Malaysia Airlines SWOT Analysis

Malaysia Airlines SWOT Analysis:
Now moving toward the SWOT analysis of Malaysia Airlines following are the major points
which come in front:
Strengths
Malaysia Airline has consistently established high standards of service across its business
segments. The group has joined the most exclusive group of world airlines, being ranked as a 5Star airline by the aviation rating organization, Skytrax, with just four other airlines in the world.
The company was honored with the Worlds Best Cabin Staff Award for 2006. Apart from the
airline operations, the company has also established its presence in the cargo operations.
MASkargo won the Excellence in Logistics Air Cargo Services award from Technology
Business Review magazine during 2006.
Malaysia Airlines have strong and well designed organizational structure. Malaysia Airlines
uncover its Business Turnaround Plan (BTP) in February 2006 which highlighted low yield, an
efficient network and low productivity. With their strong product and quality services, Malaysian
Airlines was ranked as a 5 star Airlines by SKYTRAX on par with Singapore Airlines and above
Thai Airways and Air Asia. The BTP was proven successful as profitability returned in 2007 with
a record of RM 852 million. Currently Malaysia Airlines is implementing a second round of BTP
called BTP 2 which concentrates on re-fleeting and alliance. MAS are focused on carrying out
the BTP2 plan.
Weaknesses
For the trailing twelve month (TTM) period ended March 2007, the company recorded an
operating margin of 2%, as compared to the industry average of 5.1%. Moreover, the net profit
margin of the company was 2.3% well below the industry average of 4.9% during the same
period. The below average margins might adversely affect the groups growth plans and put it at
a competitive disadvantage.
Although Malaysia Airlines did manage to turnaround their losses in 2007, their financial
performance was still mired by losses and this was proven in their 2011 first quarter loss of RM
237 million. In comparison with rivals such as Thai Airways and Singapore Airlines which
recorded almost stable profitability run and higher than Malaysian Airlines.
Opportunities
During March 2007, Malaysian Airlines secured narrow approval to launch Firefly, Malaysias
first community airline. Firefly is new low-cost community airline which currently offers 14
weekly flights to Kota Bahru, Kuantan, Kuala Terengganu and Langkawi and seven weekly
flights to Phuket and Koh Samui from Penang. It is expected to become profitable by next year
end is expected to tap into a potential customer base of 100 million in the Indonesia-MalaysiaThailand Growth Triangle. Firefly is also expected to capture the growing leisure travelers
market in the north and east coast of the Peninsula and South Thailand, flying from Penang to six
destinations that are currently not served by any other airline. It is also the only airline
connecting three popular tourist destinations - Penang, Koh Samui and Phuket. Apart from the
opportunity to grow from a new market segment, Firefly will also function as a test-bed for
Malaysia Airlines in managing a low-cost operation.
Threats
The Open Skies policy and agreements could be a potential threat if no proper planning is
carried out. Intense competition from other airlines, especially from the LCC may hit hard on
MH as a consequence to the deployment of the policy.
Volatile jet fuel prices for the past few years has already impacted most airlines including MH.
This is seen to give further pressure and threats if no mechanism on how to improve the cost,
especially on the fuel consumptions process and so forth.
As the disappearing of MH370, the unresolved issue is haunting a lot of people including firsttime flyers. Until today, there is no concrete evidence linking the tragedy with terrorist activity,
however terrorism is known to be the biggest threat in the aviation industry.
In realization of the goals, a SWOT analysis to capture the key strengths and weaknesses of the
airline and describe the opportunities and threats facing the airline is further discussed as
follows;
Strengths
-
Strong brand recognition

World-renowned employees and
awards winning airline

Diversified geographic spread
Robust fleet base
Strong support by The Government
Opportunities
Rebranding, improve presence

The enactment of MAS Act
Benefit from joining oneworld
alliance
Suppliers new contract renegotiation
Open Skies
Weaknesses
-
Weak financial performance

High Costs, low margins
Limited market share growth
Unprofitable routes
Ineffective Utilization
Threats
Intense competition
Regulatory conditions
Rising fuel costs
Foreign currency fluctuation
Terrorism

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What are some of Malaysia Airlines' strengths according to the SWOT analysis?

What are some of the weaknesses mentioned in the SWOT analysis?

Malaysia Airlines SWOT Analysis:

Strong brand recognition

awards winning airline

Rebranding, improve presence

Weak financial performance

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