By Sharen Kaur
KUALA LUMPUR: Malaysia Airlines Bhd (MAB), the new company arising from the restructuring of Malaysia Airlines (MAS), is off to a good start as several key messages delivered at a recent townhall meeting indicate that it will be on track to deliver profits in three years.
Key officials at the townhall meeting, who had discussed major shareholder Khazanah Nasional Bhd's MAS Recovery Plan, touched on the progress of the provisional business plan and operational transformation.
Sources said the provisional business plan, which was in progress, included a review of the end-to-end processes, people requirement, tools and systems.
"The provisional vision of MAB is to be the leading airline in Kuala Lumpur that offers a network, products and services, and price proposition that the customers will value.
The network will focus on key markets, which include domestic, Asean and regional, matching it to the fleet requirement.
"It is expected that there will be a 10 per cent reduction this year in terms of capacity and some routes in Europe will be affected. There will be plans on how to connect passengers to the affected routes," a source told Business Times.
Khazanah announced last week that the restructuring of MAS was showing steady progress for the company to return to sustained profitability.
The restructuring of MAS involves a "complete overhaul".
This entails the transformation of MAS' corporate structure, financial position, operating performance and human capital management, guided throughout by the principles of fairness, transparency and compassion.
Critical milestones achieved so far include a 25 per cent reduction on monthly bills to MAS, and RM1.38 billion that was disbursed to shareholders pursuant to the successful selective capital reduction and repayment exercise, as part of the first phase of conditional investment funding amounting to RM2 billion.
According to key MAS officials, products and services for MAB are being reviewed in order to avoid overlapping with the business models of low-cost carriers in Malaysia.
"The plan is to adopt a product bundling strategy so that there is no overlapping of business and redundancy in operations," said an official.
He said for people requirement, there was an ongoing talent review programme, which would take into consideration several points to assess internal talent.
These include personal data, performance and disciplinary record (where applicable), experience, periodic technical accreditation and aspiration to join MAB.
The official said the selection or matching would be done by its board restructuring committee and global human resource management firm Hay group.
"Ultimately, it has to be agreed by MAB chief executive officer-designate Christoph Mueller. Nothing is final until the staff receive official letters from the company.
"Terms and conditions of MAB have to be sustainable for the business and aligned to market.
"Guiding principles to establish the terms and conditions include fresh start, performance and productivity-driven rewards, compensation to be benchmarked versus market and best practices," added the source.
On operational transformation, he said MAB would look at three key areas - frontline, back office and subsidiaries.
"This is done in order to have the right manpower size with competitive terms and conditions.
"Processes and systems will be redesigned aggressively and there will also be a reduction in cost structure for short-hauls.
"The other focus will be to centralise shared functions in a bid to lower operational cost," he said.
KUALA LUMPUR: Malaysia Airlines Bhd (MAB), the new company arising from the restructuring of Malaysia Airlines (MAS), is off to a good start as several key messages delivered at a recent townhall meeting indicate that it will be on track to deliver profits in three years.
Key officials at the townhall meeting, who had discussed major shareholder Khazanah Nasional Bhd's MAS Recovery Plan, touched on the progress of the provisional business plan and operational transformation.
Sources said the provisional business plan, which was in progress, included a review of the end-to-end processes, people requirement, tools and systems.
"The provisional vision of MAB is to be the leading airline in Kuala Lumpur that offers a network, products and services, and price proposition that the customers will value.
The network will focus on key markets, which include domestic, Asean and regional, matching it to the fleet requirement.
"It is expected that there will be a 10 per cent reduction this year in terms of capacity and some routes in Europe will be affected. There will be plans on how to connect passengers to the affected routes," a source told Business Times.
Khazanah announced last week that the restructuring of MAS was showing steady progress for the company to return to sustained profitability.
The restructuring of MAS involves a "complete overhaul".
This entails the transformation of MAS' corporate structure, financial position, operating performance and human capital management, guided throughout by the principles of fairness, transparency and compassion.
Critical milestones achieved so far include a 25 per cent reduction on monthly bills to MAS, and RM1.38 billion that was disbursed to shareholders pursuant to the successful selective capital reduction and repayment exercise, as part of the first phase of conditional investment funding amounting to RM2 billion.
According to key MAS officials, products and services for MAB are being reviewed in order to avoid overlapping with the business models of low-cost carriers in Malaysia.
"The plan is to adopt a product bundling strategy so that there is no overlapping of business and redundancy in operations," said an official.
He said for people requirement, there was an ongoing talent review programme, which would take into consideration several points to assess internal talent.
These include personal data, performance and disciplinary record (where applicable), experience, periodic technical accreditation and aspiration to join MAB.
The official said the selection or matching would be done by its board restructuring committee and global human resource management firm Hay group.
"Ultimately, it has to be agreed by MAB chief executive officer-designate Christoph Mueller. Nothing is final until the staff receive official letters from the company.
"Terms and conditions of MAB have to be sustainable for the business and aligned to market.
"Guiding principles to establish the terms and conditions include fresh start, performance and productivity-driven rewards, compensation to be benchmarked versus market and best practices," added the source.
On operational transformation, he said MAB would look at three key areas - frontline, back office and subsidiaries.
"This is done in order to have the right manpower size with competitive terms and conditions.
"Processes and systems will be redesigned aggressively and there will also be a reduction in cost structure for short-hauls.
"The other focus will be to centralise shared functions in a bid to lower operational cost," he said.
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