Due to the addition in the richness of people around the universe, the air hose industry has become a major constituent to go. MAS being an international bearer, faces a batch of competition from well-established full service air hoses likes Cathay Pacific, British Airways, and Singapore Airlines ( Centre for Asia Pacific Aviation, 2010 ) . Similarly, low cost bearers ( LCC ) such as Air Asia, Jet Star/Qantas air hose and Virgin Blue pose a high menace to MAS. LCC airlines attract clients who prefer to wing in low monetary value and quality non being an issue. LCC ‘s have the advantage during the periods of economic crisis, as the demand for full service bearers would be low and people would prefer to go in low cost. However, as the monetary value being the chief viing component, Air Asia leads the manner due to its low operating costs. As a consequence Air Asia has surpassed MAS, presently Air Asia ‘s portion monetary value surged 46.9 % or RM1.21, while MAS rose by 7.49 % or 7.5 Sen ( Yap, 2010 ) . With the growing of the cardinal finishs, it could be possible for MAS to increase the market portion by increasing capacities on the paths. MAS could besides take advantage of the lading section by spread outing their lading warehouse. This would assist to cover the losingss of the rider section by counterbalancing with the extra gross gained from lading.
Another major menace faced by MAS is the unstable and high fuel cost, which would take to impact the operations and net income border of MAS ( Bernama, 2010 ) . In add-on, rates of airdrome going charges, security charges and landing charges tend to be increasing, which is besides a menace. As the gross watercourse of MAS is denominated from assorted currencies, MAS is besides exposed to the menace of foreign exchange rate fluctuations. Fluctuations in rising prices and involvement rates affect the exchange rate between two currencies. Apart from that, there are a figure of utility menaces that affects MAS at the present clip. The most outstanding menace is due to the Internet. The Internet has facilitated electronic methods of communicating which involve videoconferencing, teleconferencing and electronic mail. Thus this replacement lowers the potency of concern travelers to wing to other finishs to fulfill their demands. Furthermore, in domestic MAS market there are many replacements like autos, coachs and trains, nevertheless these manners are considered as low menaces because they are besides affected by environment tendencies, i.e. the rise of oil monetary value. To conflict a state of affairs of such a crisis, MAS could concentrate on bettering grosss, optimising the MAS web and cut downing cost as retaining high criterion. This would enable MAS to optimise their economy and when there are crisis for fuel and economic system they could utilize the economy to prolong in the market. MAS could besides cut down the costs by extinguishing services that bring no obvious value to their client, and those could be office infinite, inordinate fuel consumption by the pilots and besides with the on-going care of installations and assets. By this MAS could increase the quality of services and merchandises they offer.
Another major menace for MAS is terrorist act. Since the incident of September 11, people are afraid to wing and their assurance towards air hoses has decreased. As MAS operates in over 100 finishs, if an incident occurs MAS would hold to hold their flights which would impact their net income border.
In order to come in the air hose industry, big sum of capital is required to buy or to rent aircrafts and other resources that are required like staff and offices. Therefore, there is a high barrier for come ining the air hose industry which reduces the menace of new comers to MAS. However, when adoption is inexpensive, there are possibilities for more air hoses to come in the industry. Government statute law and ordinance could besides be major barriers for new entrants. Since MAS has been protected by the Malayan authorities on the path to Sydney and Seoul Incheon ( Boynton & A ; Thomas, 2010 ) , this declines the landing rights for other air hose and could present as a menace to other air hoses. Due to limited takeoff and landing rights, it would be hard for new bearers to happen suited airdromes. In order to cut down the entrants to market, MAS could alliance with other major air hoses to beef up their place by tapping into their spouses set downing slots and rights which in bend would do hard for newer air hoses to perforate the market.
Business Model Recommendations
Presently, MAS follows a full-service bearer ( FSC ) concern theoretical account. However, Low-cost bearers ( LCC ) have been turning quickly in North America, Europe, Asia and Latin America ( Holloway, 2008 ) . In order to stay sustained and competitory in the current market, MAS has to convey alterations to the current concern theoretical account. The growing of the budget air hoses has intensified competition and MAS has found it impossible to vie in low-priced, point-to-point section of the air hose market. MAS could widen LCC for short draw and medium draw paths ( extend from local to regional ) to guard of competition from the budget air hoses, and could stay as full-service bearer ( FSC ) for long haul paths. The higher merchandise quality that can be offered by FSC theoretical account could be used to pull clients who are willing to pay a premium for extra services. In add-on, the LCC air hoses largely concentrate in the regional finishs, hence, FSC theoretical account could profit by winging the long-haul paths.
Furthermore, MAS could take into history the possible demand of increasing siting capacity during the year-end vacation season and other peak seasons. In order to run into peak client demands, they could supply extra flights in the busy paths such as Sydney and London ( Chaudhry, 2010 ) . Apart from that, the demand for MAS finish to Indonesia seems to be high, where MAS has carried 800000 riders between Indonesia and Malaysia last twelvemonth ( TheStar online, 2010 ) . Therefore, MAS could besides increase their flights between these two paths. This would complement the regional touristry activities and promote Malaysians to see their friends and household. MAS could besides end the operations of unprofitable paths. Similarly, MAS could offer promotional steps which could include particular privileges to authorities functionaries, pupils and inducements to frequent circulars. In order to pull authorities functionaries, MAS could supply free upgrade installation, which would enable the riders to upgrade to a higher category of seats on a full menu ticket purchased on international sector. In add-on, they could let the usage of MAS aureate sofa as portion of the privileges to those riders.
MAS should guarantee that their fleet is immature, in this manner mechanical failure would be rare, few flights would be cancelled and few return offs would be delayed. In add-on, it would be more fuel efficient and would necessitate less fix and care. In order to cut down cost, MAS could analyze their client ‘s inflight eating tendencies. By analysing the consequences they could cut down costs by lading fewer repasts during the hours where clients do non prefer to hold big repasts ( e.g. late dark ) . MAS could besides fudge on a fixed oil monetary value with their jet fuel suppliers via a common understanding contract with their fuel provider for US $ 85 for a barrel for the following 5 old ages. Prognosiss show that the monetary value of the petroleum oil would lift to an norm of US85 a barrel following twelvemonth and $ 100 in 2012 ( Koc, 2010 ) . By making so, they could efficaciously pull off their operation cost based on the oil monetary value fluctuations.
MAS ‘s two chief assets are their planes and the employees, and MAS could construct schemes to efficaciously pull off them so that they could vie with their rivals and lower their operations cost. This could be done by carry oning preparation plans which include classs on cultural sensitiveness, societal behaviour, classs on demeanor and wine grasp. Courses which focus on the necessity of cut downing the cost on the bringing of service could besides be provided to educate employees and to enable them to lend to the purposes. By carry oning such preparation courses the employees would be cognizant to cover handle ad hoc state of affairss which would reflect back to their service excellence. Supplying preparation would besides enable the employees to play their function efficaciously by heightening their capacity to read clients purpose and respond to them in a originative manner. By concentrating on these two assets, MAS could supply better service than their challengers and by constructing dedicated work forces.