ANNUAL REPORT - ChartNexus

2009 

A N N U A L R E P O R T

Our Vision 

To be The World’s Five Star Value Carrier (FSVC). 

Our Mission 

To be a consistently profitable airline. 

Our Customer Value Proposition 

To deliver Malaysian Hospitality, hassle free all the way, 

and in doing so reflect our nation’s highest ambitions. 

Our Brand Promise 

MH. 

More than just an airline code. 

It is where everything comes from the heart. 

Where different cultures and needs are understood. 

And respect is not learnt from a training manual. 

It is us treating everyone like a guest in our home. 

And ensuring smooth journeys all the way. 

This is MH. 

MH is Malaysian Hospitality.

Contents 

2 Journey of Transformation 

6 Notice of Annual General Meeting 

8 Statement Accompanying the Notice of Annual General Meeting 

9 Corporate Information 

10 Group Structure 

11 Board of Directors 

20 Senior Management 

28 Financial and Statistical Highlights 

38 Chairman’s Statement 

42 Managing Director’s Statement 

50 Operational Review 

54 Route Network 

58 Details of Board of Directors’ Meeting 

59 Audit Committee Report 

63 Statement of Internal Control 

68 Statement of Corporate Governance 

84 Statement of Corporate Social Responsibility 

88 List of Company Properties 

91 Analysis of Shareholdings 

104 Financial Report 

232 Corporate Directory 

234 Appendix 

235 Proxy Form

2 

MALAYSIAN AIRLINE SYSTEM BERHAD (10601-W) 

BTP 2 Journey 2009 

ELF: ‘Weekend Specials 

launched’ 

Enrich - GOM programme 

launched 

Malaysia Airlines Travel Fair 

(MATF) 2009 

oneMH - Serve Customers, 

Make Money, Save Money 

(SMS) launched 

ELF: ‘Weekend Specials’ 

launched 

MH Value Fares goes 

international 

RM244mil profit for FY2008 

Jet Airways - MH codeshare 

MH Big Sweep 

Frost & Sullivan Award 

for E & M 

GMR, India joint 

venture with E & M 

MATTA Fair 2009 

Skytrax World’s 

Best Cabin Staff 

5 Star Airline 

Italian Award for MD/CEO 

Get-A-Deal/MAS Family 

Programme 

Best Air Cargo Carrier 2009 (Asia) 

Memorandum of Agreement with 

2 foundations in Terengganu and 

Kota Bahru for aircraft engineers & 

pilot training 

MAS Ticket Office at 

Jan Mar 

May 

Feb Apr 

SkyPark Terminal opens 

MAS Stimulus Package 

Jun 

2nd MATF & Global 

Low Fares 

MAS 36th Annual 

General Meeting 

Q1 Financial Results 

IATA 65th AGM - 

MAS is host

New purchase of Avient- 

crew system for Crew 

Planning & Deployment 

Launch of Business 

First product 

Jul 

Asean Pass launched 

Tribute to Tun Razak 

menu launched 

Airline of the year 2008 

Award for MASkargo 

Dato’ Sri Idris Jala 

appointed as Minister in 

the PM’s department 

Tengku Dato’ Azmil 

Zahruddin appointed as 

Managing Director 

New freighter route 

for MASkargo 

Senai - Narita 

Best Inflight Meals in 

Economy Class 2008 

JAL Award for 

MASkargo 

Sept 

Mini Townhall with 

Tengku Dato’ Azmil 

Zahruddin 

First Boeing 777 

operates to LAX 

MAS & Mercy sign 

a 3-year MoU under 

programme ‘Change 

for Charity’ 

PSS2: Cutover 

successful 

MAS moves from 

Terminal 3 to Terminal 

4 in London Heathrow 

Asia’s Leading Airline 

by World Travel 

Awards 2009 

Nov 

Annual Report 2009 

BTP 2 JOURNEY 2009 

Aug Oct Dec 

LIMA 2009 

Announcement of 

rights issue and 

aircraft acquisition 

Flymas.mobi launched 

3

4 

MALAYSIAN AIRLINE SYSTEM BERHAD (10601-W)


Making reservations easy 

with a wide choice of 

ticketing channels to suit 

everyone’s needs. 

PURCHASE 

5

6 


Notice of Annual General Meeting 

NOTICE IS HEREBY GIVEN THAT the Thirty Ninth Annual General Meeting of Malaysian Airline System Berhad will be held at 

the Auditorium, 1st Floor, South Wing, MAS Academy, No. 2 Jalan SS7/13, Kelana Jaya, 47301 Petaling Jaya, Selangor Darul 

Ehsan on Monday, 21 June 2010 at 10.00 a.m. for the following purposes:- 

AGENDA 

AS ORDINARY BUSINESS 

1. To receive the Audited Financial Statements for the financial year ended 31 December 2009 and the Reports of 

Directors and Auditors thereon. 

2. To re-elect the following Directors who retire pursuant to Article 139 of the Company’s Articles of Association, 

and who, being eligible, offer themselves for re-election:- 

(i) Dato’ Mohamed Azman bin Yahya 

(ii) Tengku Dato’ Azmil Zahruddin bin Raja Abdul Aziz 

(iii) Datuk Seri Panglima Mohd Annuar bin Zaini 

3. To consider and if thought fit, to pass the following Ordinary Resolution pursuant to Section 129(6) of the 

Companies Act, 1965:- 

“THAT Dato’ N. Sadasivan a/l N. N. Pillay, retiring pursuant to Section 129(6) of the Companies Act, 1965, be 

and is hereby re-appointed a Director of the Company to hold office until the next Annual General Meeting.” 

4. To approve the payment of Directors’ fees for the financial year ended 31 December 2009. 

5. To re-appoint Messrs. Ernst & Young as Auditors of the Company for the financial year ending 31 December 

2010 and authorise the Directors to fix their remuneration. 

AS SPECIAL BUSINESS 

To consider and if thought fit, to pass the following Ordinary Resolution:- 

6. Authority to Allot and Issue Shares 

“THAT subject to the Companies Act, 1965 (the Act), the Articles of Association of the Company, approval 

from the Bursa Malaysia Securities Berhad and other government or regulatory bodies, where such approval is 

necessary, full authority be and is hereby given to the Board of Directors pursuant to Section 132D of the Act, 

to issue shares in the capital of the Company at any time upon such terms and conditions and for such purposes 

as the Directors may in their discretion deem fit, provided always that the aggregate number of shares to be 

issued shall not exceed 10% of the issued share capital of the Company and that such authority shall continue 

to be in force until the conclusion of the next Annual General Meeting of the Company.” 

To consider and if thought fit, to pass the following Special Resolution:- 

7. Proposed Amendments to the Articles of Association 

“THAT the proposed amendments to the Articles of Association of the Company as contained in the Appendix 

1 attached to the Annual Report 2009 be and are hereby approved AND THAT the Directors of the Company be 

and are hereby authorised to assent to any modifications, variations and/or amendments as may be considered 

necessary to give full effect to the Proposed Amendments to the Articles of Association of the Company.” 

8. To transact any other ordinary business for which due notice has been given. 

BY ORDER OF THE BOARD 

SHAHJANAZ BINTI KAMARUDDIN 

(LS 0009441) 

Company Secretary 

27 May 2010 

Selangor Darul Ehsan 

Resolution 1 

Resolution 2 

Resolution 3 

Resolution 4 

Resolution 5 

Resolution 6 

Resolution 7 

Resolution 8 

Resolution 9 

Resolution 10

ExPLANATORY NOTES ON SPECIAL BUSINESS 

Ordinary Resolution 8 

Resolution pursuant to Section 132D, Companies Act, 1965. 


NOTICE OF ANNUAL GENERAL MEETING 

Ordinary Resolution 8, if passed, will empower the Directors to issue shares in the Company up to an amount not exceeding in total 

10% of the issued share capital of the Company, subject to compliance with the relevant regulatory requirements. The approval is 

sought to avoid any delay and cost in convening a general meeting for such issuance of shares. This authority, unless revoked or 

varied by the Company at a general meeting, will expire at the next Annual General Meeting. 

Special Resolution 9 

Special Resolution 9 on the Proposed Amendments to the Articles of Association of the Company refers to the payment of dividend, 

interest or other moneys payable in cash directly by electronic transfer into shareholders’ accounts opened and maintained with a 

financial institution based in Malaysia. This would promote greater efficiency and align the payment system to the national agenda 

of migrating to electronic payment. 

In addition, the Special Resolution 9, if passed, will bring the Articles of Association of the Company in line with the recent 

amendments to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. 

Please refer to Appendix 1 in the Annual Report 2009 for details on the Proposed Amendments to the Articles of Association. 

Notes: 

1. A member entitled to attend and vote at the Meeting is entitled to appoint more than two (2) proxies to attend and vote in his 

stead. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without 

limitation and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. 

2. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing 

or, if the appointer is a corporation, either under its seal or under the hand of an officer or attorney duly authorised. 

3. A holder may appoint more than two (2) proxies to attend the Meeting. Where a member appoints two (2) or more proxies, 

he shall specify the proportion of his shareholding to be represented by each proxy. 

4. The right of foreigners to vote in respect of their deposited securities is subject to Section 41(1)(e) and Section 41(2) of the 

Securities Industry (Central Depositories) Act, 1991 and the Securities Industry (Central Depositories) (Foreign Ownership) 

Regulations, 1996. The position of such Depositors in this regard will be determined based on the General Meeting Record 

of Depositors. Such Depositors whose shares exceed the Company’s foreign shareholding limit of 45% as at the date of the 

General Meeting Record of Depositors may attend the above Meeting but are not entitled to vote. Consequently, a proxy 

appointed by such Depositor who is not entitled to vote will also not be entitled to vote at the above Meeting. 

5. The instrument appointing a proxy must be deposited at Symphony Share Registrars Sdn. Bhd., Level 6, Symphony House, 

Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia, not less than 48 hours before 

the time for holding the Meeting or at any adjournment thereof. 

6. Shareholders’ attention is hereby drawn to the Listing Requirements of Bursa Malaysia Securities Berhad, which allows a 

member of the Company who is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 

1991, to appoint at least one (1) proxy in respect of each securities account he holds with ordinary shares of the Company 

standing to the credit of the said securities account. 

7

8 


Statement Accompanying the 

Notice of Annual General Meeting 

1. Directors ranking for retirement and re-election at the 39 th Annual General Meeting: 

The profile of the Directors who are standing for re-election or re-appointment under Ordinary Resolutions 2 to 4 are set out 

on pages 14 to 19 of this Annual Report. 

2. The above Directors’ direct interests in the securities of the Company as at 15 April 2010: 

Direct Interest 

Name of Directors No. of Issued Shares % of Issued Shares 

Dato’ Mohamed Azman bin Yahya Nil Nil 

Tengku Dato’ Azmil Zahruddin bin Raja Abdul Aziz 2,707,438* 0.08* 

Datuk Seri Panglima Mohd Annuar bin Zaini Nil Nil 

* Share options granted under MAS ESOS

Corporate Information 

COMPANY SECRETARY 

Shahjanaz binti Kamaruddin (LS 0009441) 

REGISTERED OFFICE 

3 rd Floor, Administration Building 1 

MAS Complex A 

Sultan Abdul Aziz Shah Airport 

47200 Subang 

Selangor Darul Ehsan, Malaysia 

Tel: 603 7840 4550 

Fax: 603 7846 3932 

Website: www.malaysiaairlines.com 

AUDITORS 

Ernst & Young (AF 0039) 

Chartered Accountants 

Level 23A, Menara Milenium 

Jalan Damanlela 

Pusat Bandar Damansara 

Damansara Heights 

50490 Kuala Lumpur 

Malaysia 

Tel: 603 7495 8000 

Fax: 603 2095 9076 

REGISTRAR 

Symphony Share Registrars Sdn. Bhd. 

(378993-D) 

Level 6, Symphony House 

Pusat Dagangan Dana 1 

Jalan PJU 1A/46 

47301 Petaling Jaya 

Selangor Darul Ehsan 

Malaysia 

Tel: 603 7841 8000 

Fax: 603 7841 8151 

INVESTOR RELATIONS 

Aisyatul Aizzura Salha binti Ab Rahim 

Communications Division 

Ground Floor, Administration Building 1 

MAS Complex A 

Sultan Abdul Aziz Shah Airport 

47200 Subang 

Selangor Darul Ehsan, Malaysia 

Tel: 603 7840 4523 

Fax: 603 7847 3085 

investor@malaysiaairlines.com 

STOCK EXCHANGE LISTING 

Main Market of Bursa Malaysia 

Securities Berhad 

(Listed since 16 December 1985) 

(Stock code: 3786) 

PRINCIPAL BANKERS 

Citibank Berhad (297089-M) 

Menara Citibank 

165 Jalan Ampang 


Malaysia 

Malayan Banking Berhad (3813-K) 

Menara Maybank 

100 Jalan Tun Perak 


Malaysia 

CIMB Bank Berhad (13491-P) 

5 th Floor, Bangunan CIMB 

Jalan Semantan 

Damansara Heights 


Malaysia 


CORPORATE INFORMATION 

Financial 

Calendar 

26 February 2009 

Announcement of FY 

2008 Annual Results 

12 June 2009 

Announcement of 2009 

First Quarter Results 

06 August 2009 


Second Quarter Results 

25 November 2009 


Third Quarter Results 

9 

22 December 2009 

Announcement of Rights 

Issue & aircraft acquisition 

25 January 2010 

Extraordinary General 

Meeting 

22 February 2010 

Announcement of FY 

2009 Annual Results 

12 March 2010 

Listing of Rights Shares 

8 April 2010 

Payment of Tax-Exempt 

Non-cumulative 

Preferential Dividend 

21 June 2010 

Annual General Meeting

10 


Group Structure 


80% Abacus Distribution Systems (Malaysia) Sdn. Bhd. (180535-T) 

51% Aerokleen Services Sdn. Bhd. (277266-X) 

100% FlyFirefly Sdn. Bhd. (346606-K)* 

* Flyfirefly Sdn. Bhd. owns 100% equity in Flyfirefly Holiday Sdn. Bhd. (780113-P) 

100% Kelip-Kelip Labuan Limited (LL06736) 

100% Kelip-Kelip II Labuan Limited (LL07075) 

100% Kelip-Kelip III Labuan Limited (LL07638) 

