MAKUNG INTERNATIONALAIRLINES COMPANY, LTD.: Taiwan (1989-1996). Formed at Kao-hsiung in January 1989, Chairman Chen Wen Wu and Managing Director Chuang Chao-Cheng’s new third-level airline is provided with the last two British Aerospace BAe (HS) 748s (Series 2B) to be manufactured. Services are undertaken to Makung in the Pescadores Islands, Tainam, and Taipei. Daniel Wang becomes managing director in 1990 and the first BAe 146-100 regional jetliner is placed into service late in the year.
Another BAe 146-100 joins the fleet in 1991 followed by a third in 1992. The two U. K.-manufactured jetliners are employed to inaugurate a scheduled service from Taipei to Taitung and a charter route from Kao-hsiung to Laoag in the Philippines.
Airline employment stands at 300 in 1993-1994 and the fleet is increased by the addition of a leased Boeing 757-236. It inaugurates daily roundtrip service from Kao-hsiung to Taipei.
The Boeing is found unsatisfactory and is removed at the end of the second year in favor of a fourth BAe 146-100. The company continues to offer 30 daily roundtrip sectors from Taipei to Kao-hsiung.
In April 1995, a 32% stake in the company is sold to EVA Air, Ltd. for $18.2 million. In May 1996, the airline is renamed UNI Airways Corporation, Ltd.; planes will be flown in the markings of UNI Air.
MALAYAN AIRWAYS, LTD.: Malaya (1937-1962). Although it is founded by Straits Steamship Co., Ltd. and Ocean Steamship Co., Ltd. (Alfred Holt & Co. and Imperial Airways, Ltd. are associated) and registered on October 21, 1937, political problems and the advent of war keep MAL from beginning revenue service.
Mansfield & Co., the shipping concern, resurrects MAL at Singapore in April 1947. Revenue flights commence on May 1 as two Airspeed AS.65 Consuls inaugurate a Singapore-Kuala Lumpur-Ipoh-Penang route. Frequencies from Singapore to Kuala Lumpur become thrice daily by year’s end, while flights to Ipoh are daily and those to Kota Bharu are offered four times per week.
In early 1948, British Overseas Airways Corporation (BOAC) purchases a 10% interest and replaces the Consuls with seven Douglas DC-3s. Services to Bangkok commence in April, followed by flights in June 1949 to Kuching, Labuan, and Jesselton. Singapore to Rangoon via Mergui frequencies begin in September. Routes are extended in 1950 from Singapore to Saigon, Jakarta, Palembang, and Meda.
The Kuala Lumpur-based subsidiary Federation Air Services, Ltd. is created in November 1951 to assist in the provision of local services near its home city. During 1952-1957, routes and frequencies are improved and increased as services are extended not only to additional domestic destinations, but also to Sabah, Sarawak, and Brunei. During the latter year, shareholding is revised. BOAC and Qantas Empire Airways, Ltd. share a 64.5% stake with the governments of Sarawak, Brunei, and North Borneo, plus the Ocean Steamship Companies (6.25% each); private investors acquired 4.25% shareholding.
MAL is officially transformed into a publicly owned company on February 6, 1958. On March 1, Federation Air Services, Ltd. is merged into its parent. Meanwhile, local British governments and BOAC form Labrian-based Borneo Airways, Ltd.
Early in 1959, the company acquires a Douglas DC-4 from Qantas and employs it to inaugurate pooled services to Hong Kong in association with BOAC-backed Hong Kong Airways, Ltd. (HKA). In August, two Vickers Viscount 760s, purchased from now-defunct HKA are placed on regional routes.
Borneo Airways, Ltd. assumes a feeder role in 1960 as Malayan, in pool with Cathay Pacific Airways (Pty.), Ltd., begins service in May to Hong Kong employing either a leased Qantas Lockheed L-1049E or a Cathay Lockheed L-188A Electra. The Hong Kong service is suspended in October after just six months. A BOAC Bristol Britannia 312 is leased during the summer of 1961 and used to resume flights to Hong Kong on September 2. The carrier’s name is changed to Malaysian Airways, Ltd. in November 1962.
