.

When MAS was in financial trouble the rogue businessman Tajuddin, who helm and own substantial shares in MAS managed to convince former PM Mahathir Mohammed to take back the beleaguered airline.One of the main reasons given why MAS lost so much money was due to its domestic operations where government has control over the pricing of fare.

Major portion of domestic networks are in Sabah and Sarawak which means the two states are the biggest contributor to MAS losses, which is now proven to be a lie and a whitewash.

Sabahan and Sarawakians spent more time and money travelling by air than by roads due to bad conditions of the roads in the states.

Most of the federal-funded roads are badly maintained and dangerous for those not familiar with its topography.

Most of MAS losses were due to mismanagement and without any doubts cronyism and nepotism in giving out contracts to friends and relatives. You probably still remember where a packet of nasi lemak cost the airline RM60 or RM70 per plate.

In the re-organisation of MAS, the government decided to give the domestic sector to Air Asia and MAS to concentrate on its international routes.As usual our gomen, say something and do something else.

Typical of civil servant mentality, MAS insisted and was allowed to retain the lucrative domestic routes, which as irony as it sounds,are all in East Malaysia which was earlier blamed for the losses.If this is a losing sector why fight tooth and nail to keep it?

In fact MAS gave up very little of its domestic sector.
It flies parallel with Air Asia on all major domestic routes except those with very low load factor, which was given to Air Asia under its subsidiary company.This was later handed back to MAS due to high maintainence costs of the old aircrafts taken over by Air Asia from MAS.

Even under unfair competition,volatile and overcrowded market and rising operational costs,Air Asia,through its pragmatism, innovativeness and aggressive marketing policy managed to turn a one-plane airline to what it is today, the most successful low cost carrier in this region.

Unlike SIA, our national carrier is an infant that refused to grow up and are incapable of launching new products for the travelling public.It only prides itself over it cabin service in 1st and business class even if it comes at a very high cost.

Instead of competing with the likes of SIA,Cathay and other major premier airlines, it takes the easy way out, become a copycat, copy and compete with the very same airline it copied the concept from, an airline without government cruches to prop it up in the event of financial difficulties.

Like many Malaysians I would be very happy to have more choices of cheaper fare but I think it is wrong for the government to allow MAS to sell zero fare tickets on the same plane used by its full-fare passengers.

If MAS needs to do it ,it should have used one of its subsidiaries,MASWings or Firefly.

Many would think Idris Jala is a smart man,I would say he is void of ideas and our politicians void of convictions.

Hantu Laut said...

Correction! Para 12 should read 'innovation' not innovativeness,type too fast,no such word.My apology.