100% Kelip-Kelip II Cayman Limited (WK-225671) 

100% MASkargo Logistics Sdn. Bhd. (68121-P) 

100% Malaysia Airlines Capital (L) Limited (LL01132) 

100% Malaysia Airlines Cargo Sdn. Bhd. (318815-M) 

100% MAS Academy Sdn. Bhd. (317184-W) 

60% MAS Catering (Sarawak) Sdn. Bhd. (372384-D) 

100% MAS Golden Boutiques Sdn. Bhd. (317182-T) 

100% MAS Golden Holidays Sdn. Bhd. (317144-A) 

100% MASwings Sdn. Bhd. (773841-A) 

100% MAS Aerotechnologies Sdn. Bhd. (317185-K) 

100% Malaysian Aerospace Engineering Sdn. Bhd. (775412-D) 

* Malaysian Aerospace Engineering Sdn. Bhd. owns 50% equity in 

MAS GMR Aerospace Enginering Company Private Limited 

100% Macnet CCN (M) Sdn. Bhd. (318626-W) under Members Voluntary Winding Up 

100% Syarikat Pengangkutan Senai Sdn. Bhd. (39752-P) 

INVESTMENT IN ASSOCIATES 

30% GE Engine Services Malaysia Sdn. Bhd. (423679-X) 

49% Hamilton Sundstrand Customer Support Centre (M) Sdn. Bhd. (301833-D) 

30% Honeywell Aerospace Services (M) Sdn. Bhd. (465037-M) 

30% LSG Sky Chefs-Brahim’s Sdn. Bhd. (317281-X) 

24% Pan Asia Pacific Aviation Services Limited (470740) 

20% Taj Madras Flight Kitchen Limited (30706 State Code 18)

Board of Directors 

Tan Sri Dr. Mohd. Munir bin Abdul Majid 

Chairman, Non-Independent Non-Executive Director 

Dato’ N. Sadasivan a/l N. N. Pillay 

Deputy Chairman, Independent Non-Executive Director 

Tengku Dato’ Azmil Zahruddin bin Raja Abdul Aziz 

Managing Director/Chief Executive Officer, Non-Independent Executive Director 

Keong Choon Keat 

Independent Non-Executive Director 

Dato’ Mohamed Azman bin Yahya 

Non-Independent Non-Executive Director 

Martin Gilbert Barrow 


Datuk Seri Panglima Mohd. Annuar bin Zaini 


Tan Sri Datuk Seri Dr. Wan Abdul Aziz bin Wan Abdullah 


Datuk Haji Yusoff bin Datuk Haji Mohamed Kassim 


Datuk Amar Wilson Baya Dandot 


Dato’ Puteh Rukiah binti Abd. Majid 

Alternate Director to Tan Sri Datuk Seri Dr. Wan Abdul Aziz bin Wan Abdullah 

Dato’ Haji Abdul Rahman bin Haji Abdul Ghani 

Alternate Director to Datuk Haji Yusoff bin Datuk Haji Mohamed Kassim 

Datuk Amar Haji Mohamad Morshidi bin Abdul Ghani 

Alternate Director to Datuk Amar Wilson Baya Dandot 


BOARD OF DIRECTORS 

11

Board of Directors

1 

9 

6 

5 4 

10 7 

8 

2 

3 

1 Tan Sri Dr. Mohd Munir bin Abdul Majid 

2 Dato’ N. Sadasivan a/l N.N. Pillay 

3 Tengku Dato’ Azmil Zahruddin bin Raja Abdul Aziz 

4 Keong Choon Keat 

5 Dato’ Mohamed Azman bin Yahya 

6 Martin Gilbert Barrow 

7 Datuk Seri Panglima Mohd. Annuar bin Zaini 

8 Tan Sri Datuk Seri Dr. Wan Abdul Aziz bin Wan Abdullah 

9 Datuk Haji Yusoff bin Datuk Haji Mohamed Kassim 

10 Datuk Amar Wilson Baya Dandot

14 


Board of Directors’ Profile 

Tan Sri Dr. Mohd. Munir bin Abdul Majid 

Chairman, Non-Independent Non-Executive Director 

Tan Sri Dr. Mohd Munir bin Abdul Majid, aged 62, a Malaysian, 

joined the Board of Directors of MAS on 1 June 2004. He 

was appointed Non-Independent Non-Executive Chairman 

on 1 August 2004. He serves as Chairman of the Nomination 

Committee. 

He obtained a Bachelor of Science (Economics) degree from 

the London School of Economics and Political Science (LSE) in 

1971 and went on to earn a Ph.D in International Relations in 

1978. During his years in London, he taught at the Department 

of International Relations in LSE and worked as a research 

analyst at Daiwa Europe NV. 

Upon his return to Malaysia in 1978, Tan Sri Dr. Mohd 

Munir joined the News Straits Time Press as leader writer, 

ending his service there as Group Editor in 1986. He took 

on the appointment of Chief Executive Officer of a merchant 

bank, Pertanian Baring Sanwa, (which was renamed Commerce 

International Merchant Bankers Berhad), later becoming its 

Executive Chairman. He was the first and founding Chairman 

of the Securities Commission where he served from 1993 to 

1999. 

He has served on various governmental boards and 

committees, such as the Malaysian Investment Development 

Authority (MIDA) (formerly known as Malaysian Industrial 

Development Authority), Bursa Malaysia Securities Berhad 

(formerly known as The Kuala Lumpur Stock Exchange), 

Foreign Investment Committee (FIC), as well as various private 

sector companies and organisations such as Kuala Lumpur 

Options and Financial Futures Exchange (KLOFFE), Council 

of the Association of Merchants Malaysia and the Malaysian 

International Chamber of Commerce and Industry. He was also 

the founding President of the Kuala Lumpur Business Club and 

was appointed by the Malaysian Institute of Management to 

be a member of its Court of Fellows in May 2004. In December 

2005, he was made an Honorary Fellow of the London School 

of Economics and Political Science (LSE) and subsequently as a 

Visiting Senior Fellow at the LSE IDEAS (Centre or the Study of 

International Affairs, Diplomacy and Strategy) in October 2008. 

He is President of the LSE Alumni Association of Malaysia. 

He presently sits on the Advisory Board for Securities Market 

Regulation of the Toronto Centre for Leadership in Financial 

Market Regulation. He is a member of the International Institute 

for Strategic Studies (IISS) in London. 

He was the Senior Independent Non-Executive Director 

of Telekom Malaysia Berhad (2000 – 2004), the Chairman of 

Celcom (Malaysia) Berhad and Technology Resources Industries 

Berhad (2002 – 2004). 

He is currently the Chairman of Bank Muamalat Malaysia 

Berhad. 

He has attended all 14 Board Meetings of the Company 

held during the financial year. 

Dato’ N. Sadasivan a/l N. N. Pillay 

Deputy Chairman, Independent Non-Executive Director 

Dato’ N. Sadasivan, aged 70, a Malaysian, joined the Board 

of Directors of MAS on 1 December 2001. He was appointed 

Independent Non-Executive Deputy Chairman on 20 July 2004. 

He is the Chairman of the Board Tender Committee and member 

of the Board Audit Committee, Nomination Committee and 

Remuneration Committee. He is also Chairman of Malaysia 

Airlines Cargo Sdn. Bhd. 

He holds a Bachelor of Arts (Hons) degree in Economics 

from University of Malaya. He started his early career as an 

economist with the Economic Development Board Singapore 

until 1967. He subsequently served in various capacities with the 

Malaysian Industrial Development Authority (MIDA) until 1995. 

His last position with MIDA was as its Director-General. Upon 

his retirement, he set up a consultancy firm, SKA Management 

Consultants Sdn. Bhd. where he is the Executive Chairman. 

He sits on the Boards of Bank Negara Malaysia, Petronas Gas 

Berhad, Leader Universal Holdings Berhad, APM Automotive 

Holdings Berhad and Yeo Hiap Seng (Malaysia) Berhad. 


held during the financial year.


Managing Director/Chief Executive Officer, Non-Independent Executive Director 

Tengku Dato’ Azmil, aged 39, a Malaysian, is currently the 

Managing Director/Chief Executive Officer of MAS, a position 

he held since 28 August 2009. He was first appointed to the 

Board of MAS on 23 August 2004, subsequently as Executive 

Director of MAS on 23 August 2005 and Chief Financial Officer 

of MAS on 1 February 2006. He is also a member of the Board 

Safety & Security Committee. 

He holds a double first class degree in Economics from 

the University of Cambridge. He is a Chartered Accountant 

and an associate member of the Malaysian Institute of 

Accountants and the Institute of Chartered Accountants in 

England and Wales. He is also an Associate of the Association 

of Corporate Treasurers, United Kingdom. Upon graduating, 

he was attached to the Audit and Business Advisory Services 

Division in PricewaterhouseCoopers in London and Hong Kong 

specialising in banking and capital markets. In 2002, he took up 

the position of Chief Financial Officer in Penerbangan Malaysia 

Berhad, and subsequently was appointed its Managing Director/ 

Chief Executive Officer in 2004. 

He does not hold any directorships in other public 

companies. 

He is also a member of the Issues Committee of the 

Malaysian Accounting Standards Board. 


held during the financial year. 

Keong Choon Keat 




Mr. Keong Choon Keat, aged 65, a Malaysian, was appointed 

as an Independent Non-Executive Director of MAS on 16 April 

2001. He serves as Chairman of the Board Audit Committee 

and is a member of the Nomination Committee, Remuneration 

Committee and ESOS Committee. 

He is a member of the Malaysian Institute of Accountants 

and Malaysian Institute of Certified Public Accountants. He is 

also a Fellow Member of the Institute of Chartered Accountants 

in England and Wales. He was attached to Bristol Myers & 

Company Ltd in England as an Accountant in 1968. He then 

joined Malaysian Tobacco Company Berhad as an accountant in 

1969. From 1974 to 1999, he was attached to UMW Holdings 

Group, where he held various management positions from 

General Manager to Director Group Accounts before being 

promoted to the position of Executive Director in 1988. Upon 

retirement in 1999, he joined a consultancy firm providing out 

placement and career management services in Malaysia. 

He sits on the Boards of JT International Berhad, Chin Teck 

Plantations Berhad, Negri Sembilan Oil Palms Berhad and Crest 

Builder Holdings Berhad. 

He has attended 13 out of the 14 Board Meetings of the 

Company held during the financial year. 

15

16 


Dato’ Mohamed Azman bin Yahya 


Dato’ Azman, aged 46, was appointed as a Non-Independent 

Non-Executive Director of MAS on 1 December 2001. He serves 

as Chairman of the Remuneration Committee and also as a 

member of the Nomination Committee and ESOS Committee. 

He holds a First Class Honours degree in Economics from 

the London School of Economics and Political Science (LSE) 

and is a member of the Institute of Chartered Accountants in 

England and Wales, the Malaysian Institute of Accountants and 

a Fellow of the Malaysian Institute of Banks. 

His career appointments include auditing with KPMG 

in London, finance with Island & Peninsular Group and 

investment banking with Amanah Merchant Bank. In 1998, he 

was appointed by the Government of Malaysia to set up and 

head Danaharta Nasional Berhad and subsequently became 

its Chairman until 2003. He was also the Chairman of the 

Corporate Debt Restructuring Committee, which was set up by 

Bank Negara Malaysia until its closure in 2002. 

He is currently the Group Chief Executive and a Board 

member of Symphony House Berhad, a listed outsourcing 

group and is the Executive Chairman of Bolton Berhad, a listed 

property group. 

Outside his professional engagements, Dato’ Azman is 

active in public service. He sits on the Boards of a number of 

Government Linked Corporations namely Khazanah Nasional 

Berhad, the investment arm of the Malaysian Government, 

PLUS Expressways Berhad and Pharmaniaga Berhad. He also 

serves as a member of the Bursa Malaysia Securities Market 

Consultative Panel, the National Council for Scientific Research 

& Development, the National Innovation Council, the Special 

Task Force to facilitate business (PEMUDAH) and the Financial 

Reporting Foundation. He is also a Director of Scomi Group 

Berhad and Ekuiti Nasional Berhad; and Chairman of the 

Motorsports Association of Malaysia. 



Martin Gilbert Barrow 


Martin Gilbert Barrow, aged 66, a British citizen, was appointed 

as an Independent Non-Executive Director of MAS on 29 

August 2001. He serves as Chairman of the Board Safety & 

Security Committee. 

Mr. Barrow obtained Oxford and Cambridge Examination 

“A” Levels in Science and Mathematics and subsequently 

attended courses in Finance and Marketing. He joined Jardine 

Matheson, Hong Kong in 1965. From 1975 to 1980, he was 

transferred to Japan as Managing Director of the Group’s 

operations in Japan. He was promoted to the position of 

President of the Group’s affiliate, Olayan Saudi Holding 

Company in Saudi Arabia in 1980. He returned to Hong Kong as 

Regional Managing Director of the Group’s operation in Hong 

Kong and China in 1983 and was appointed Director of Jardine 

Matheson Limited at its Group Head Office in 1989. He was 

also active in public service and was appointed by the Governor 

of Hong Kong as Member of the Legislative Council from 1988 

to 1995. Other public-related positions he had held included 

being a member of Hong Kong’s Aviation Advisory Board, 

member of the New Airport’s Steering Group, Chairman of the 

Hong Kong Tourist Association and Chairman of the Business 

Advisory Group Committee on Deregulation. He retired from 

Jardine Matheson in June, 2001. 

He does not hold any directorship in other public companies 

in Malaysia. 


Company held during the financial year.

Datuk Seri Panglima Mohd Annuar bin Zaini 


Datuk Seri Panglima Mohd Annuar bin Zaini, aged 58, a 

Malaysian, was appointed as Independent Non-Executive 

Director of MAS on 2 February 2005. He is a member of the 

Board Tender Committee. 

He holds a Master of Arts in Law & Diplomacy from the 

Fletcher School of Laws & Diplomacy, Tufts University, USA; and 

a Bachelor of Arts with honours in Economics from University 

Kebangsaan Malaysia. 

He began his career in the government service as an 

Administrative and Diplomatic Officer in 1977. He served the 

Malaysian Government at various ministries and departments. 

In 1993, he was appointed General Manager of the Perak 

Foundation, a position he held until 1999 before he chose to 

take an optional retirement from the government service. 