MALAYSIA AIR CHARTER COMPANY, LTD. (MAC): Malaysia (1962-1986). MAC is formed at Kuala Lumpur in February 1962 as a general aviation operation, providing cargo and passenger contract services within Peninsular and East Malaysia. Unscheduled Cessna 310 charter flights commence on May 14. In 1969, the Indonesian subsidiary SMAC (Sabang Merauke Raya Air Charter) is set up as a joint venture with a private Malaysian concern; the operation becomes freestanding on North Sumatra in 1972.
MAC is acquired by Datuk Mohd Fathi bin Haji Ahmad in 1975 and by Marsfin Sdn. Bhd. in 1978. Scheduled passenger services are undertaken linking the carrier’s base at Kuala Lumpur with Penang, Pulau Langkawi, and Alor Setar and scheduled all-cargo flights are flown to and from Johor Bahru in East Malaysia.
The fleet of Managing Director R. J. Milne’s 38-employee carrier comprises 1 each Curtiss C-46R, Shorts SC-7 Skyvan, Britten-Norman BN-2 Islander, Cessna 310, and Piper PA-23 Aztec. A bright multicolor scheme is given each aircraft, giving the company the nickname of “The Rainbow Line.”
During the next four years, Mersing and Pulau Tioman join the route network and the fleet is upgraded by the addition of three Skyvans, one Islander, and a Bell 206B JetRanger helicopter. The workforce grows to 80.
In late 1980, an interest is taken in Malaysia Helicopter Service,
Ltd. and in the new Sri Lankan domestic carrier Serendip Airways, Ltd.
During the early 1980s, flights are laid on to Malacca and to Singapore’s Seletar Airport, the latter in cooperation with the Singapore Airlines, Ltd. subsidiary Tradewinds Private, Ltd. Airline employment grows to 150 and additional flight equipment is purchased: one Shorts 360, three Dornier 228-212s, and three SC-7s.
Despite these improvements, passenger traffic falls off by almost 2,000 enplanements per year; in 1981, 13,003 passengers are flown. 11,208 people are carried in 1982 and 9,942 in 1983. Unable to maintain its viability in the face of these traffic figures and their attendant economic reversals, the company is forced to cease operations in late 1986. Its routes pass to Malaysian Airline System (MAS).
MALAYSIAAIRLINES, LTD. (MAS): 33rd Floor, Bangunan MAS, Jalan Sultan Ismail, Kuala Lumpur, Federal Territory, 50250, Malaysia; Phone 69 (3) 261-0555; Fax 69 (3) 261-3472; http:// Www. malaysiaairlines. com. my; Code MH; Year Founded 1987. Malaysian Airlines System, Ltd. (MAS) is renamed on October 15, 1987; although the MAS acronym is kept, it is not initially incorporated into the company’s logo or aircraft livery. Still 42% owned by the government-controlled Bank Negara, the 11,154-employee carrier owns a fleet of 37 aircraft, which is enhanced by delivery of a Boeing 737-236 ordered the previous year.
The new corporate identity is accompanied by new personnel uniforms and aircraft livery, which boldly displays the word “Malaysia.” A handsome 34-story office tower, built on some of the most expensive real estate in Kuala Lumpur, is occupied and the airline logo, a stylized form of the traditional Kelantan wau (kite), is modernized and aircraft color schemes are changed.
The company’s lone B-747-3H6C continues to make a weekly roundtrip flight from Kuala Lumpur to Zurich via Dubai and Vienna.
Enplanements for the year total 6,025,944, a 9.5% increase, while cargo is up by 33.2% to 343.35 million FTKs. Profits total $44.2 million (operating) and $41.6 million (net).
The workforce is increased by 5% in 1988 to 11,453 and the fleet now includes 1 B-747-3H6C, 1 B-747-2H6C, 3 DC-10-30s, 5 Airbus Industrie A300B4-203s, 13 B-737-236s, 11 Fokker F.27-500s, and 4 de Hav-illand Canada DHC-6-300 Twin Otters. Orders are made or outstanding for 6 B-747-4H6s, 9 Fokker 50s, and 16 B-737-336/436s.
