Critical Analysis- Malaysian Airlines
Criticial Analysis- Malaysian Airlines
The essay is about critical analysis ofthe project business case, related to the financial crisis of Malaysian Airline System. The Malaysia Airline System reported a loss of $1.3 billion over the past three years before 2014. This loss was unacceptable to many parties such as the stakeholders, the government and especially the employees of the organization. Supported as being the national carrier, efforts to come out of this crisis must not onlybe directed towards revamping but also towards rebuilding the safety reputation after the tragic incident of MH370 in 2014.
CEO of company, Ahmad Yahiyaannounced losses of $96 million and reported 12 point recovery plans to revamp the airline system (GUNASEGARAM, P., 2014). This essay starts with the history of the airline, the sudden financial crisis and then analysis of the management plans for the recovery from these crises.
2. Background and environment of project
In the financial year 2005, Malaysia Airlines underwent a loss of RM1.3 billion. Credit for the financial period was up by 10.3% or RM826.9 million, in comparison to the same period for 2004, driven by a 10.2% growth in passenger traffic (Malaysia Department of Statistics Web site 2006). International passengers increased the revenue by RM457.6 million or 8.4%, to RM5.9 billion, while cargo revenue faced a downfall by RM64.1 million or 4.2%, to RM1.5 billion
(Malaysia Airlines to cut up to 5,000 jobs 2014).
Costs increased by 28.8% or RM2.3 billion, amounting to a total of RM 10.3 billion, mainly due to escalating fuel prices. Other factors responsible for cost increment included employee costs, operations costs, handling and landing fees, maintenance and overhaul charges,
(CrisishardonMAS 2008), Widespread Assets Unbundling charges and costs of leases.
Figure 2. 1: Malaysian airline quarterly net income (RAGHUVANSHI and NG, 2014)....