KUALA LUMPUR (Nov 30, 2012): Malaysia Airlines (MAS) aims to generate an additional RM1 billion in profits in two years, by re-negotiating its engineering supply and catering contracts, having a more fuel-efficient fleet, higher aircraft utilisation and turnaround time, said its CEO Ahmad Jauhari Yahya.
This would be met with just a 2 sen margin between revenue and costs. Its target is to bring revenue up to 22 sen, and costs down to 20 sen respectively.
MAS' revenue per available seat kilometre (RASK), a way airlines break down the measurement of revenue, currently stands at 20 sen, while its cost per available seat kilometer (CASK) -- how it breaks down costs -- is at 24.9 sen.
In comparison, a highly profitable airline like Singapore Airlines has a RASK of 27 sen.
"It sounds simple enough but a lot of work needs to be done," he told reporters after a luncheon with local fund managers organised by Maybank Investment Bank here yesterday.
Ahmad Jauhari insists that this time around changes made are structural changes, which will lead to sustainable operations of the national airline in the future.
Its revenue management team, for example, which now has a new head under Ahmad Jauhari's management, has become more sensitive to changes of ticket prices in the market. It is now mandated to react to market fares within six hours.
MAS is also in the midst of re-negotiating its large engineering supply and catering contracts, which make up RM1 billion and RM200 million costs per year, respectively.
Read more...This would be met with just a 2 sen margin between revenue and costs. Its target is to bring revenue up to 22 sen, and costs down to 20 sen respectively.
MAS' revenue per available seat kilometre (RASK), a way airlines break down the measurement of revenue, currently stands at 20 sen, while its cost per available seat kilometer (CASK) -- how it breaks down costs -- is at 24.9 sen.
In comparison, a highly profitable airline like Singapore Airlines has a RASK of 27 sen.
"It sounds simple enough but a lot of work needs to be done," he told reporters after a luncheon with local fund managers organised by Maybank Investment Bank here yesterday.
Ahmad Jauhari insists that this time around changes made are structural changes, which will lead to sustainable operations of the national airline in the future.
Its revenue management team, for example, which now has a new head under Ahmad Jauhari's management, has become more sensitive to changes of ticket prices in the market. It is now mandated to react to market fares within six hours.
MAS is also in the midst of re-negotiating its large engineering supply and catering contracts, which make up RM1 billion and RM200 million costs per year, respectively.
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