Joint services commence with Air Mauritius, Ltd. in March over a route from Kuala Lumpur to Mauritius. In October, the carrier joins with Singapore Airlines, Ltd. subsidiary Silkair, Ltd. to offer a joint weekly B-737-236 service to Langkawi Island, Malaysia, with a stopover at Penang Island. This year, MAS receives the Pride in Excellence Award from Boeing; the carrier is the first to receive the honor, given in recognition of B-737 on-time reliability in three consecutive years.
Passenger boardings jump 9.3% to 6,584,697 and freight increases by 9.1% to 373.21 million FTKs. Revenues move upward by 12.6% to $597.7 million, allowing a 6th consecutive profitable year. Bottom lines show a $61.5-million operating profit and net gain of $60 million.
The payroll reaches 13,339 in 1989, a 16.5% boost, and the fleet includes 37 transports, with another 31 on order. The route network includes 45 domestic, 10 regional, and 20 foreign destinations and on January 1, service is launched to New Delhi and Karachi. In March, the carrier orders six B-747-4H6s while two leased B-747-2H6Cs joins the fleet in April and May.
Weekly service is inaugurated to Guangzhou, Zurich, and Fukuoka on June 1 and Istanbul, Brisbane, Auckland, Brussels, Vienna, and Ho Chi Minh City flights begin later on.
On June 12, the company’s new weekly B-737-236 service to Guangzhou is suspended as the result of the political unrest at Tiananmen Square and the declaration of martial law in the city just hours after the arrival of the second flight (and its single passenger). The airline promises to review the situation in July.
Bookings by the Pilgrims Management Board are so abundant that the company must wet-lease three DC-10-30s from World Airways to handle all of the Hadj customers. The carrier joins IATA on July 1.
The first of nine Fokker 50s arrives in August and is placed on regional routes. B-737-236 weekly service is now restored to and from Guangzhou.
The first new B-747-4H6C is delivered in October and placed into service between Kuala Lumpur and London in December. Meanwhile, in November, the Los Angeles frequencies are increased by two per week, again via Honolulu.
Customer bookings for the year swell 14.9% to 7,568,790 while cargo is up by 8.2% to 403.73 million FTKs. Revenues ascend 13.9% to $728.6 million and costs allow the operating profit to reach $75.2 million. The net profit, however, slips to $58 million.
Company employment is boosted 21.7% in 1990 to 16,227 and the fleet now includes 59 aircraft. In cooperation with Iran Air, joint services are inaugurated during January from Kuala Lumpur to Tehran. The airline’s portion of the ABACUS reservations system comes on line and as the result of an air service agreement between Malaysia and India, the company, in April, is able to double its Kuala Lumpur to Delhi service to twice weekly. Several other new routes are started, including one to Beijing.
Throughout the year, the airline supports the national tourism agency’s Visit Malaysia Year, focusing on the U. S. market. During October, a joint service agreement is signed with All Nippon Airways Company, Ltd. (ANA). It is followed by an agreement with Vietnam Airlines in November providing for joint services from Kuala Lumpur to Ho Chi Minh City.
Under the Air India, Ltd. pact, joint flights to New Delhi from Kuala Lumpur commence in December. Pooled frequencies will be undertaken from Penang and Kuala Lumpur to Madras. Also during the month, the company accepts its 10th Fokker 50, the 100th of its type built.
Passenger boardings increase 19.8% to 9,065,987 while freight climbs 42.5% to 575.37 million FTKs. Revenues perk up 22.1% to $890 million, but expenses, led by fuel costs following Iraq’s August invasion of Kuwait, rise quickly and cut the operating profit to $54.6 million. Still, only 13 airlines in the world have a better return. Net profit climbs to $82.2 million.
Although the payroll is decreased by 26.1% in 1991 to 12,000, the fleet is increased by the addition of eight new aircraft. In January, joint flights are inaugurated with Garuda Indonesia between Kuala Lumpur and Denpasar. The agreement with All Nippon Airways Company, Ltd. (ANA) takes effect during the first quarter and employing an MAS DC-10-30, joint roundtrip service is inaugurated in March from Kuala Lumpur to Nagoya. Managing Director Tan Sri Abdul Aziz takes leave in April and is succeeded on a day-to-day basis by new CEO Dato Kamaruddin bin Ahmad.
