This is going to Kill MAS?

Lately I've been hearing horror stories about MAS, in particular its standard of service. Seems that morale is very low, and employees are merely going through the motions. Was it like this before the sale of MAS to a certain (now former) cellphone tycoon a decade ago? I cannot remember, so it probably was not (I would remember bad service, not good service - that, I would take for granted).

Well, this is not going to make the folks at MAS jump for joy - it might make a few jump ship, or jump plane, at any rate jump airline, but if you owned shares in MAS you wouldn't be looking to add to your holdings right now.

For a first, I'm going to do both the link and the entire article - talk about unnecessary infringements of copyright - however, the source is named (BERNAMA):

http://www.bernama.com/bernama/v3/news_business.php?id=239622

"Business
January 04, 2007 21:21 PM
Malaysian Aviation Industry Takes A Quantum Leap
KUALA LUMPUR, Jan 4 (Bernama) -- The Malaysian aviation industry is taking a quantum leap following the government's vision of making the country a regional hub, when it gave Fly Asian Express (FAX) the nod to divert from its normal domestic routes to offer budget long-haul services to Asia, Australia and Europe.

FAX is 50 per cent owned by AirAsia Bhd chief executive officer, Datuk Tony Fernandes, while the other two shareholders -- Kamarudin and Raja Mohd Azmi -- owned 30 per cent and 20 per cent respectively. It operates a rural air services in Sabah and Sarawak since Aug 1, 2006.

The move augurs well for Visit Malaysia Year 2007 in attracting more tourists, further boost the tourism industry and will have a spin-off effects on the economy.

It would also enable locals to travel abroad at much cheaper rates.

"Such efforts would promote travelling both inbound and outbound," said AmResearch Sdn Bhd head of research, Gan Kim Khoon.

Being the first business model of a budget long-haul service itself gives a sense of pride to the country as well as for operators, FAX and AirAsia Bhd.

However, for some it came as a surprise.

"It is a surprise. I feel a bit peculiar that AirAsia or FAX would depart from their original point-to-point destinations and test flights that are more than 3.5 hours," said Standard&Poors Equity Research airline analysts, Shukor Yusof.

FAX, together with Richard Branson's Virgin Group and Stelios Haji-Ioannou's easyGroup, the parent company of Britain's easyJet, is expected to announce tomorrow plans to offer long-haul low-cost services to the three continents.

Shukor said the market for long-haul flights was different from low-cost models or structures which were currently used by AirAsia and other low-cost carriers (LCCs) in the region.

"It really depends on what FAX or AirAsia hopes to achieve in the new venture because they have to price it differently. But then again pricing alone is not the only factor in the business," he said.

He said a passenger's decision to fly is not purely based on pricing alone but a combination of factors including connectivity, services and route selection.

"Hence, the model would be flawed if the company decides to design the long-haul budget business based on pricing structure alone.

"The model will be flawed if it is going to be based on pricing alone as long-haul flights need certain number of business class passengers who are able to pay more compared with casual travellers or backpackers.

"You got to fill your flights everyday. If you don't have enough people using your aircraft to go abroad, long distance flying becomes insignificant and your cost will rise and margins eroded," he said.

Asked on the impact on the aviation industry in Malaysia given that this would be the longest LCC route, Shukor said there would not be much in the near future.

He said this could very well serve the company and country in the long run.

Reports, quoting sources, said if the FAX-easyJet-Virgin alliance decides to fly to London as well, they could also use the Luton airport as a hub because Virgin already operates a rail link from there to central London.

The alliance would also give Virgin and easyJet an access to Kuala Lumpur's LCC terminal, the gateway to a dream Asian hub for their Europe to Australia routes.

Shukor was optimistic this local venture could be successful if there was a bigger market for such services.

Asked on Malaysia's aim to become the aviation hub for the region, both Shukor and Gan agreed there was a possibility of it being realised.

Both believed it was important to have substantial inter-connectivity and bigger volume of airlines flying in and out of Kuala Lumpur International Airport (KLIA).

"Arguably, Malaysia does not really have prominent inter-connectivity, which is a fact," said Gan.

"But should FAX pull off this feat, it would entice more airlines to touch base with KLIA," said Shukor.

On a more personal note, he said, this was the beginning of an even more adventurous journey for Fernandes and company.

"He has proven pundits wrong when he started AirAsia, which is currently the most successful and profitable low-cost airline in the region," he said."
-- BERNAMA