He was Advisor and Chief Executive of the Northern 

Corridor Implementation Authority from 2007 to 2009. He was 

the Chairman of Malaysian National News Agency (BERNAMA) 

from February 2004 to January 2010. In February 2004, HRH 

The Sultan of Perak consented his appointment as Member of 

the Council of Elders to HRH Sultan of Perak. He is a member 

of the Perak Council of Islamic Religion and Malay Customs. 

He is also a Distinguished Fellow to the Institute of Strategic 

and International Studies (ISIS) Malaysia, Adjunct Professor of 

Northern Corridor Economic Region Research Centre, Universiti 

Utara Malaysia and Member of the Advisory Board of the Public 

Complaints Bureau of the Prime Minister’s department. 

He sits on the Boards of Plus Expressways Berhad and Dijaya 

Corporation Berhad. 

He attended 12 out of the 14 Board Meetings of the 




17 

Tan Sri Datuk Seri Dr. Wan Abdul Aziz bin Wan Abdullah 


Tan Sri Datuk Seri Dr. Wan Abdul Aziz, aged 58, a Malaysian, 

was appointed as Non-Independent Non-Executive Director of 

MAS on 20 March 2007. 

He holds a Bachelor of Economics (Honours) degree in 

Applied Economics from University of Malaya and a Master 

of Philosophy in Development Studies from the Institute of 

Development Studies, University of Sussex, United Kingdom. 

He went on to earn a Ph.D in Economics from the School of 

Business and Economic Studies, University of Leeds, United 

Kingdom. In 2004, he attended the Advanced Management 

Programme at Harvard Business School, Harvard University. 

He began his career in the Administrative and Diplomatic 

Service as Assistant Director of the Economic Planning Unit 

in the Prime Minister’s Department in 1975. He was later 

promoted to the position of Senior Assistant Director, Macroeconomics 

in 1984, Senior Assistant Director, Human Resource 

Section and Director, Energy Section in 1988. In the same year, 

he was seconded to the World Bank Group in Washington DC, 

USA, representing Brunei Darussalam, Fiji, Indonesia, Laos PDR, 

Malaysia, Myanmar, Nepal, Singapore, Thailand, Tonga and 

Vietnam as Alternate Executive Director. He then served the 

Ministry of Finance as Deputy Secretary in the Economics and 

International Division in 2001. He later returned to the Economic 

Planning Unit in the Prime Minister’s Department as Deputy 

Director General, Macro Planning Division in 2004. In 2005, he 

was appointed Deputy Secretary General of Treasury (Policy), 

Federal Treasury in the Ministry of Finance. He is currently the 

Secretary General of Treasury in the Ministry of Finance. 

Tan Sri Datuk Seri Dr. Wan Abdul Aziz is Chairman of 

the Inland Revenue Board, Kumpulan Wang Persaraan 

(Diperbadankan) (KWAP), Cyberview Sdn. Bhd., Pembinaan 

BLT Sdn. Bhd. Bintulu Port Holdings Berhad and Kuala Lumpur 

International Airport Berhad. He also sits on the Board of Federal 

Land Development Authority (FELDA), Petroliam Nasional 

Berhad (PETRONAS), MISC Berhad, Syarikat Bekalan Air 

Selangor Sdn. Bhd. (SYABAS), Pelaburan Hartanah Bumiputera 

Berhad, Bank Negara Malaysia, and Malaysia Deposit Insurance 

Corporation (PIDM). 

He also represents the Ministry of Finance as Member of 

Economic Council, PEMUDAH, Iskandar Malaysia, Regional 

Corridor Development Authority (RECODA) Sarawak, Sabah 

Economic Development and Investment Authority (SEDIA) and 

East Coast Economic Region (ECER). 


Company held during the financial year.

18 


Datuk Haji Yusoff bin Datuk Haji Mohamed Kassim 


Datuk Haji Yusoff, aged 60, a Malaysian, is an Independent 

Non-Executive Director of MAS and was appointed to the Board 

of Directors of MAS on 23 January 2006. 

He holds a Bachelor of Economics from University of 

Adelaide, Australia and attended the Public Budgeting and 

Financial Management programme at the John F. Kennedy 

School of Government, Harvard University, USA. He began his 

career in Sabah’s Public Services as Assistant Director in the State 

Economic Planning Unit in 1979. He had also served as District 

Officer, Beaufort, Sabah in 1982. From 1984 to 1994 he held 

various positions within the Chief Minister’s Department and 

the Ministry of Industrial Development, Sabah. In July 1994, he 

held the post of Director of State Budget in Ministry of Finance 

and subsequently served as the Permanent Secretary of the 

Ministry of Finance until 31 January 2010. 

He sits on the Boards of Saham Sabah Berhad, Kojasa 

Holdings Berhad and Sabah Development Bank Berhad and 

as Chairman of Yayasan Usaha Maju as well as Tabin Wildlife 

Holidays Sdn Bhd. 



Datuk Amar Wilson Baya Dandot 


Datuk Amar Wilson Baya Dandot, aged 58, a Malaysian, was 

appointed as an Independent Non-Executive Director of MAS 

on 11 January 2008. He is a member of the Board Safety & 

Security Committee and the Board Audit Committee. 

He holds a Bachelor of Economics from University of 

Western Australia and a Master in Development Economics from 

University of Sussex, United Kingdom. He also attended a Senior 

Executive Fellows Programme at JFK School of Government, 

Harvard University. He first joined the Sarawak State 

Government Office as the Assistant Secretary of State Planning 

Unit in 1973. He was an Economist of the International Pepper 

Community, Jakarta in 1977 to 1983, and later became the 

Principal Assistant Secretary in the State Planning Unit in 1983. 

In 1990, he was appointed as Deputy Director, State Planning 

Unit, Sarawak. He later assumed the position of Director, State 

Planning Unit in 1995 and Deputy State Secretary (Planning & 

Development) in 2000. He was then appointed as Deputy State 

Secretary (Human Resource) and was subsequently appointed 

as Deputy State Secretary (Administration, Security & Protocol) 

at the Chief Minister’s Department. In 2007, he was appointed 

the Sarawak State Secretary. He is currently the Chief Executive 

Officer, Sarawak Regional Corridor Development Authority 

(RECODA). 

He sits on the Boards of Sarawak Energy Berhad, Sarawak 

Economic Development Corporation Berhad and the Malaysian 

Institute of Research. He also sits on the Board of other Sarawak 

State Government Link Companies. 



Dato’ Puteh Rukiah binti Abd Majid 

Alternate Director to Tan Sri Datuk Seri Dr. Wan Abdul Aziz bin Wan Abdullah 

Dato’ Puteh Rukiah, aged 57, a Malaysian, was appointed as 

Alternate Director to Tan Sri Datuk Seri Dr. Wan Abdul Aziz bin 

Wan Abdullah on 16 August 2007. 

She holds a Bachelor of Economics degree from University 

of Malaya and a Master of Economics from Western Michigan 

University, USA. She has held various posts in the Malaysian 

Government since 1976 and her various appointments 

included being the Deputy Undersecretary, Privatisation and 

Public Enterprise Division in 2000 of the Ministry of Finance 

(Incorporated), and subsequently, until 2006, served as Undersecretary, 

Investment and Privatisation Division, of the Ministry 

of Finance (Incorporated). Currently, she is the Deputy Secretary 

General (Systems and Controls), at the Ministry of Finance. 

She sits on the Boards of Tenaga Nasional Berhad, 

Perbadanan Usahawan Nasional Berhad, Pengurusan Aset 

Air Berhad, Penerbangan Malaysia Berhad and Perbadanan 

Hartanah Berhad (formerly known as Pelaburan Hartanah 

Bumiputera Berhad). 

She has attended 2 out of the 14 Board Meetings of the 

Company during the financial year on behalf of Tan Sri Datuk 

Seri Dr. Wan Abdul Aziz bin Wan Abdullah.

Dato’ Haji Abdul Rahman bin Haji Abdul Ghani 

Alternate Director to Datuk Haji Yusoff bin Datuk Haji Mohamed Kassim 

Dato’ Haji Abdul Rahman bin Haji Abdul Ghani, aged 58, a 

Malaysian was appointed as Alternate Director to Datuk Haji 

Yusoff bin Datuk Haji Mohamed Kasim on 23 January 2006. 

He graduated with a Bachelor of Arts degree from the 

University of Queensland, Australia. He began his career in the 

civil service as Penolong Penguasa Kastam at the Royal Customs 

and Excise Department 1977. He then served in various senior 

positions in the State Civil Service, including statutory bodies 

and agencies for over 24 years. 

He was the Government Printer at the Sabah Government 

Printing Department before assuming his current position of 

Chief Executive Officer, Warisan Harta Sabah Sdn Bhd, a wholly 

owned investment holding company of the State Government 

of Sabah in 2000. 

He also sits on the Board of Borneo Housing Mortgage 

Finance Berhad. 

He attended 5 out of the 14 Board Meetings of the 

Company held during the financial year on behalf of Datuk Haji 

Yusoff bin Datuk Haji Mohamed Kasim. 



Datuk Amar Haji Mohamad Morshidi bin Abdul Ghani 

Alternate Director to Datuk Amar Wilson Baya Dandot 

Datuk Amar Haji Mohamad Morshidi, aged 53, a Malaysian, 

was appointed as Alternate Director to Datuk Amar Wilson 

Baya Dandot on 11 January, 2008. 

He holds a Bachelor of Economics degree from University 

KebangsaanMalaysiaandaMasterofScienceinHumanResource 

Administration from University of Scranton, Pennsylvania, 

USA. He started his career as a Management Executive with 

PETRONAS in 1980. He was appointed Director of Kuching 

North City Hall from 1988 to 1998. He then went on to hold a 

number of senior positions in the Chief Minister’s Department 

that included Director, Human Resource Management and 

Director, Human Resource Development and Quality from 1998 

to 2001. He was later appointed as Permanent Secretary in 

the Ministry of Social Development and Urbanisation in 2001. 

He was the Director in the State Planning Unit in the Chief 

Minister’s Department before assuming a position as Deputy 

State Secretary of Sarawak in 2006. On 2 August 2009, he was 

appointed as State Secretary of Sarawak. 

He does not hold any directorships in other public 

companies. 

He is currently the Board Member of Sarawak Economic 

Development Corporation (SEDC), Chairman of the Board 

Audit Committee (SEDC), Director on the Board of University 

Malaysia Sarawak (UNIMAS), Board Director/University Council 

Member of SWINBURNE University of Technology Sarawak, 

Director of ASSAR Asset Management Sdn Bhd Sarawak, 

Chairman of FARADALE Development Sdn Bhd, Chairman of 

Sarawak Development Institute, Council Member of Sarawak 

Information Technology & Resources Council, Director of 

Sarawak Information Systems Sdn. Bhd., Deputy Chairman of 

Angkatan Zaman Mansang (AZAM), Board member of Regional 

Corridor Development Authority (RECODA), Chairman of 

Faradale Development Sdn. Bhd, Board Director of Faradale 

Holdings, Chairman of Sarawak Water Resources Council 

and Board of Governors International College of Advance 

Technology Sarawak (ICATS). He is also involved in other social 

organisations such as Deputy President of Kelab Golf Sarawak, 

Council Member of Sarawak Badminton Association and Patron 

of Sarawak Rugby Union. 


Company held during the financial year on behalf of Datuk 

Amar Wilson Baya Dandot. 

Notes: 

1. None of the Directors has any family relationship with any Directors/Shareholders of MAS, nor has any conflict of interest with MAS. 

2. None of the Directors has been convincted for any offences (other than traffic offences if any) within the past ten years. 

19

9 

10 

8 

1 

12 

6 

5 

13 

11 

14 

16 

3 7 

2 

15 4 

1 Tengku Dato’ Azmil Zaharuddin bin Raja Abdul Aziz 

2 Mohd. Azha bin Abdul Jalil 

3 Captain Mohamed Azharuddin bin Osman 

4 Dato’ Captain Mohd. Nawawi bin Awang 

5 Indira Nair 

6 Dr. Amin Khan 

7 Dato’ Bernard Francis 

8 Mohd Roslan bin Ismail 

Senior Management 

9 Effendi bin Abdul Rahman 

10 Muzzaffar bin Othman 

11 Shahari bin Sulaiman 

12 Dato’ Eddy Leong Chin Tung 

13 Dato’ Mohd. Salleh bin Ahmad Tabrani 

14 Captain Dr. Ooi Teong Siew 

15 Shahjanaz binti Kamaruddin 

16 Esther Yap Siew Yen

22 


Senior Management Profile 

Tengku Dato’ Azmil Zahruddin bin 

Raja Abdul Aziz 

Managing Director/Chief Executive Officer 

Tengku Dato’ Azmil Zahruddin, 39, is the Managing Director 

of Malaysia Airlines. He was first appointed to the Board of 

Malaysia Airlines on 23 August 2004 and subsequently as 

Executive Director on 23 August 2005 and Chief Financial 

Officer on 1 February 2006. 

He was part of the senior management team who 

successfully led the turnaround of Malaysia Airlines. The 3-year 

Business Turnaround Plan (BTP 1) was completed in less than 2 

years in 2008. 

He is currently driving the Business Transformation Plan 

which aims to transform the national carrier into The World’s 

Five Star Value Carrier, offering 5-Star products and services at 

affordable prices. 

Azmil is also a board member of Tourism Malaysia. 

Prior to Malaysia Airlines, Azmil was the Chief Financial 

Officer and then Managing Director/ Chief Executive Officer 

of Penerbangan Malaysia Berhad, Malaysia Airlines’ holding 

company. He was also with PricewaterhouseCoopers in their 

London and Hong Kong offices where he was in the Audit 

and Business Advisory Services division, specialising in financial 

services. 

Azmil holds a double first class degree in Economics from 

the University of Cambridge. He is a Chartered Accountant and 

an associate member of the Malaysian Institute of Accountants 

and the Institute of Chartered Accountants in England and 

Wales. He is also an Associate of the Association of Corporate 

Treasurers, United Kingdom. 

Mohd. Azha bin Abdul Jalil 

Chief Financial Officer 

Mohd Azha Abdul Jalil, aged 43, graduated with a Bachelor’s 

Degree in Accounting (High Distinction) from Indiana University, 

Bloomington, USA. He joined MAS in July 2007. 