A freight block space agreement is inked with Korean Airlines/ Korean Air (KAL) in July covering all-cargo services over the route from Kuala Lumpur and Penang to Seoul.
Aziz retires on September 12. The same day, Chairman Mohar bin Raja Badiozaman is succeeded by Zain Azraai. Frequencies commence during the fourth quarter to Mexico City, Dhaka, Cebu City, and Surabaya.
Customer bookings leap upward by 16.3% to 10,511,072 while cargo rises 23.6% to 712.52 million FTKs.
The workforce grows 14.8% in 1992 to 19,874 and the fleet includes 1 owned and 3 leased A300B4-203s, 5 chartered B-737-2H6As, 1 each leased B-737-2M6A and B-737-2H6C, 10 owned B-737-4H6s, 7 chartered B-737-4Q8s, 4 leased B-737-4S3s, 10 chartered B-737-4Y0s, 2 B-737-405s leased from Braathens SAFE, 2 owned B-737-5H6s, 1 B-747-219B leased from Air New Zealand, Ltd., 2 B-747-236Bs, 1 B-747-3H6C, 3 B-747-4H6s, 2 B-747-4H6Cs, 6 DHC-6-310s, 2 leased and 4 owned DC-10-30s, and 12 Fokker 50s. Orders are outstanding for 10 A330-322s, 33 B-737-4H6s, 4 B-737-5H6s, 8 B-747-4H6s, and 1 Fokker 50.
During July, the company arranges a 3-year, $170 million syndicated loan with 27 international banks to finance its expansion. Scheduled services are inaugurated to Phnom Penh, Munich, Madrid, Johannesburg, and Hanoi.
Twice-weekly roundtrip B-747-4H6 service is inaugurated on October 25 from Kuala Lumpur to Mexico City via Taipei and Los Angeles.
On November 13, capitalization is doubled, being increased, by a rights issue of 350 million shares, to a total of 700 million shares.
Passenger boardings swell 17% to 10,976,438 and freight jumps 22.9% to 740.12 million FTKs. Revenues ascend to $1.3 billion and allow an operating surplus of $14 million. The net gain is $40.5 million.
In 1993, Managing Director Ahmad oversees a workforce of 19,900, up a slight 0.1% over the previous year. The fleet is increased by the addition of 21 B-737-4H6s, 4 B-737-5H6s, and 7 B-747-4H6s.
In March, a 308.2 million ringgit ($120 million) syndicated term loan facility is secured to help pay for all the new aircraft. By early spring, the carrier is able to claim more “Baby Boeing” maintenance experience than any other airline in Asia. Meanwhile, the new Jumbojets are employed exclusively on the nonstop routes to Europe, including Amsterdam, Paris, Madrid, Brussels, Istanbul, Frankfurt, Munich, Vienna, and Zurich. A daily nonstop roundtrip is offered between Kuala Lumpur and London (LHR).
In May, the carrier enters into a joint venture agreement with MTU Maintenance, GmbH. to form the engine repair operation Airfoil Service Sdn. Bhd. The company begins to participate in the frequent flyer program of Continental Airlines during June.
On July 1, a joint frequent flyer program, Passages, begins in cooperation with Singapore Airlines, Ltd. and Cathay Pacific Airways, Ltd. The three jointly incorporate Asian Frequent Flyer (Pty.), Ltd. to market the program, each taking a 33.3% stake. New markets are opened at Bali and Cebu; however, DC-10F flights are suspended to Amsterdam and Los Angeles.
Simultaneously, a joint shuttle service is opened in cooperation with Singapore Airlines, Ltd. between Kuala Lumpur and Singapore. The same month, the company begins to cross-share in the frequent flyer program of Ansett Australia (Pty.), Ltd., a move that will also be initiated with British Airways, Ltd. (2) in November.
Joint services commence with Dragonair, Ltd. in October on frequencies from Kuching and Kota Kinabalu to Hong Kong.
Customer bookings plunge 12% to 10,201,000 and cargo falls double that percentage, 20.2%, to 585.13 million FTKs. Although a $6-million operating profit is recorded, so too is a net loss of $607,000.
