KUALA LUMPUR, Oct 7 — Malaysia Airlines (MAS) aims to reduce its operating costs to as low as 20 per cent over a low-cost carrier’s cost base over five years, according to MIDF Research.
“MAS would continue to implement cost control on redundant activities and other unnecessary costs that had accumulated over time, weighing down its profitability,” it said in a research note today.
“MAS believes that at this level, it can charge 20 to 30 per cent above a low-cost carrier’s fare and consumers will snap at the bargain,” MIDF Research in a research note today.
Currently, the national carrier needed to charge 45 per cent more than the average LCC in order to cover costs, MIDF Research said.
“In essence, MAS intends to improve revenue by convincing consumers to pay 30 per cent above a low-cost carrier’s fares for a 5-Star Value Carrier,” it said.
MIDF Research said it did not expect further drastic reductions in operating costs because MAS has maintained its goal of being a full-service carrier, which necessarily incurred a high cost structure.
From 2006 to 2008, the airline trimmed operating costs by RM665 million, RM738 million and RM936 million, respectively, it added. — Bernama
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to start with. MAS need to trim a lot of deadwood in the company.
Just like the civil service, too many workers to run a airline.
Trim the workforce and and make the managers work for a start.