Prior to joining MAS, he held eight different positions in 

the Shell group of companies within a span of 17 years. The 

assignments included as General Finance Manager of Shell MDS 

Malaysia, Senior Analyst (Business Performance & Strategy) at 

Shell International London, Finance Manager (Commercial) 

of Shell Malaysia Trading Berhad and several other finance 

positions at Sarawak Shell Berhad. He started his career with 

KPMG Peat Marwick. 

Captain Mohamed Azharuddin bin Osman 

Director of Operations 

Captain Mohamed Azharuddin Osman joined Malaysia Airlines 

in 1973 after completing his flying training under the Qantas 

cadet pilot training programme in Sydney. He started his flying 

career as a Co-pilot on the Fokker 27 and now flies the Boeing 

747-400. 

During his years in MAS he has held various positions in 

training as well as inflight operations management. His last 

position was General Manager Flight Operations. He is currently 

the Director of Operations responsible for the airline’s operations 

network. 

He is a member of the Chartered Institute of Transport and 

Logistics (CILT) UK, holds an MBA (IMC UK) as well as MSc (HRD) 

from University Putra (UPM) Malaysia. 

Captain Azharuddin represents MAS as a Board member of 

MAS Aerotechnologies Sdn. Bhd., GE Engine Services Malaysia 

Sdn. Bhd., MAS Catering (Sarawak) Sdn. Bhd., Malaysian 

Aerospace Engineering Sdn. Bhd., Aerokleen Services Sdn. Bhd., 

and Hamilton Sunstrand CSC (Malaysia) Sdn. Bhd. 

Dato’ Captain Mohd Nawawi bin Awang 

Senior General Manager, External Relations 

Dato’ Nawawi, an airline pilot by profession, is a member of 

the Chartered Institute of Logistics and Transport (CILT) and 

holds a Master of Business Administration from the University of 

Strathclyde, Scotland. 

He joined MAS in 1975 after 5 years of service with the Royal 

Malaysian Air Force. Throughout the years, he has progressed 

through several senior positions in the airline, including the 

role of Senior General Manager of Flight Operations prior to 

being appointed to his current position. Dato’ Nawawi has also 

represented MAS in a number of industry-level committees, 

including at the IATA Operations Committee from 2001 to 2004 

and currently spearheads the airline’s efforts to ‘Win Coalitions’, 

proactively engaging with its stakeholders, namely government 

ministries and agencies, state governments, members of 

parliaments, suppliers and business partners. 

He also leads the airline’s commitment towards Project 

PINTAR, a GLC-concerted effort in nurturing human capital, 

which is part of the airline’s Corporate Social Responsibility 

initiatives. He is also the President of Malaysia Airlines Sports 

Club (Kelab Sukan MAS) since 2004 and manages 23 sports 

sub-committees in the Company.

Indira Nair 

Senior General Manager, Communications 

Indira joined Malaysia Airlines in February 2006 and has 

played a key role in the turnaround/transformation of the 

national carrier as one of the senior management team. Her 

current remit covers the full spectrum of Communications i.e. 

Investor Relations, Media Relations, Issues/Crisis Management, 

Internal Communications, Community Relations, Advertising, 

Promotions & Sponsorships, Visual Identity and Customer 

Relations. 

Prior to joining Malaysia Airlines, she was responsible for 

driving the talent agenda, regionally, at Ogilvy PR Worldwide. 

In her role as Chief Talent Officer, Asia Pacific, over a period of 

5 years, she helped the network attract, grow and retain the 

right people in the right roles. Her role included identifying 

and recruiting senior talent, developing and leading strategic 

training programmes, internal communications and knowledge 

management. 

Indira has worked with a number of networks, including 

Edelman Worldwide, Burson-Marstellar and MDK Consultants. 

She also worked with the Berjaya Group, where she helped 

set up Inter-Pacific Communications, the Group’s in-house 

marketing communications agency. 

Her experience ranges from leading integrated 

communications campaigns and running successful/profitable 

consultancy operations to running workshops and training 

programmes for senior executives. 

Dr Amin Khan 

Senior General Manager, Network & Revenue Management 


SENIOR MANAGEMENT 

Dr Amin Khan graduated from the Cranfield School of 

Management, UK, with an MBA and PhD in Management. He is 

a licensed aircraft engineer and a certified Six Sigma Black belt 

holder. 

He has held various key positions in the company, namely 

in Engineering, Internal Audit, Network Planning and Revenue 

Management, HR (Training and Development), Sales and 

Regional Manager of the China region. 

Prior to his appointment to his current position, he was 

double hatting as the Senior General Manager for Transition 

Management that leads the development and implementation 

of the Passenger Services System including eCommerce and 

the Managing Director of MASwings, a subsidiary of Malaysia 

Airlines that provides rural air services in East Malaysia. He 

currently heads the Network, Revenue Management and 

Distribution in Malaysia Airlines. 

Dato’ Bernard Francis 

Senior General Manager, Sales & Marketing 

Dato’ Bernard Francis, aged 40, holds a Bachelor degree 

from Universiti Kebangsaan Malaysia and Masters in Business 

Administration (International Business) from Universiti Malaya. 

He was entrusted with the new role of SGM Sales & Marketing 

in overseeing the entire sales function systemwide and also 

directly manages the regional office for Malaysia & ASEAN. 

Prior to the appointment to his current position in November 

2008, Bernard headed Network, Revenue Management and 

Distribution and played a pivotal role in the rationalisation of 

both the International and Domestic networks, instituted many 

structural changes to Revenue Management Optimisation since, 

including Fare Class Realignment and Fare Distributions. 

Before joining MAS, he was the Regional Director, Route 

Revenue and Distribution with responsibilities covering Air 

Asia Malaysia, Thai Air Asia and Indonesia Air Asia. His past 

experience with YTL Group included Project Financing and 

Mergers and Acquisitions related to energy, cement, property, 

hotels and information technology. 

23

24 


Mohd Roslan bin Ismail 

Senior General Manager, Engineering & Maintenance 

Managing Director, MAS Aerospace Engineering 

Mohd Roslan Bin Ismail, aged 54, graduated with a Master 

of Science (MSc) (Transport Planning) from Universiti Teknologi 

Malaysia (UTM), Skudai, Johor, in 1996 and holds a Malaysian 

DCA Aircraft Maintenance Engineer’s License. 

He started his career in Malaysia Airlines as a Licensed 

Aircraft Maintenance Engineer and has more than 29 years of 

working experience in the Engineering Division. He is currently 

a member of the Board of Directors of MAS GMR Aerospace 

Engineering Co. Ltd, India, Pan Asia Pacific Aviation Services 

Ltd, Hong Kong, (PAPAS), Honeywell Aerospace Services 

(M) Sdn Bhd, GE Engine Services Malaysia Sdn Bhd (GEESM) 

and Hamilton Sundstrand CSC (M) Sdn Bhd. He is also the 

Managing Director of MAS Aerospace Engineering Sdn Bhd, a 

wholly owned subsidiary company of Malaysia Airlines. 

Effendi bin Abdul Rahman 

Senior General Manager, Human Resources 

Effendi bin Abdul Rahman, aged 54, holds a Bachelor degree 

in Computing Science from Imperial College London and 

Masters in Business Administration from Ohio University, USA. 

He was appointed Senior General Manager, Human Resources 

in April 2006 and has instituted many changes in the airline’s 

human resource operations and strategy since, including 

the organisation-wide implementation of the Performance 

Management System. 

Before joining MAS, he was the Human Resource Director in 

Dutch Lady Milk Industries Berhad. Prior to Dutch Lady, Effendi 

held a similar role at Texas Instruments. He also has extensive 

business related experience in other management roles at other 

organisations such as Northern Waste Industries, Proton and 

Time Telecommunications. 

Muzzaffar bin Othman 

Senior General Manager, MD’s Office 

Muzzaffar is currently Senior General Manager in the MD’s 

office. His portfolio covers support functions (i.e. IT, Property), 

purchase & lease of aircrafts, strategic procurement, product 

development and government and industry relations. 

Prior to the current assignment, he was in Strategic 

Procurement. More recently, his procurement team facilitates 

Stuctural Cost Savings initiatives in MAS. 

Before joining MAS, he did Business Process Re-engineering 

in Citibank and prior to that he was with IBM’s Business 

Consulting Services in its Six Sigma and Supply Chain Management 

space. 

Shahari bin Sulaiman 

Managing Director, MASkargo 

Shahari Sulaiman, aged 47, graduated from the University 

of Southern California with a BSc in Aerospace Engineering 

in 1985. He subsequently joined Malaysia Airlines in the 

Engineering Division and had served 15 years in Engineering 

covering Technical Services, Structural Engineering, Aircraft 

Evaluation, Reliability Analysis and freighter conversions. 

In early 2001, he was brought into MASkargo as a Senior 

Management team member to turnaround the company. The 

team managed to turnaround the company in one and a half 

years and has been profitable ever since. In MASkargo, he 

has accumulated experiences in Freighter Planning, Business 

Planning, Sales, Revenue Management and Operations by 

managing the respective departments at some point over 

the last 7 years. He was appointed to the current position in 

September 2007.

Dato’ Eddy Leong Chin Tung 

Managing Director, Firefly 

Dato’ Eddy, aged 37, graduated with a Bachelor of Business in 

Accounting from the RMIT University of Melbourne, Australia 

and also a member of the Institute of Chartered Accountants in 

Australia as well as for Malaysian Institute of Accountants. 

Prior to joining MAS in 2003, he was in the Audit & Business 

Advisory and Business & Risk Consulting units in Arthur Andersen 

(which merged with Ernst & Young in 2002) from 1997 to 2003. 

He has held various key positions within MAS including Project 

Director of MAS Hotels & Boutiques Sdn. Bhd., Head of Project 

Management Department, Assistant General Manager for 

Airport & Inflight Operations (Quality Assurance), and Assistant 

General Manager, Turnaround Management Office until 2007. 

Currently, Eddy holds the position of Managing Director of 

FlyFirefly Sdn. Bhd., a subsidiary airline of MAS. 

Dato’ Mohd Salleh bin Ahmad Tabrani 

Managing Director - MASwings 

General Manager – Transition Management 

Dato’ Mohd Salleh, aged 47, graduated in 1985 with an Honors 

Bachelor Degree in Economics from University of Waterloo, 

Ontario, Canada. He joined MAS in 1986 as a Management 

Trainee within the Sales Division. Since then, he has held several 

management positions at various locations within the domestic 

and international network of MAS which includes posting in 

Malaysia, Brunei, Germany, Holland, USA and Australia. 

Over the last 23 years, given his wide international 

experience, he has progressively assumed higher management 

positions and responsibilities within MAS. His current 

management responsibilities include being Board of Director 

for MAS subsidiaries such as MASwings Sdn. Bhd., Golden 

Boutique Sdn. Bhd., Golden Holidays Sdn. Bhd and Seri Pacific 

Corporation Sdn. Bhd. In addition, he is a member of IATA 

StB (Simplifying the Business) Steering Committee Group. 

Dato’ Mohd Salleh is also a faculty member of MAS Leadership 

Development Programme, and lectures regularly at the Malaysia 

Airlines Academy. 

Captain Dr Ooi Teong Siew 


SENIOR MANAGEMENT 

General Manager, Corporate Safety, Security, Health and Environment 

Captain Dr Ooi, aged 57, joined Malaysia Airlines as a cadet 

pilot in 1972. He has held various key management pilot 

positions for the last 30 years. He holds a Masters of Business 

Administration from the University of Bath and a Doctor of 

Business Administration from the University of Newcastle. 

Shahjanaz binti Kamaruddin 

Company Secretary 

Shahjanaz graduated in 1985 with a BA Hons. (Law) degree 

from the University of Kent, Canterbury in England. She studied 

the Bar Finals at the Council For Legal Education in London 

and was called to the English Bar ,Lincoln’s Inn, in 1987. She 

chambered with the eminent law firm, Messrs. Shook Lin & Bok, 

before being called to the Malayan Bar in 1988. 

She started her career as the Assistant Secretary at a 

renowned plantation-based company before joining Malaysia 

Airlines in June 1995 as the Corporate Secretary and Counsel. 

In 2003 she was appointed as the Group General Counsel to 

head the Group Legal Practice Department. She was transferred 

to Group Secretarial Practice to serve as the Company Secretary 

in March 2009. 

Esther Yap Siew Yen 

Chief Internal Auditor 

Esther Yap, aged 37, graduated from University Malaya with an 

Honour Class II (Upper Division) Degree in Accountancy. Before 

joining MAS in 2002, she served Arthur Andersen & Co for 4 

years. 

She is a Chartered Accountant (CA) of Malaysian Institute of 

Accountants (MIA) and Malaysian Institute of Chartered Public 

Accountants (MICPA). She is also the Deputy Chairman of the 

International Association of Airline Internal Auditors (IAAIA) and 

the Chairman of the Whistleblower Independent Committee. 

She was appointed to her current position in July 2009. 

During her tenure in Malaysia Airlines, Esther was actively 

involved in internal control process mapping and documentation 

projects named Systemwide Station Internal Control Manual 

(SSICM) and Systemwide Station Approving Authority Manual 

(SAAM). Esther set up the Financial Audit and Commercial Audit 

Teams in Malaysia Airlines and initiated the Internal Quality 

Assurance Collaboration Programme within the organisation. 

25

26 


Providing convenient 

services by simplifying 

passenger travel. 