The number of employees inches up 0.1% in 1994 to 19,746. After borrowing $694 million, Malaysian entrepreneur Dato’ Tajudin Ramli, chairman of Malaysian Helicopter Services, Sdn. Bhd., (MHS), a subsidiary of his telecommunications conglomerate Technology Resources Industry Berhad, purchases 32% controlling interest (224 million shares) of the carrier from the Bank of Negra, the nation’s central bank, which holds a 42% stake. This swapping of shares, worth 1.8 billion ringgit ($700 million), will make TRIB the airline’s largest shareholder, but will not be announced until June 11.
In its efforts to promote the annual 10-day Raid Gauloises race, organized by the Paris-based Gerard Fusil Management Co. and scheduled to be held in Sarawak state on Borneo, the company’s in-flight magazine portrays the isolated portions of the area as a “golden land of headhunters, hills, and hornbills.” The Federation of Malaysian Consumers Associations roundly condemns the airline for its “damaging article” that claims headhunting is a passion among the tribesmen of Borneo.
A 17-year-old stowaway is found dead in the landing gear compartment of a B-747-4H6 after its March 15 arrival at Johannesburg on a service from Kuala Lumpur.
In May, a B-737-4H6 is leased to India’s Jet Airways, Ltd.; under contract, MAS also agrees to provide maintenance, technical, and training support.
Having also arranged to purchase a 25% stake in the U. S. cargo carrier World Airways earlier in the year, Malaysia Airlines and MHSL join with World on June 15 to forge a code-sharing deal for a freighter service to Europe and the U. S. using a World MD-11.
The tripartite alliance takes effect on June 19 when a weekly service is opened from Kuala Lumpur to Amsterdam via Dubai and a second is started from Kuala Lumpur to Los Angeles via Penang, Taipei, and Anchorage.
Code-sharing begins, also in June, on Ansett New Zealand, Ltd. flights between Christchurch and Auckland.
In August, 10% equity is sought in Tail Winds, Ltd., the parent of Jet Airways, Ltd. Gulf Air, Ltd. and Kuwait Airways, Ltd., however, are unwilling to dilute their stake and the arrangement fails to materialize. During the summer, flights are undertaken to Osaka (Kansai), Cape Town, Rome, and Buenos Aires.
The government appoints the new majority owner, Dato’ Tajudin Ramli, chairman on August 6, succeeding Tan Sri Zain Azraai Zalnai Abidin. In September, the new chairman calls for a major restructuring of the airline.
Operations continue apace during the remainder of the year. A two-bay, wide-body maintenance workshop and office and an engine maintenance center are completed at Kuala Lumpur and Aircraft Engine Repair and Overhaul (Malaysia) Sdn. Bhd. becomes a wholly owned subsidiary.
A major marketing agreement is initiated with Ansett Australia (Pty.), Ltd. in October. Under its provisions, the two companies link their frequent flyer programs and undertake shared code frequencies from Kuala Lumpur to Adelaide, Melbourne, and Sydney and via Sydney and Melbourne beyond to Adelaide, Cairns, Canberra, the Gold Coast, and Hobart.
On October 30, B-737-4H6 service is inaugurated from Johor Bahru in Malaysia to three cities in Indonesia; the new weekly routes are Jakarta-Johor Bahru-Kuala Lumpur; Denpasar-Johor Bahru-Kuala Lumpur; and Surabaya-Johor Bahru-Kuala Lumpur.
In November, the carrier forms a joint venture with three other partners to operate a flight kitchen in Madras, capable of offering 5,000 meals per day. The company becomes a marketing partner of British Midland Airways, Ltd. during the month. In addition to providing BMA passengers through connections to some 40 Asian and Pacific destinations, MAS passengers flying from Kuala Lumpur into Britain via London (LHR) are able to seamlessly connect to the BMA U. K. destinations of Belfast, Dublin, Edinburgh, Glasgow, Leeds/Bradford, and Teesside.
A block-space agreement takes effect with Myanmar Airways in December on flights from Kuala Lumpur to Yangon. Also in December, MHSL takes shareholding in Royal Air Cambodge that results in a management and operational contract for MAS from the Cambodian airline.
