Malaysia Airlines Chairman Urges Full Service Carriers To Transform For Survival

Brussels (23 June 2011). Full service airlines must transform themselves and their industry if they wished to succeed and not be driven into oblivion.

Malaysia Airlines Chairman Tan Sri Dr. Munir Majid said this at the end of his presentation at the SITA IT Summit in Brussels on Thursday.

“While IT is a strong tool and enabler which can drive strong benefits, it would be foolhardy to think of it as an end in itself. Unless the software is internally developed and proprietary, the first-mover advantages from Its adaptation do not last long enough before the enablers are commoditized and we are back to square one insofar as the competitive terrain is concerned,” he warned.

Dr. Munir asked which major industry in the world has as many as 230 companies, just going by membership of IATA and not counting the formidable low cost carriers, competing for the same piece of the action. There is such a waste of resources in terms of duplication of costs, he declared.

“No wonder profit margins are so tight and are so easily wiped off when cost items such as jet fuel rise. So what are we in business for?” he further asked.

For the world’s first truly global business, the full service airline industry is the least global in mind, Dr. Munir said. It has become too dependent on protection and closed skies, riding on a nationalistic credo out of place in a globalized and competitive world.

He called on the industry to embrace change more fundamental than the adaptation of enabling technology which is necessary but not sufficient.