PRE- 

EMBARKATION 

27

28 


Five-Year Statistical Review of The Group 

FINANCIAL * 

Total Revenue (RM’000) 11,574,456 15,503,714 15,232,741 13,407,240 9,181,338 

Total Expenditure (RM’000) 12,287,239 15,259,027 14,404,400 13,641,880 10,434,634 

Taxation (RM’000) 31,116 (19,086) (29,590) (60,618) (18,657) 

Profit/(Loss) after Tax And Exceptional Item (RM’000) 493,106 245,697 852,743 (133,737) (1,251,603) 

Shareholders’ Funds (RM’000) 735,727 4,185,698 3,934,893 1,873,425 2,009,857 

Profit/(Loss) as a % of Revenue (%) 4.3 1.6 5.6 (1.0) (13.6) 

Return on Shareholders’ Funds (%) 67.0 5.9 21.7 (7.1) (62.3) 

Earnings/(Loss) Per Share (sen) 29.3 14.6 58.0 (10.9) (100.2) 

PRODUCTION 

Network Size (KM) 366,908 387,987 421,075 525,784 505,376 

Time Flown (Hours) 355,641 364,013 356,295 381,134 314,087 

Distance Flown (000 KM) 219,961 236,031 239,699 249,925 207,117 

Available Capacity (000 TKM) 7,366,845 8,503,203 9,579,101 9,525,623 7,716,059 

Available Passenger Capacity (000 Seat KM) 48,761,794 53,378,580 56,227,787 58,923,735 49,785,977 

TRAFFIC 

Passenger Carried (000) 13,870 13,760 14,213 15,466 13,852 

Passenger Carried (000 Pax KM) 33,455,303 36,176,166 40,162,186 41,099,612 35,604,763 

Passenger Load Factor (%) 68.6 67.8 71.4 69.8 71.5 

Cargo Carried (000 TKM) 2,065,120 2,445,021 2,621,597 2,593,332 1,948,761 

Mail Carried (000 TKM) 7,674 8,965 4,721 4,309 2,131 

Overall Load Carried (000 TKM) 5,110,924 5,750,376 6,305,358 6,359,430 5,205,283 

Overall Load Factor (%) 69.4 67.6 65.8 66.8 67.5 

STAFF 

31-Dec 

Employee Strength 19,147 19,094 19,423 19,596 22,835 

Revenue Per Employee (RM’000) 605 812 784 684 402 

Available Capacity Per Employee (TKM) 384,752 445,334 493,183 486,100 337,905 

Load Carried Per Employee (TKM) 266,931 301,161 324,634 324,527 227,952 

2009 

* As per Audited Financial Statements for the financial year under review. 

^ For 9 months ended 31 December 2005 as a result of change in financial year end to 31 December. 

31-Dec 

2008 

31-Dec 

2007 

31-Dec 

2006 

31-Dec 

2005 ^

Performance Highlights 


FINANCIAL & STATISTICAL HIGHLIGHTS 

31-Dec 31-Dec Change 

2009 2008 % 

GROUP 

Financial 

Total Revenue RM Million 11,574.5 15,503.7 (25.3) 

Total Expenditure RM Million 12,287.2 15,259.1 (19.5) 

Profit after Tax RM Million 493.1 245.7 100.7 

Shareholders’ Funds RM Million 735.7 4,185.7 (82.4) 

Earnings Per Share Sen 29.3 14.6 100.7 

Dividend Per Share Sen 0.0 0.0 0.0 

Cash Flow Per Share RM (0.9) (0.4) 136.1 

Operating Statistics 

Available Tonne Kilometres Million 7,366.8 8,503.2 (13.4) 

Load Tonne Kilometres Million 5,110.9 5,750.4 (11.1) 

Overall Load Factor % 69.4 67.6 2.7 

Available Seat Kilometres Million 48,761.8 53,378.6 (8.6) 

Passenger Kilometres Flown Million 33,455.3 36,176.2 (7.5) 

Passenger Load Factor % 68.6 67.8 1.2 

Staff and Productivity 

Employee Strength 19,147 19,094 0.3 

Available Tonne Kilometres Per Employee 384,750 445,334 (13.6) 

Load Tonne Kilometres Per Employee 266,930 301,161 (11.4) 

COMPANY 

Operating Statistics 

Available Tonne Kilometres Million 6,110.7 6,815.3 (10.3) 

Load Tonne Kilometres Million 4,280.3 4,723.3 (9.4) 

Overall Load Factor % 70.0 69.3 1.1 

Available Seat Kilometres Million 47,838.3 52,868.0 (9.5) 

Passenger Kilometres Flown Million 32,894.2 35,868.4 (8.3) 

Passenger Load Factor % 68.8 67.8 1.4 

Aircraft Utilisation (Average) Hours Per Day 10.7 11.1 (3.5) 

Staff and Productivity 

Employee Strength 16,454 17,571 (6.4) 

Available Tonne Kilometres Per Employee 371,381 387,869 (4.3) 

Load Tonne Kilometres Per Employee 260,137 268,811 (3.2) 

29

30 


Expenditure 


2009 2008 

RM MIL RM MIL % 

GROUP 

Staff Costs 2,089.2 2,171.9 (3.8) 

Depreciation 315.9 327.9 (3.7) 

Fuel and Oil 3,497.3 6,531.6 (46.5) 

Handling and landing costs 1,635.3 1,717.3 (4.8) 

Hire of aircraft and equipment 1,866.8 1,906.0 (2.1) 

Finance charges 84.5 60.8 39.0 

Commission and incentives 440.7 507.7 (13.2) 

Others 2,357.4 2,035.9 15.8 

12,287.2 15,259.1 (19.5) 

COMPANY 

Staff Costs 1,870.1 1,960.9 (4.6) 

Depreciation 286.3 294.1 (2.7) 

Fuel and Oil 2,874.5 5,732.1 (49.9) 

Handling and landing costs 1,502.7 1,544.0 (2.7) 

Hire of aircraft and equipment 1,488.5 1,569.7 (5.2) 

Finance charges 84.0 59.3 41.7 

Commission and incentives 418.9 484.7 (13.6) 

Others 2,153.5 1,819.0 18.4 

% 

50.0 

45.0 

40.0 

35.0 

30.0 

25.0 

20.0 

17.0 

15.0 14.2 

10.0 

5.0 

0.0 

Staff 

Costs 

Group Expenditure 

2.6 

2.1 

28.5 

42.8 

Depreciation Fuel 

and Oil 

Handling and 

Landing Costs 

10,678.5 13,463.8 (20.7) 

15.2 

13.3 

11.3 

12.5 

Hire of 

Aircraft & 

Equipment 

0.7 

0.4 

Finance 

charges 

3.6 

Commission 

and 

incentives 

31 Dec 2009 

31 Dec 2008 

3.3 

19.2 

13.3 

Others

Analysis of Airline Operations (Including Freighter) 

By Geographical Route Region 




2009 2008 % 

Route Revenue (RM Mil) 

Malaysia 1,596.1 1,388.4 15.0 

Asia 1,275.1 1,641.0 (22.3) 

Europe and Middle East 2,202.5 3,148.7 (30.1) 

Australia and New Zealand 1,105.5 1,649.5* (33.0) 

Africa and South America 175.7 249.7 (29.6) 

Orient and North America 1,609.9 2,270.9 (29.1) 

* Restated 7,964.8 10,348.2* (23.0) 

Passenger Load Factor (%) 

Malaysia 69.1 67.8 1.9 

Asia 65.6 60.7 8.1 

Europe and Middle East 71.3 74.9 (4.8) 

Australia and New Zealand 74.0 73.6 0.5 


Orient and North America 63.5 60.6 4.8 

68.6 67.8 1.2 

Overall Load Factor (%) 

Malaysia 64.7 64.1 0.9 

Asia 69.3 65.2 6.3 

Europe and Middle East 72.5 71.1 2.0 

Australia and New Zealand 72.4 68.6 5.5 


Orient and North America 68.2 64.3 6.1 

% 

35.0 

30.0 

25.0 

20.0 

15.0 

10.0 

5.0 

0.0 

Revenue Composition by Route 

20.0 

13.4 

16.0 15.9 

30.4 

27.7 

Malaysia Asia Europe and 

Middle East 

69.4 67.6 2.7 

15.9 

13.9 

Autsralia and 

New Zealand 

2.2 2.4 

Africa and 

South 

America 

31 Dec 2009 

31 Dec 2008 

20.2 22.0 

Orient and 

North 

America 

31

32 


Revenue Composition 

By Category 


2009 2008 % 

RM MIL RM MIL 

GROUP 

Passenger and Excess Baggage 6,772.6 8,726.8 (22.4) 

Cargo and Mail 1,192.3 1,616.6 (26.2) 

Airport Services 243.5 420.3 (42.1) 

Charters 227.0 197.6 14.9 

Other 3,139.2 4,542.4 (30.9) 

11,574.5 15,503.7 (25.3) 

COMPANY 

Passenger and Excess Baggage 6,548.5 8,604.8 (23.9) 

Cargo and Mail 651.5 1,032.5 (36.9) 

Airport Services 219.0 408.4 (46.4) 

Charters 166.0 165.2 0.5 

Others 2,530.8 3,486.7 (27.4) 

% 

70.0 

60.0 

50.0 

40.0 

30.0 

20.0 

10.0 

0.0 

Revenue Composition by Category 

58.5 56.3 

Passenger 

and Excess 

Baggage 

10.3 10.4 

Cargo 

and Mail 

10,115.8 13,697.6 (26.1) 

2.1 2.7 

Airport 

Services 

2.0 1.3 

Charters 

31 Dec 2009 

31 Dec 2008 

27.1 29.3 

Others

Group Financial Highlights 

RM 

1.5 

1.0 

0.5 

0.0 

-0.5 

-1.0 

Sen 

100 

50 

0 

-50 

-100 

-150 

Cash Flow Per Share 

(0.9) 

31 Dec 

09 

(0.4) 

31 Dec 

08 

1.4 

31 Dec 

07 

31 Dec 

06 

Earnings/(Loss) Per Share 

29.3 

31 Dec 

09 

14.6 

31 Dec 

08 

58.0 

31 Dec 

07 

(0.1) 

(9.8) 

31 Dec 

06 

(0.4) 

31 Dec 

05 

(100.2) 

31 Dec 

05 

RM 

2.5 

2.0 

1.5 

1.0 

0.5 

0.0 

Sen 

2.5 

2.0 

1.5 

1.0 

0.5 

0.0 

0.4 

31 Dec 

09 



Net Tangible Assets Per Share 

Dividends Per Share 

31 Dec 

09 

2.4 

31 Dec 

08 

31 Dec 

08 

2.3 

31 Dec 

07 

2.5 

31 Dec 

07 

1.4 

31 Dec 

06 

31 Dec 

06 

1.6 

31 Dec 

05 

31 Dec 

05 

33

34 


Corporate Charts 

Million 

12,000 

10,000 

8,000 

6,000 

4,000 

2,000 

% 

70.0 

69.0 

68.0 

67.0 

66.0 

65.0 

64.0 

0 

Overall Capacity and Demand 

5,111 

7,367 

31 Dec 

09 

5,750 

8,503 

31 Dec 

08 

6,305 

9,579 

31 Dec 

07 

Overall Load Factor 

69.4 

31 Dec 

09 

67.6 

31 Dec 

08 

65.8 

31 Dec 

07 

Revenue Tonne Kilometres 

Available Tonne Kilometres 

6,359 

9,526 

31 Dec 

06 

66.8 

31 Dec 

06 

5,205 

7,716 

31 Dec 

05 

67.5 

31 Dec 

05 

Million 

70,000 

60,000 

50,000 

40,000 

30,000 

20,000 

10,000 

0 

Million 

Tonne 

Kilometres 

3,000 

2,500 

2,000 

1,500 

1,000 

500 

0 

Passenger Capacity and Demand 

33,455 

48,762 

31 Dec 

09 

36,176 

53,379 

31 Dec 

08 

Cargo Carried 

2,065 

31 Dec 

09 

2,445 

31 Dec 

08 

40,162 

56,228 

31 Dec 

07 

Revenue Passenger Kilometres 

Available Seat Kilometres 

41,100 

58,924 

31 Dec 

06 

2,622 2,593 

31 Dec 

07 

31 Dec 

06 

35,605 

49,786 

31 Dec 

05 

1,949 

31 Dec 

05

Fleet Status 

Leased Aircraft 

No. of Aircraft 

in Malaysia Airlines’ Operation 

as at 31 December 2009 

B747-400P 10 13 

B747-400F 2 0 

B747-200F 4 7 

B777-200 17 17 

A300-600F 0 1 

A330-300 11 11 

A330-200 3 3 

B737-800 3 0 

B737-400 37 37 

ATR72-500 14 6 

F50 7 9 

DHC6 4 5 

Total 112 109 



No. of Aircraft 

in Malaysia Airlines’ Operation 

as at 31 December 2008 

35

36 



Ensuring every passenger 

starts their journey with 

peace of mind. 

EMBARKATION 

37

38 


Chairman’s Statement 

Dear Shareholders, 

The past year was extremely challenging for the aviation industry. The 

International Air Transport Association (IATA) declared 2009 as the 

toughest year in the history of aviation, worse than post 9/11 and SARS. 

The industry recorded a 3.5% decline in passenger traffic and a 10.1% decline in freight traffic. In 

Asia Pacific alone, passenger traffic declined by 5.6% compared to the previous year while freight 

declined by 9.2%. As a whole, the industry was projected to lose US$9.4 billion. 

Needless to say, Malaysia Airlines was adversely affected by the decline. For the full year 2009, we 

recorded an operating loss of RM628 million. However, with the mark-to-market derivative gain 

of RM1.16 billion, the company was able to record a full year positive net income after tax (NIAT) 

of RM490 million. Hence, our focus going forward will be on operational performance which 

reflects the true state of our business. 

The operational loss we recorded in 2009 was mirrored by similar losses, in many instances 

worse than ours, of most other airlines. We ourselves would have fared much worse had we not 

continued to pursue our Business Transformation Plan (BTP2) aggressively. 

During the year under review, we continued to relentlessly control our costs – we reduced cost 

by an additional RM677 million in 2009 alone, and RM3 billion in the last four years. We also 

maintained a healthy cash position with prudent capital management, which was crucial 

given the accelerated cash burn rate that the industry experienced under the tough operating 

environment. 

Close on the heels of cost containment exercises, we introduced Dual Pricing where we reengineered 

our pricing mechanism. Through a highly competitive and dynamic pricing, we were 

able to maximise our yields on peak flights and expand our market share on non-peak flights. 

Despite the global downturn and declining demand for air travel, we aggressively stimulated 

demand through various promotions including Everyday Low Fares, Get-the-Deal and local/global 

Travel Fairs. 

The global economic recovery in the latter half of 2009, led by the rebound of emerging Asian 

markets, drove strong growth in passenger load factors, both for Malaysia Airlines and the 

industry as a whole. By the end of 2009, we saw a huge improvement in our passenger load 

factors – from 55.7% in January to 80.4% in December. Yields, however, were slower to 

recover as demand remained fragile. Nevertheless, in the fourth quarter of 2009, Malaysia Airlines 

returned to operating profitability with a RM3.8 million profit. Although marginal, the operating 

profit signalled that the worst was over and encouraged us towards enhancing our efforts to take 

Malaysia Airlines to the next level. 