Overall, passenger boardings decline another 12.6% to 10,844,000 while freight does better, growing by 7.8% to 765.92 million FTKs. Revenues advance to $1.56 billion and allow profits of $16.4 million (operating) and $2.7 million (net).
Airline employment is reduced by 19% in 1995 to 16,000. A comprehensive 10-year marketing and code-sharing alliance is entered into with Virgin Atlantic Airways, Ltd. during the third week of January. In addition, the pair agrees to joint cabin crews and linkage of their frequent flyer programs.
In February, a block-space agreement begins with Aerolineas Ar-gentinas, S. A. on flights from Buenos Aires to Cape Town, Johannesburg, and up to Kuala Lumpur.
A 36-year-old stowaway from Kalimantan, Habsah Abdul Kadir, is found out during a March 15 service from Kuala Lumpur to Kota Kinabalu when a passenger manifest check in flight reveals one extra passenger. The young Indonesian maid is detained at the plane’s destination, where it is found that she does not have a passport, flight ticket, or boarding pass. Malaysian Transport Minister Ling Liong Sik orders an investigation into the fifth major security breach at Kuala Lumpur Airport in the last year.
Virgin Atlantic Airways, Ltd. and MAS, employing the latter’s aircraft, commence twice-daily roundtrips between Kuala Lumpur and London on April 1. The total of weekly flights to the British capital for the Malaysian flag carrier is thus increased from its present eight.
The two link their frequent flyer programs on May 22 and VA passengers are able to commence block-seat flights aboard MAS aircraft on frequencies from London to Kuala Lumpur, Sydney, Melbourne, and Adelaide. During this month and in July, the carrier sends its last two B-747-236Bs to Boeing Wichita for modification into freighters.
Flight 2133, a Fokker 50 with 4 crew and 49 passengers, lands too far down the runway at Tawau following a September 15 flight from Kota Kinabalu and the crew attempts to go around; as the plane is executing this maneuver, it crashes into a nearby residential area. Thirty - four people are killed aboard the aircraft, but no one on the ground is injured.
At an October 5 press conference, Managing Director Wan Malek Ibrahim, noting the success of Hadj and Umrah services and the demand for tourist flights into Malaysia, indicates that the carrier will aggressively pursue charter income.
Twice-weekly flights to Davao commence on November 1 via Kinabalu.
On November 3, code-sharing begins in cooperation with Canadian Airlines International, Ltd. aboard MAS flights from Kuala Lumpur to Vancouver via Taipei. Twice-weekly roundtrips to Macau start on November 13. At the same time, frequencies for the Sydney-Melbourne sector are increased from 8 per week to 11.
Traffic turns around: enplanements rise to 12,578,000 and cargo leaps 22.7% to 1.16 billion FTKs. Revenues increase by 17.1% to $1.89 billion and this year’s gains are up to $59 million (operating) and an impressive $104 million (net).
The workforce grows by 22.6% in 1996 to 19,616. An A300B4-203 is leased to Air Maldives, Ltd., a B-737-4Y0 is chartered to Royal Air Cambodge, and two DC-10-30s are leased to World Airways. In exchange, MAS charters two MD-11s, one MD-11F, and one MD-11CF from World Airways. The two B-747-236BFs join the MD-11s and two B-737-3H6Fs in providing dedicated all-cargo services.
Employing an MD-11F, the carrier launches thrice-weekly all-cargo services on January 1 between Amsterdam and Chicago.
A management contract is signed with Air Maldives, Ltd. in January under which MAS will provide both management and operational services. During the month, block-space operations commence with Middle East Airlines, S. A.L. (2) on flights from Kuala Lumpur to Beirut and Sydney and from Beirut to Dubai.
Weekly MD-11F all-cargo roundtrips commence on January 9 to Adelaide and Melbourne in Australia, while freight service to Seoul is doubled to twice-weekly on January 16. The next day, the company launches weekly roundtrip all-cargo services to Frankfurt. The new German freight service is doubled on February 4. Simultaneously, Kuala Lumpur to Amsterdam all-cargo frequencies are increased from four per week to five.
Poor returns force cancellation of the new Amsterdam-Chicago freight service in March, just three months after it was started. On April 1, weekly direct A330-322 return service is started from Kuala Lumpur to Pusan, South Korea. MAS is the only carrier from Southeast Asia to fly direct to the southern port city.
