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Joined: Sun Jul 11, 1999 7:40 am

MAS Revamps Before Alliance

Sun Apr 23, 2000 5:43 am

Excerpt from this weeks New Straits Times :

Malaysia Airlines chairman Tan Sri Tajudin Ramli announced that the national carrier was finalising its study on the airline alliances it had been invited to participate in and would conclude the study by May.

After months of speculation, the airline finally came out in the open to say that it was looking at three possible groupings - Oneworld, Wings, and Qualiflyer.

MAS has been quietly assessing its options and has remained tight-lipped about its preference despite repeated questions from the Press since the rumour surfaced about their interest in joining an alliance.

The latest announcement by Tajudin is the strongest indication yet that the airline was ready to make its choice and jump on the alliance bandwagon soon.

One question remains though.

Will MAS make an immediate entry into an alliance grouping or will it merely make an announcement first and wait for other "changes" to transpire before it decides on its participation?

Sources close to the airline have indicated that the participation of Malaysia Airlines in an alliance was unlikely until the airline embarked on its long-planned image transformation, which is likely to include a logo and livery change.

This transformation is still in the pipeline, despite having been put on hold due to the economic crisis, and is likely to involve a massive cosmetic change.

Details remain sketchy and MAS officials have kept a tight lid on the issue, but many are convinced that the alliance participation remains a "no-go" until those changes take place.

One major reason behind this decision is probably because the airline wants to enhance its product and "branding" to somewhat ensure that its position in the alliance will not be a minor one.

"The idea is that the airline has to have a relatively strong image compared to its other partners so that it will not be sidelined later," said a MAS official.

What has happened to Thai International Airways in the Star Alliance will have shown MAS the effects of joining a strong alliance when an airline has a relatively weak image.

Thai International, one of the founding members of Star, found itself taking a bit player role when Star announced the inclusion of Singapore Airlines in the grouping.

It threatened to leave the alliance, not because it disagreed with SIA's inclusion, but that having two Southeast Asian carriers in the group was having a detrimental effect on its profits.

Currently, Thai International and Singapore Airlines are in talks to resolve their differences and reinstate "harmony" within the grouping.

For MAS, the idea of being in an alliance is not only to take advantage of the "seamless" travel arrangements for passengers or the sharing of airport lounges, but also to promote Malaysia to the rest of the world.

Thus its assessment will also entail how the country can be promoted through an alliance and how the airline's name can be enhanced.

Of the three alliances under consideration, Qualiflyer is the most curious candidate.

The grouping of eleven airlines led by Swissair was formed last year.

It is largely a Euro-centric alliance and it prides itself as being a "truly European alliance".

With Austrian Airlines, Air Portugal, Turkish Airlines, AOM and Sabena as the major players, MAS's participation in this alliance would provide it with better network throughout Europe (with 392 destinations served), but not much beyond that in the short term.

Qualiflyer's strength lies in its extensive network in Europe, with regional airlines like Air Littoral, Crossair, Volare Airlines and PGA Portugal Airlines supporting the major carriers.

But MAS could be attracted to the alliance simply because, as the sole Asian carrier in the grouping, it will be in the position to carry passengers fed through the partner airlines to Asia from Europe.

But in terms of enhancing its brand name, MAS is likely to be looking more towards the front-runners of the alliance competition, Wings and Oneworld.

Oneworld comes into the fray with several high profile names: British Airways, American Airlines,Qantas and Cathay Pacific. It is also joined or about to be joined by Aer Lingus, Finnair, Lan Chile and Iberia.

With 585 destinations in 136 countries and a combined fleet of 1,826 aircraft, Oneworld can prove to be as attractive to join as it is daunting to be in.


Yes, because with such big names, where does it place MAS?

It is likely that MAS was invited due to the strategic location of the Kuala Lumpur International Airport.
Yet, with Cathay Pacific already positioned as the dominant Asian carrier in the group, it seems more likely than not that the SIA-Thai saga could be replicated if MAS were to join Oneworld.

Which leaves the Wings alliance, led by KLM Royal Dutch Airlines, Northwest Airlines and Alitalia.

The talk in the market has been strong that this is the most likely alliance for MAS. The commercial actions taken recently by the national carrier seems to be pointing in that direction.

Over the past year, MAS has been signing codeshare agreements with Alitalia and Northwest to complement its existing codeshare arrangement with KLM.

Apart from this, Northwest has also switched its ground handling agent at KUL from Kuala Lumpur Airport Services Sdn Bhd to in-house Malaysia Airlines. With Alitalia, Malaysia Airlines now handles all of that carrier's services within Malaysia.

In addition, there have also been rumours that KLM is bidding for a stake in MAS under a corporate restructuring plan that could see a dilution in Tajudin's stake in the airline.

The national carrier's European offices are also quietly positioning Amsterdam, instead of traditional London, as the airline's main hub in Europe, channelling passengers from other parts of the continent through Schiphol airport.

The alliances have been waiting for the outcome of the study but months of waiting looks set to come to an end soon.

Whichever MAS chooses will not only provide the other airlines the benefits that come with an alliance, but they will also receive their fair share of the advantages in taking on board the national carrier, not least the use of KLIA to rival the Star Alliance stronghold in this region.

So the much awaited relaunch of Malaysia Airlines' image along with its alliance decision should not be too far away...

I just hope they revamp with a Navy Blue and Red striped-livery with a gold 'kite' logo. MAS aircraft just need smartening-up. I also hope they rekit all their aircraft interiors with the new dark-purple seats that are so much more pleasing to the eye than their 1990s green and turquoise attempts.

They should also get rid of those AWFUL green men's uniforms and replace them with navy blue blazers. MAS' sarong-kebaya could also do with a freshen up and perhaps be in blue and red to match the airline colours this time....hope someone in the airline is reading this!

RE: MAS Revamps Before Alliance

Mon Apr 24, 2000 3:28 pm

Thanks Mas777 for your detailed information about the MAS image revamp and alliance group joining matters. I'm really looking forward for any announcement by MAS in these issues in the future.  
Posts: 594
Joined: Sun Jun 06, 1999 3:47 am

RE: MAS Revamps Before Alliance

Mon Apr 24, 2000 6:47 pm

Well, the airticle was not that informed, since Austrian airlines is a member of STAR ALLIANCE and not of Qualifier anymore (and this was just one example)...

I think it would be the best for Malaysian and competition in general if they would join the WINGS alliance.

However, that would mean that Qualifier wouldn't be very attractive to passengers in the future, as well as the alliance around AF/Delta.
Maybe these two alliances should go together to strengthen their positions.

Just a thought...


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