Despite the harsh operating conditions, I am pleased to note that our service standards remained 

strong. In the year 2009, Skytrax awarded Malaysia Airlines with “5-Star Airline” status for the 

fifth consecutive year, as well as the “Best Cabin Staff” recognition. We were also recognised 

as “Asia’s Leading Airline” at the World Travel Awards. MASkargo was awarded the “Best Air 

Cargo Carrier in Asia” at the 2009 Asian Freight and Supply Chain Awards. Malaysian Aerospace 

Engineering (MAE), our Maintenance, Repair and Overhaul (MRO) arm, was awarded the “2009 

Best Asia-Pacific Airline MRO Operation Award” by Aviation Week and Overhaul & Maintenance, 

two of the industry’s leading magazines. MAE was also recognised as the “Best Maintenance, 

Repair and Overhaul (MRO) Centre in Asia Pacific 2009” by Frost and Sullivan, Asia-Pacific.


CHAIRMAN’S STATEMENT 

39

40 


These awards and many other accolades that we received over 

the year were testament to the quality and consistent levels 

of services that we provided to our passengers and customers. 

The awards for engineering and maintenance standards are 

especially significant. Safety continues to be of paramount 

importance. We remain committed to protecting the well 

being of our passengers, workforce and stakeholders through 

the effective and stringent implementation of best industry 

practices in all our business operations. A monthly safety 

performance report is presented to, and discussed at, the Board 

of Directors’ meeting as the first agenda item. 

In 2009, the Corporate Safety, Security, Health and Environment 

team focused on safety action plans to minimise the operational 

risks in our operations. Open reporting, safety investigation and 

quality audits provided lessons and continuous improvement to 

our safety performance. We also registered our participation 

in the European Union Emission Trading Scheme (EU ETS) in 

October 2009. This formalised the systems and processes used 

at Malaysia Airlines to track the fuel burn in revenue tonne 

kilometres for flights from Kuala Lumpur to European cities. In 

addition, green practices such as reduce, recycle and reuse and 

energy conservation initiatives were introduced as part of MAS’ 

Green Journey programme. 

GLC Transformation 

For the year under review, we achieved “on target” status 

in overall business performance on our Corporate Scorecard 

under the Government-Linked Companies Transformation 

(GLCT) Programme. Our net profit of RM490 million was well 

within the “exceeding” range on our performance indicator. 

As mentioned before, we recognise that this net profit includes 

unrealised gains/losses from our fuel hedges and is not entirely 

representative of our business performance. In our 2010 

corporate scorecard, we have included a new performance 

indicator i.e. operating profit, for a more accurate assessment 

of our business performance. 

In terms of cost containment KPIs, we were “on target”, as we 

aggressively managed our costs throughout the period under 

review. We were “on target” in other operational measures 

including baggage delivery (3.4 cases per 1000 passengers), 

and achieved “outstanding” in the implementation of a 

performance-based culture. The positive move towards a 

performance-based culture in Malaysia Airlines marks a great 

milestone. Unlike in the past, each and every member of our 

19,000-strong workforce now realises the importance of his/ 

her individual contribution towards achieving a common goal 

for the company. 

The year 2010 will be exciting for us as we take delivery of 

the first batch of our new aircraft. With better products and 

consistent 5-star services supported by enhanced systems 

and infrastructure both internally and externally, we aspire to 

achieve even better results in our 2010 corporate scorecard. 

Project Pintar 

The PINTAR project is a joint community programme by 

Government-Linked Companies at promoting education as 

a vehicle to address socio-economic imbalances amongst 

underprivileged children. To date, Malaysia Airlines has 

adopted a total of 17 schools in rural areas, and has organised 

a number of activities that would help propel students towards 

academic and extra-curricular excellence. The Corporate 

Social Responsibility section on pages 84 to 87 provides more 

information on our involvement in this project. 

Industry Outlook 

In January 2010, IATA forecast that the industry would 

collectively lose an approximate US$5.6 billion for the full 

year. In February 2010, IATA halved its earlier forecast to a loss 

of about US$2.8 billion following encouraging signs of solid 

recovery in both passenger and cargo traffic. In February, global 

passenger demand was up by 9.5% year-on-year, while cargo 

traffic improved by 26.5%. In Asia Pacific alone, passenger 

traffic grew by 13.5% while cargo traffic posted a substantial 

growth of 34.5% year-on-year. This strong industry-wide 

recovery indicates that the worst may be over for airlines, and 

the industry can look forward to brighter skies ahead, except 

that unanticipated events such as closure of European skies on 

account of plumes of volcanic ash, will occur in our industry. 

Nevertheless, the otherwise positive developments augur 

well for Malaysia Airlines. We are cautiously optimistic on the 

industry. Oil prices continue to be volatile, and the uncertainty 

of the global economic outlook adds to the challenge. While 

the Asia Pacific region is playing a key role in leading the world 

out of the debilitating aftermath of the 2008 Global Financial 

Crisis (GFC), the economic outlook particularly in Europe 

remains uncertain for now. Fragile growth in demand ex-Asia 

Pacific inevitably means slower pick-up in yields. Additionally, 

after more than a year of cutting capacity, in response to weak 

demand since the GFC, airlines are anticipated to aggressively 

add the cut capacity back, and potentially add even more 

capacity above and beyond their pre-crisis capacity. More 

and more aircraft are getting delivered this year and beyond, 

and the additional capacity will continue to put tremendous 

pressure on yields. Another challenge comes in the form of 

higher costs attached to security and environmental policies, 

which have become more comprehensive in response to current 

industry-wide issues.

It is important to note that though challenges have grown 

in complexity, they are certainly not new to the industry or 

to Malaysia Airlines. We have dealt with all these challenges, 

and more, in the past and have remained resilient throughout 

the years. We will continue to confront these challenges and 

remain committed to our vision of becoming the world’s Five 

Star Value Carrier as set out in our BTP2. 

Moving Forward 

After years of hard work, we now move on to the next phase 

in BTP2: Growth. Our turnaround and transformation initiatives 

have prepared us and laid the foundation for growth and future 

expansion. After having won the fight to survive, we must now 

invest in our future. 

In the year under review, we announced the acquisition of up 

to 55 new Boeing 737-800s, up to 25 Airbus 330-300s, up 

to 4 Airbus 330-200 freighters and 6 Airbus 380 superjumbo 

aircraft, the last having been long ordered. In 2010, we will 

take delivery of 2 Boeing 737-800s, and we expect to start 

taking delivery of our A330s in 2011 and the A380s the year 

after. By 2015, we will have the youngest fleet in Asia. 

We continuously strive to improve customers’ experience at our 

five main customer touchpoints – Purchase, Pre-embarkation, 

Embarkation, Inflight and Disembarkation. The Passenger 

Services System (PSS) that we implemented in 2009 allows us to 

converge convenience with far-reaching commercial platforms, 

ensuring faster service delivery, quicker online purchase, 

miles redemption options online and other new services. MH 

Mobile, our mobile distribution channel made possible with the 

implementation of the new PSS, offers the most comprehensive 

menu of mobile phone functionality available to airline 

passengers anywhere in the world. 

In early 2010, with the approval from our shareholders, 

we raised RM2.67 billion through a rights issue to further 

strengthen our balance sheet. 

All these are done with one thing in mind – we are investing 

in our future. We continue to remain focused on our vision of 

providing our customers with 5-star products and services at 

affordable prices. In 2010 our ambition is to gear ourselves for 

growth. With profitable growth, we will be able to achieve this 

vision. 

Acknowledgements 

On behalf of the Board, I would like to extend my heartfelt 

gratitude to Dato’ Sri Idris Jala whose visionary efforts had been 

vital in turning around Malaysia Airlines and in starting the 

process of transforming the company into one that we can be 


CHAIRMAN’S STATEMENT 

41 

proud of. We are indeed privileged to have had the opportunity 

to work with him in the relatively brief period he was with the 

company and are all proud of his appointment as a Minister 

in the Prime Minister’s Department and Chief Executive Officer 

(CEO) of the Performance Management and Delivery Unit 

(PEMANDU). 

On the other hand, I would like to introduce Tengku Dato’ Azmil 

Zahruddin, who assumed the role of Managing Director and 

Chief Executive Officer on 28 August 2009. Tengku Dato’ Azmil 

was previously the Chief Financial Officer and worked handin-hand 

with Dato’ Sri Idris on the numerous initiatives under 

BTP1 and BTP2. The Board is confident that Tengku Dato’ Azmil 

and the management team will continue to deliver exceptional 

results to the company and its shareholders. 

To each and every one of our employees who has remained 

loyal and dedicated to the company and continues to persevere 

with the company throughout the years, I would sincerely 

like to thank you. Our utmost appreciation must also go to 

the government, our regulators and business partners for 

their continued support in seeing us through one of the most 

challenging periods of our business. 

My deepest appreciation also goes to my fellow Board members 

who have been instrumental in providing guidance and valuable 

insights to the management throughout the year. 

To our shareholders, passengers and customers, we thank you 

for your loyalty and support, and continuous feedback. We 

have built our business strategies with you in mind and will 

continue building value for shareholders and customers moving 

forward. 

I look forward to your continuing support in the exciting times 

ahead, as we strive to make the company profitable and grow 

ourselves into the world’s 5-Star Value airline of choice. 

Tan Sri Dr Mohd Munir bin Abdul Majid 

Chairman 

Malaysia Airlines 

April 2010

42 


Managing Director’s Statement 

Year 2 of BTP 2 

Dear Shareholders, 

Year 2 of our Business Transformation Plan (BTP2) was an extremely tough 

one for Malaysia Airlines. In addition to weaker demand resulting from the 

global economic downturn and the H1N1 pandemic, Malaysia Airlines also 

wrestled with overcapacity and the ensuing heavy discounting of airfares. 

Throughout the year, fuel prices continued to be volatile. While jet fuel 

prices have fallen from a high of USD182 per barrel in July 2008 to an 

average of USD70 per barrel in 2009, existing fuel hedging positions 

have inevitably prevented airlines from realising the gains from lower 

fuel prices. Consequently, many airlines still recorded losses or lower 

profits despite the easing of fuel prices. In fact, over 40 airlines have 

gone bankrupt in the year under review and more financially weak 

airlines are expected to follow suit. 

Nevertheless, the harsh market conditions in 2009 provided us with the ideal platform to reassess 

and realign our focus. With the BTP2 in mind, we set out a definitive action plan to make the 

most out of the crisis at hand and at the same time gear ourselves for future growth. 

1. MAINTAIN 5-STAR PRODUCTS AND SERVICES 

The year 2009 saw many process improvements and changes instituted to ensure we consistently 

deliver 5-Star product and services to our passengers. We embarked on a number of initiatives 

to improve on our product and services both on the ground and onboard including spending 

substantially more on food and beverage offerings per passenger. 

The cutover to Phase 2 of the Passenger Services System 

(PSS) from our old reservations system (KOMMAS 4) was 

successfully concluded in November 2009. This involved the 

migration and integration of 52 underlying systems to the SITA 

Reservations platform resulting in our ability to offer passengers 

a more convenient and efficient travelling experience. The 

initiative leverages on technology and streamlines processes 

to reduce complexity and costs while ensuring more 

convenient transportation of passengers and freight. To date, 

the implementation of the PSS has been a critical catalyst 

in the company’s customer service improvements, revenue 

enhancement and cost savings initiatives. 

In addition, this second phase has enabled the roll-out of more 

channels for self-service technology. This includes MHmobile 

which not only provides greater convenience to our customers 

but is also expected to be a dominant sales and service channel 

within the next 10 years. It offers comprehensive mobile phone 

functionality and allows easy access to information concerning 

flight bookings, status, schedules and even a baggage tracer


MANAGING DIRECTOR’S STATEMENT 

43

44 


application for tracing lost and mishandled passenger baggage. 

PSS also provides a platform for enhancing Enrich offerings 

including the redemption of Enrich miles online. 

The full integration of the PSS with our operations marks a 

significant milestone and is a major part of our ongoing efforts 

to improve customer experience at all touch points. 

2. STIMULATING DEMAND 

To stimulate demand that was severely impacted by the global 

economic downturn, we stepped up our sales and tactical 

promotions with the introduction of innovative products for both 

business and leisure travellers. In the year 2009, we launched 

the MAS Stimulus Package, encompassing promotions like Getthe-Deal, 

Balik Kampung, Business Companion, Kids Fly Free 

and Weekend Getaway to complement our hugely popular 

Everyday Low Fares promotion. These promotions, which were 

carried out primarily through our website (www.malaysiaairlines. 

com) shifted more traffic to direct sales channels. Our internet 

penetration rate rose from only 4% in 2007 to 25% in 2009, 

and the value of sales rose a phenomenal 470% to RM1.3 

billion in 2009 from a mere RM275 million in 2007. 

The year 2009 also marked a more dynamic presence in the 

digital sphere. In addition to online advertising and search 

engine marketing campaigns, we also built up our presence on 

Facebook and Twitter. 

The annual 10-day Malaysia Airlines Travel Fair (MATF), offering 

discounts of up to 70% on our products, also helped in 

stimulating demand. The promotional fares were offered not 

only at the booths set up for the fair, but were also offered 

through our internet booking engine and call centre. The more 

integrated approach of sales generated more than RM90 million

in revenues. Besides the MATF, we also participated in various 

local and global travel fairs throughout the year to encourage 

people to travel. 

In line with the decline in fuel prices, we moved towards 

abolishing fuel surcharges for domestic travel and lowered 

fuel surcharges for international travel in the year 2009. As a 

result, air travel became more affordable for our customers and 

boosted the demand for both leisure and business travel. 

In the year 2009, we also continued to expand our network 

by signing new codeshare agreements with Air Mauritius, 

Turkish Airlines and Jet Airways and expanded our codeshare 

partnerships with SriLankan Airlines and Royal Brunei Airlines. 

Besides boosting revenues, these codeshare partnerships 

further complement our expansive hub-and-spoke network 

strategy and provide greater choice to customers. 

3. LOWER COSTS 

The tough operating environment meant that we had to 

relentlessly manage our costs. We intensified austerity measures 

including a 7% budget cut across the board. A blanket freeze 

on all recruitment and discretionary training and travelling was 

established to further contain costs. Projects carried out over 

the course of the year were prioritised based on importance 

and criticality to the business and all discretionary expenditure 

were reviewed rigorously and put on hold, on a needs basis. 

