ANNUAL REPORT - ChartNexus

42
MALAYSIAN AIRLINE SYSTEM BERHAD (10601-W)
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