In addition, we continued to pursue our stringent structural cost 

reduction measures as set out in BTP2. The full implementation 

of e-Ticketing saved us a further RM87 million. An additional 

RM80 million savings in distribution costs were recorded 

following the notable shift in sales to direct channels. Project 

Delta recorded savings of some RM137 million. A remarkable 

RM262 million cost savings were achieved through the 7 

waves of the Procurement Revamp initiative, which included 

initiatives involving procurement of fuel, reducing F&B wastage, 

advertising and promotions as well as overflight charges, airport 

fees and traffic handling. A further RM111 million savings were 

recorded through the “Engineering 2 Business” initiative which 

encompasses the integration of supply chain and management 

of costs in the Engineering and Maintenance area. In total, 

RM677 million in structural cost savings was recorded in the 

year 2009, which brings the total cost savings achieved in the 

past four years to about RM3 billion. 

In the course of carrying our structural cost reduction initiatives, 

the safety of our passengers remains paramount and in no way 

were safety and our customer value proposition compromised. 

FINANCIAL REVIEW 



45 

For the year under review, we recorded a net income after 

tax (NIAT) of RM490 million which includes a derivative gain 

of RM1.16 billion. The inclusion of derivative gains is a result 

of the early adoption of the new Financial Reporting Standard 

139 (FRS139). FRS 139 establishes the principles for recognising 

and measuring financial assets, financial liabilities and certain 

contracts to buy or sell non-financial items. The FRS139 was 

made mandatory in Malaysia effective 1st January 2010 and is 

similar to the International Accounting Standard IAS39, which 

is already adopted by many international airlines. Our early 

adoption of FRS139 ensures compliance with the Malaysian 

accounting standards on top of ensuring our financial results 

are easily comparable with other airlines. 

We recorded a contraction of about 25% in group revenue, 

which can be attributed to the 12% overall reduction in capacity 

as well as lower yields. When demand for air travel collapsed 

in 2009, we made a conscious decision to cut capacity and 

realign our network strategy. We cut back on capacity on our 

international routes and in the latter part of the year, redeployed 

some capacity to our domestic and regional routes. At the 

same time, we embarked on aggressive sales and marketing 

campaigns to stimulate demand. As a result, we recorded 

remarkable improvements in our passenger load factor which 

increased to 76.5% in the fourth quarter of the year, up 11.2 

percentage points year-on-year. For FY09, the passenger load 

factor increased by 0.9 percentage points from FY08, to 68.8%.

46 


As we were cognisant of the pressures on revenues, we doubled 

our efforts in containing costs. Oil prices declined significantly 

from a high of USD182 per barrel in 2008 to an average of 

USD70 per barrel in 2009. The lower average price, coupled 

with lower consumption of fuel, resulted in a 46% decrease 

in our fuel expenditure. Overall, we managed to reduce our 

operating expenditure by 20% for FY09. 

As a result of the global downturn and subsequent collapse in 

air travel, we recorded an operating loss of RM628 million. The 

year 2009 posed numerous challenges to airlines worldwide, 

and many did not survive. A number of airlines posted bigger 

losses and some even filed for bankruptcy. Malaysia Airlines, 

however, remained resilient and emerged poised for future 

growth. We were aggresive in terms of generating revenue 

and cutting costs. Indeed, in the fourth quarter of the year, 

we recorded a modest RM3.8 million operating profit, which is 

testament to the efforts we put in place throughout the year. 

Our cargo operations also saw lower revenues and yields, both 

down 33% and 20% from FY08 respectively as a result of 

notably lower demands. However, demand significantly picked 

up in the second half of the year, and MASkargo has been agile 

in capitalising on the economic recovery in emerging markets 

led by China. As a result, cargo load factor rebounded from 

67.5% in FY08 to 70.3% in FY09. 

In terms of the balance sheet, we had RM2.95 billion in cash 

and negotiable deposits at the end of FY09. Prudent capital 

management and cash conservation practices ensured that the 

balance sheet remained strong and healthy. 

SAFETY REMAINS PARAMOUNT 

Safety remains an integral part of our 5-Star MH delivery to our 

customers and we continue to ensure that the “No Compromise 

to Safety” approach is fully understood and strongly supported 

by people, policies and processes across the Company. Our 

Board-endorsed Safety Management System (SMS) seeks to 

safeguard the safety and security of our operations in all areas 

throughout the company. 

In the year under review, we emphasised a number of safety 

activities to address key safety risks. The “Raise the Safety Bar” 

(RSB) initiative was implemented under the Safety Security 

Health and Environment for 2009 Programme to address these 

risks. In addition, safety development plans were implemented 

to continuously enhance our proactive safety capabilities. Flight 

data analysis, risk assessments and line operations change 

programmes were reviewed for timely and insightful feedback 

from relevant units. The monitoring of safety management 

processes in flight operations, engineering, security, cargo and 

ground operations were done continuously to ensure that these 

are in line with the company’s quality standards.

AWARDS AND RECOGNITION 

Despite the challenges we faced in FY09, we are proud to 

note that we did not compromise on our high standards of 

products and service delivery. In the year 2009, we won the 

‘5-Star Airline’ award for the fifth consecutive year as well as 

regained the position as the ‘World’s Best Cabin Staff’, both by 

Skytrax. We were also recognised as ‘Asia’s Leading Airline’ by 

the World Travel Awards as well as the ‘Best Airline in Southeast 

Asia’ by the Global Traveller magazine. 

In addition, Aviation Week accorded us third place for its 

‘2009 Top Performing Companies’ and Jane Transport Finance 

awarded us with the ‘Aircraft Leasing Deal of the Year (Asia)’. 

MASkargo meanwhile was recognised as the ‘Best Air Cargo 

Carrier in Asia’ at the 2009 23rd Annual Asian Freight and 

Supply Chain Awards while Malaysian Aerospace Engineering 

(MAE), our Maintenance, Repair and Overhaul (MRO) arm was 

awarded the ‘2009 Best Asia-Pacific Airline MRO Operation’ 

by two leading magazines in the industry, Aviation Week and 

Overhaul & Maintenance. MAE was also recognised as the 

‘2009 Best Maintenance, Repair and Overhaul (MRO) Centre in 

Asia Pacific by Frost & Sullivan. 

Firefly, our community-airline subsidiary, was recognised as 

the Best Value Airline of The Year Award (Commercial Air 

Transportation Category) at the 2010 Frost & Sullivan Asia 

Pacific Aerospace & Defence Awards. 

All these awards and more are testament to the fact that we 

continue to deliver exceptional products and services, not only 

to our esteemed passengers, but also to our business customers. 

MOVING FORWARD 

Brighter Skies Ahead 



47 

2010 prospects are bright for Malaysia Airlines and the 

industry in general. According to the International Air Transport 

Association, the industry has seen remarkable recovery in 

passenger and cargo traffic at the end of FY09 and early 

FY10. Growth in demand is fairly significant in the emerging 

markets of Asia, Latin America and the Middle East. In Asia 

Pacific alone, passenger traffic continued to grow by 6.5% 

in January and 13.5% in February, year-on-year. Asia Pacific’s 

travellers numbered 647 million compared to the 638 million 

who travelled within North America. By 2013, an additional 

217 million travellers are expected to take to the skies within 

Asia Pacific. 

The 2010 prospects are also bright for MASkargo and the MRO 

business. With a rebound in cargo demand in Q409 led by the 

Asia Pacific region, MASkargo is looking at growing capacity 

by more than 10% in 2010. It is currently developing its 

partnership with HNA Group in China. MASkargo is also looking 

into growing its freighter network and upgrading the Advanced 

Cargo Centre at KLIA. With the first of two new A330-200 

freighters expected to be delivered in the third quarter of 2011, 

MASkargo will be in good position to capitalise on the strong 

economic growth in Asia Pacific. 

In January 2010, MAS’ JV MRO company, MAS-GMR 

Aerospace Engineering Company Ltd, signed a Memorandum 

of Understanding with Jet Airways. This is to provide exclusive 

heavy maintenance services to Jet’s fleet over the next 10 

years with an option of another 5 years. In addition, MAS has 

also sealed a 3-year deal to provide maintenance support to 

SpiceJet, India’s low cost carrier.

48 


While economic recovery has been strong, particularly in Asia, 

the European economy is lagging. As a result, global recovery 

remains fragile and the uncertainty in the longer-term outlook 

may impede further growth in demand for air travel. In addition, 

a huge number of new aircraft are expected to be delivered 

worldwide. This additional capacity will put more pressure 

on prices and yields, and yield recovery may be slower than 

anticipated. 

Nevertheless, with these challenges in mind, in year 2010 

Malaysia Airlines will strengthen all areas for growth. We will 

continue to pursue the strategies and initiatives laid out in BTP2 

and continue with the groundwork that we have laid over the 

past year in transforming Malaysia Airlines into a 5-Star carrier, 

capable of delivering the highest standards of products and 

services to its customers, at exceptional value. 

Fleet Renewal Programme 

We first embarked on our fleet renewal programme in 2008 

with a firm order of 35 Boeing 737-800 aircraft with the 

option to purchase 20 more. We expect to start taking delivery 

in October 2010 and will progressively replace our existing 

Boeing 737-400 fleet. In the year under review, we continued 

our fleet renewal programme with the order of up to 25 new 

Airbus 330-300 passenger aircraft and up to 4 Airbus 330-200 

freighter aircraft. A Memorandum of Understanding was signed 

on 22nd December 2009 for the firm order of 15 A330-300 

aircraft, with purchase options for another 10. These aircraft 

will be delivered from 2011 to 2016 and will complement the 

in-coming fleet of 35 B737-800 as well as the 6 Airbus 380 

aircraft we have on order. 

The wide-body A330-300 aircraft is expected to serve Australia, 

South Asia, China, North Asia and Middle East while the 

B737-800 will strengthen domestic and regional routes. On 

the other hand, the A380 aircraft will be used to replace our 

existing Boeing 747-400 aircraft, and will serve key long haul 

destinations such as London and Sydney. Firefly and MASwings 

have recently completed their fleet renewal exercise, both 

operating 7 and 10 ATR72-500 aircraft respectively. By 2015, all 

the aircraft ordered will be in operation and we expect to have 

one of the youngest, most fuel efficient and environmentally 

friendly fleets in Asia. 

The aim of the fleet renewal programme is predominantly to 

phase out older aircraft in favour of newer aircraft models. 

Newer aircraft models developed with the latest technology 

will help us improve our product offerings and strengthen our 

competitive position in the industry. These aircraft will also 

allow us to better align our products with what the market 

demands. A newer, younger fleet will provide better fuel 

efficiencies and reduced maintenance costs, which in turn will 

allow us to operate more efficiently and with a lower operating 

cost structure. The increased capacity and range of each of the 

aircraft we have on order, will help us better match demand 

with the capacity we deploy in our routes. For example, given 

the range and capacity of the existing B737-400 aircraft, 

these aircraft are currently deployed only to domestic and 

close ASEAN routes. However the new B737-800 can fly on a 

longer range and with more seats per aircraft. This fleet will be 

deployed beyond ASEAN to serve medium-haul routes like into 

China and India. 

To capitalize on the growth in air travel as we have seen in early 

2010, we have started adding frequencies to key destinations 

starting March 2010 to Jakarta, Bangkok, Saigon and Bangalore. 

There will also be additional flights to Perth, Auckland, Paris 

and Johannesburg. In addition, passengers flying to Brisbane 

will enjoy direct flights. As the newer aircraft start arriving, we 

will progressively increase capacity across our network. 

In March 2010 we concluded a one-for-one rights issue to 

raise RM2.67 billion to fund working capital and repayment of 

debts as well as aircraft acquisitions. This exercise was timely 

considering the economic recovery and improved capital market 

conditions. It also puts us in a stronger position to support our 

fleet renewal programme. 

A 100% leasing model is not optimal in the long term as 

operating leases are generally more expensive than on-balance

sheet financing. Hence, upon embarking on the major fleet 

refresh exercise, we have decided that we will shift to a more 

optimal mix of leased/owned fleet. This will see approximately 

1/3 aircraft being owned, 1/3 being leased and the remaining 

1/3 either being leased or owned. This flexibility will depend 

on prevailing market conditions, our cash and balance sheet 

positions as well as the availability of financing. 

Improved Pricing 

For 2010, with stronger load factors to leverage on, the focus 

will be on increasing yields. To this effect, we will continue with 

the dual pricing strategy and managing our seat inventory. In 

addition, we will aggressively benchmark our pricing against 

our peers and respond more dynamically. We will further drive 

sales across all channels, including to direct sales channels, 

i.e. through our website and mobile channels, to ensure we 

capitalise on the growing demand for air travel we have seen 

in Q1 of 2010. 

Lower Unit Cost 

Although we expect higher variable costs with future growth in 

capacity, we continue to explore avenues to further reduce our 

fixed operating costs, without compromising on safety or the 

quality of our products and services. By 2015, we aim to reduce 

our Cost per Available Seat Kilometre (CASK) by 15%. This 

aggressive target will be made possible by the cost efficiencies 

we expect to achieve with renewed fleets as well as the savings 

from owning at least 1/3 of our aircraft (as opposed to the 

current 100%-leased structure). The implementation of the PSS 

and Enterprise Resource Planning (ERP) platform will simplify 

our business processes and help us reduce costs further. 



49 

We also continue to hedge our fuel requirements. Oil prices 

steadily increased towards the latter part of 2009, and traded 

close to USD90 per barrel in December 2009. The rising cost 

of fuel and the anticipated longer term volatility in prices are 

partially mitigated with the hedging we have in place. 

Investing in our Future 

I took over the helm of Malaysia Airlines on 28th August 2009 

from Dato’ Sri Idris Jala who taught us that a crisis must never be 

wasted. Thus, we did not falter from the challenges we faced in 

2009 but instead found opportunities to be more efficient and 

productive in our business. 

Throughout the years, we have embarked on many initiatives 

to help us reduce cost, increase revenues, improve our products 

and services and other operational improvements. These were 

all done as groundwork before we embark on the next phase 

of growth. 

We will soon start taking delivery of new aircraft, we have 

implemented new systems and infrastructure both internally 

and externally and our balance sheet is well-capitalised to 

support our growth. 

All these have been and are being done for our future. We 

have set out to transform into the world’s 5-Star Value Carrier, 

and we are well on our way to achieving that. Together, we will 

work towards becoming a regional and global champion in the 

industry, one that we will all be proud of. 


Managing Director and Chief Executive Officer 

Malaysia Airlines 

April 2010

50 


Operational Review 

Airport and Flight Operations 

For the year 2009, Airport Operations (AO) managed to achieve savings of about RM30 million 

and also contributed about RM50 million in excess baggage collections. The Flight Operations 

(FO) department identified and implemented a total of 27 initiatives under Project Delta, including 

11 initiatives on fuel efficiency, and generated savings of about RM65 million. 

In the same year, AO also started the ‘Tagless’ bag project under which new rigid tags as well 

as new techniques to tag bags were introduced. This initiative reduces the instances in which 

bag tags are torn and thus reduces the amount of mishandled bags. In 2009, total mishandled 

bags dropped from 3.9 incidents per thousand passengers in 2008 to 3.3 incidents per thousand 

passengers, which is better than the industry benchmark of 3.4 cases per thousand passengers. 

Project EDGE was also launched in 2009 to improve the service level of customer service agents. 

Under the project, training was conducted throughout 2009 to inculcate good habits and service 

excellence amongst the front line ground staff. 

To enhance flight safety, the FO training arm together with 

the Flight Safety department introduced initiatives to review 

training footprints for the entire fleet in line with the latest in 

the industry. 

Ground Handling Management (GHM) undertook a 

comprehensive review of all ground handling contracts 

expiring in 2009. The reduction in ground handling rates for 

new contracts concluded in 2009 was in the region of RM130 

million, mainly coming from Australia, India and Hong Kong. 

In order to ensure that ground handlers provide the highest 

service standards, Service Level Agreements (SLA) with penalties 

for service failures, were made mandatory for all new contracts. 

In addition, the department also managed to secure the ground 

handling contracts for all new airlines operating into Kuala 

Lumpur in 2009, namely Air Astana, Air Zimbabwe and United 

Airways of Bangladesh. GHM also managed to win over Etihad 

Airways who was previously served by another ground handler.

Inflight Services 

In 2009, Inflight Services focused on improving service and food 

and beverage offerings to passengers. 

With travellers’ increasing sophistication in food and beverage, 

Malaysia Airlines strives to meet customer expectations by 

offering route specific meals through passenger profiling. 

Several workshops were conducted between our local chefs 

and chefs from India, China/Hong Kong, Japan and Switzerland 

to enhance the authenticity of dishes while maintaining the 

‘Halal’ quality benchmark. New Asian menus as well as Western 

cuisines were successfully rolled out during the year. 

In conjunction with 2009 Merdeka Day celebrations, we paid 

tribute to Tun Abdul Razak, Malaysia’s second Prime Minister, 

by offering his favourite dishes on selected routes. This initiative 

is part of our on-going efforts in promoting the country’s 

signature dishes onboard. In addition, our signature Satay 

dish and premium branded ice-cream and chocolate were also 

offered in the economy class mealbox to give more passengers 

a taste of our most popular F&B offerings. 

Engineering and Maintenance (E&M)/ MAS Aerospace 

Engineering (MAE) 

In the year under review, MAS Engineering recorded third party 

Maintenance, Repair and Overhaul (MRO) revenues of RM385 



51 

million in 2009. In February 2009, MAE marked its first foray 

overseas by signing a 50:50 joint venture agreement with 

GMR Hyderabad International Airport Ltd. The joint venture 

company, known as MAS-GMR (MAG) Aerospace Engineering 

Company Ltd., will build an MRO facility on the eastern side of 

the Rajiv Gandhi International Airport, Hyderabad. The facility, 

catering to both narrow and wide bodied aircraft checks, will 

be up and running by the first quarter of 2011. Built specially to 

service aircraft in the Indian subcontinent, MAS-GMR will have 

the capacity to service between 60-80 aircraft annually. This 

gives the company a head start when the economy recovers, 

and new capacity will be added as needed. 

On 13 May 2009, MAE and EADS SECA, a Pratt & Whitney (PW) 

designated aircraft engine repair and overhaul facility of the 

EADS Group, signed a Memorandum of Understanding (MoU) 

towards the establishment of a joint venture (JV) company in 

Malaysia to create a world class PW100 series engine MRO 

facility in Malaysia. The facility is positioned as a one-stop centre 

for engine, airframe, and component support for PW100 series 

engines, and expects to be operational in end 2010. 

On 17 June 2009, Alenia Aeronautica and MAE sealed an 

agreement to create a joint venture company for the provision 

of MRO services for turboprop commercial aircraft. The new 

company, MAS-Alenia Aeronautica Aerospace Engineering 

(MAAE), is 51% owned by MAE and 49% by Alenia 

Aeronautica. MAAE aims to offer MRO services for ATR aircraft 

within ASEAN. 

On 2 December 2009, MAS Engineering sealed 2 MoUs, 

one with PW, and another with KRAUSS GmbH Aviation 

Technologies, in its pursuit to be at the forefront of new aircraft 

technology.

52 


The MoU with PW will see both parties exploring possibilities of 

setting up a JV company for nacelle and composite repair and 

overhaul. The MoU with KRAUSS is aimed at providing parts 

repair for engines, landing gears, and airframe. 

In terms of cost savings, MAS Engineering achieved RM103 

million of savings through the E2B Cost Management and 

Integrated Supply Chain portfolio without compromising on 

safety and quality. A total of 42 Key Performance Indicators 

(KPIs) were used to measure and monitor safety performance 

and various safety action plans were identified and appropriate 

process put in place for different reporting levels to the 

management and the board through out the year. 

MASkargo 

Malaysia Airlines Cargo Sdn Bhd, MASkargo’s core business is the 

selling of space on both Malaysia Airlines passenger flights and 

MASkargo freighters as well as cargo ground handling in three 

major airports in Malaysia. MASkargo handles general cargo, 

express cargo, perishables, live animals, transshipment of cargo 

on behalf of Malaysia Airlines as well as other customer airlines. 

Through MASkargo Logistics (MLSB), MASkargo also offers 

Truck Flight services of trucking palletized cargo from various 

points for connection on board MASkargo flights at KLIA. 

MLSB also provides full Customs bonded trucking facilities and 

security escort services throughout Malaysian hubs. Equipped 

with leading cargo handling systems, MASkargo’s base is the 

Advanced Cargo Centre (ACC) - a 108-acre complex covering 

92,900sq m of processing area and is able to handle up to 700 

tonnes of cargo annually. It also features a sophisticated security 

system and the latest technology to streamline procedures and 

communication. 

In the year under review, MASkargo has initiated several 

revenue enhancement programs which include a cargo 

volumetric project to eliminate revenue leakage and back-end 

container project for last minute upliftment of containerized 

cargo. In addition to this, cost control measures through plastic 

recycling project have proved to enhance MASkargo’s bottom 

line. As a ground handling agent, MASkargo further improved 

its efficiency by improving the mishandling rates to 0.048%, 

down from the previous year’s of 0.056%. 

To date, MASkargo has achieved the ISO 9001, ISO 14001 and 

OHSAS 18001 certifications. The company’s success in acquiring 

the prestigious certifications is a formal recognition that the 

quality management, environment management as well as the 

occupational health and safety management systems in place 

are of international standards. 

2009 was an incredibly tough trading environment for the 

global airfreight industry and MASkargo was not immune to 

this. The first half of the year proved to be challenging as airlines 

aggressively adjusted capacity to address lower demand. In fact, 

it was not uncommon to see freighters being grounded globally. 

In line with the industry trends, the total cargo revenue dropped 

by 29.4% from FY08 mainly due to a reduction in combined 

yield and tonnage. Total cargo throughput at KLIA decreased 

to 536,636 tonnes from 623,314 tonnes in the previous year. 

However, this reduction of only 13.9 percent is in line with 

other cargo operators operating in this region. Nevertheless, 

the air freight market has made a remarkable recovery in the 

fourth quarter of the year. This recovery was primarily driven in 

the Asia Pacific region, and MASkargo managed to capitalise 

on the sudden increase in demand from this region. Due to 

the remarkable improvement in demand during the last quarter 

of FY09, MASkargo managed to end the financial year on a 

stronger footing. 

MASkargo was recognised as the Best Cargo Airline in Asia at 

the Asian Freight & Supply Chain Awards in 2008 and has since 

managed to remain as one of the top three air cargo carriers 

in Asia, proving its mettle as a strong cargo player in region, 

capable of handling the most complex and delicate of cargo.

Firefly 

During the year, Firefly took delivery of 2 additional ATR72-500 

aircraft. With a total fleet of 7 aircraft, Firefly added 7 new routes 

namely Subang-Kerteh, Subang-Alor Setar, Subang-Batam 

and more importantly Subang-Singapore, Ipoh-Singapore, 

Kuantan-Singapore and Kuala Terengganu-Singapore. With a 

bigger fleet size, Firefly has also extended its services to include 

charter flights. Some notable charters undertaken included 

the humanitarian flights to Padang, Indonesia, during the 

earthquake in October 2009 and also a diplomatic mission for 

a European nation to Banda Aceh. 

Passengers of Firefly enjoyed several product enhancements 

in 2009 namely online purchase of travel insurance, seat 

selection, excess baggage as well as carriage of sports 

equipment. Additionally all Firefly flights are now code-share 

with Malaysia Airlines which gives passengers the increased 

flexibility of purchase channels, interlining and connecting 

flights. Furthermore, as an added bonus for regular passengers, 

Firefly now offers a Corporate Travel Programme for corporate 

travellers as well as a Government Travel Programme for 

government officials. 

To enable ease of booking, Firefly now has airport ticketing 

offices at all its destinations as well as the KLIA Low Cost 

Terminal. Additionally, Firefly has ticketing offices in the city 

of Kuala Lumpur (KL Sentral), Penang (KOMTAR), Medan and 

Singapore. For the comfort and convenience of its passengers, 

Firefly also introduced Firefly Customer Lounges at the Skypark 

Terminal and Changi Budget Terminal. 

2009 also marked the commencement of social media marketing 

by Firefly particularly on Facebook (http://www.facebook. 



53 

com/Firefly), blogosphere (http://blog.fireflyz.com.my), and 

Twitter (http://twitter.com/FlyFirefly). This new and exciting 

communications medium is fast becoming a very efficient and 

direct method for Firefly to interact with its passengers thus 

enabling it to respond more dynamically. 

The pinnacle of 2009 for Firefly was being recognised as the 

2010 Asia Pacific Best Value Airline of the Year award by Frost 

& Sullivan. Firefly came out tops in the Asia Pacific region for its 

product match to clients’ need, feature and ease of use as well 

as price and value. 

MASwings 

MASwings provides a vital and reliable air transport link to the 

people of Sabah, Sarawak and the Federal Territory of Labuan. 

As a wholly-owned subsidiary of Malaysia Airlines, MASwings is 

capable of providing greater connectivity to the global network 

already serviced by Malaysia Airlines, with full interlining 

capacity. 

In the year under review, MASwings received a total of 6 new 

ATR72-500 aircraft. The cost efficient ATR72-500 aircrafts 

have boosted MASwings’ capacity by 40% compared to year 

2008 and allowed MASwings to increase flight frequencies 

throughout its network of 22 destinations and 39 routes. In 

2010, MASwings added 3 more ATR72-500 aircraft to its fleet, 

thereby further increasing its capacity in meeting the needs 

of the people within Sabah, Sarawak and Federal Territory of 

Labuan. In April 2010, MASwings received its 10th and final 

ATR72-500 aircraft, marking the completion of the phasing 

out of its Fokker 50 aircraft. With the 10 ATR72-500 and 4 

Twin Otter aircraft, MASwings customers can look forward to 

increased comfort and connectivity.

Madrid 

54 

Stockholm 

Bergen 

Oslo 

Sandefjord Stavenger 

Kristiansand 

Aberdeen 

Gothenburg 

Edinburgh 

Glasgow 

Copenhagen 

Belfast 

Dublin 

Amsterdam 

Manchester 

Frankfurt 

London 

Brussels 

Vienna 

Geneva 

Barcelona 

Munich 


Hub and Spoke Network 

Rome 

Cape Town 

Athens 

Helsinki 

Amman 

Cairo 

Port Elizabeth 

Istanbul 

Johannesburg 

Durban 

Beirut 

Legend 

- Operated by Malaysia Airlines - Operated by All Nippon Airways 

- Operated by Alitalia - Operated by Cathay Pacific 

- Operated by South African Airways - Operated by Etihad Airways 

- Operated by Virgin Blue - Operated by Garuda Indonesia 

- Operated by British Midland - Operated by Air Mauritius 

- Operated by Gulf Air - Operated by Qatar Airways 

- Operated by KLM - Operated by Uzbekistan Airways 

- Operated by Egypt Air - Operated by Firefly 

- Operated by Jet Airways - Operated by China Southern 

- Operated by Thai Airways - Operated by Sri Lankan 

- Operated by Iran Air - Operated by Turkish Airline 

- Operated by Oman Air - Operated by Royal Jordanian 

Tehran Tashkent 

Kuwait 

Muscat 

Bahrain 

Abu Dhabi 

Doha 

Beijing 

Delhi 

Guangzhou 

Nanning 

Hong Kong 

Mumbai 

Yangon 

Hyderabad 

Bangalore 

Chennai 

Bangkok 

Manila 

Phuket Koh Samui 

Cebu 

Colombo 

Male 

Langkawi 

KUALA LUMPUR 

Penang 

Banda Acheh 

Kota Kinabalu 

Medan Batam Bandar Seri Begawan 

Pekan 

Baru 

Mauritius 

Chengdu 

Guiling 

Wuhan 

Chongsha 

Jakarta 

Yogyakarta 

Surabaya 

Mataram Denpasar 

Perth 

Broome 

Seoul 

Shanghai 

Kansai 

Tokyo 

Fukuoka 

Nagoya 

Darwin 

Adelaide 

Melbourne 

Cairns 

Townsville 

Hamilton Island 

Mackay 

Rockhampton 

Fraser Coast 

Sunshine Coast 

Launceston Habart 

Brisbane 

Gold Coast 

Ballina Byron 

Coffs Coast 

Newcastle 

Sydney 

Canberra

ANNUAL REPORT - ChartNexus

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