When implemented in June, the pact with Air Maldives, Ltd. allows shared-code flights to commence from Male to Kuala Lumpur.
Regularly scheduled service is inaugurated on July 1 from Kuala Lumpur to Vientiane, Laos.
On August 20, the company signs for the purchase of a B-777 full-flight simulator. Direct service is started on October 30 from Langkawi to Taipei.
It is announced on November 27 that the board of directors has approved company plans to take over domestic rival Pelangi Air Sdn. Bhd., in which it already holds an 18% stake via MHS.
When Mexican authorities withdraw authorization for the carrier to fly passengers from Los Angeles down to Mexico City, MAS announces on December 24 that it will cease its five-year-old air link with Mexico City as of January 1. It will continue to operate its Wednesday B-747-4H6 service from Kuala Lumpur to Los Angeles via Taipei and its thrice-weekly flights from Kuala Lumpur to Los Angles via Tokyo (NRT).
Passenger boardings dip 0.6% to 11.419,399, but 1.04 billion FTKs are operated, a 15.7% growth. Revenues reach $2.5 billion and leave an operating profit of $84.82 million and a net gain of $87.3 million.
A code-sharing agreement with Japan Air Lines Company, Ltd. (2) takes effect on January 14, 1997 allowing weekly cargo services from Tokyo (NRT) and Osaka (KIX) to Kuala Lumpur and Penang. The flights are operated by a MAS B-747-3H6F.
On January 21, MAS is able to successfully syndicate a $120-million loan from nine banks. The next day, a $283-million order is placed for Pratt & Whitney PW4056 engines with which to power its new B-747-4H6s. On January 27, a M$150-million check is provided to the Minister of Social Services on Sabah to help assist the victims of Typhoon Greg.
Sydney Organizing Committee CEO Mal Hemerling and Ansett Australia (Pty.), Ltd. Chairman Rod Eddington announce on January 28 that MAS has been chosen one of seven carriers to receive the designation of official carrier for the Sydney 2000 Olympic Games.
In February, Chairman Ramli indicates that the airline is not looking for a strategic partner and that his own group would like to increase its stake to 51% by the millennium.
While landing at Sandakan Airport in the eastern state of Sabah on February 15 after a service from Kota Kinabalu, Flight 2050, a B-737-4H6 with 6 crew and 156 passengers, overshoots the rain-soaked runway, its front tires touching the grass beyond. There is no serious damage to the little Boeing and no injuries are reported to anyone aboard.
Also during the month, Deputy Prime Minister Anwar Ibrahim announces that the government is investigating the carrier’s service amidst reports that quality has deteriorated for lack of pilots and cabin crew.
Severe storms near Taipei Airport cause unavoidable flight diversions beginning with the February 21 service from Kuala Lumpur to Los Angeles via Taipei that is routed via Manila instead. On February 28, a flight in from Los Angeles must go to Okinawa, where, for lack of hotel rooms, the crew and all 295 economy class passengers must remain on board overnight.
The airline and its 1,000 pilots agree to a new contract on March 11.
In March, MAS faces additional criticism related to its service and new competition from the start-up airline Air Asia Sdn. Bhd. During the month, Chairman Ramli signs a memorandum of understanding with Boeing for the acquisition of up to 15 of the manufacturer’s proposed B-777-200Xs.
Having departed Seattle on March 31, the company’s first B-777-2H6 IGW (IGW stands for “increased gross weight”) completes a record 10,823-nm. nonstop delivery flight to Kuala Lumpur in 15 hrs. 55 min., arriving on the morning of April 2. After ceremonies marking its arrival and the company’s fiftieth birthday, the plane, dubbed a “Super Ranger,” returns to Washington State.
Twice-weekly A330-322 roundtrips commence on April 1 from Kuala Lumpur to Shanghai. On April 27, the B-777-2H6 IGW (wearing a fiftieth anniversary emblem) arrives at Kuala Lumpur on April 27 following a 16-hr. nonstop flight from Seattle. It is again welcomed in impressive ceremonies and is then readied for revenue flights.
The new B-777-2H6 IGW enters service on May 1 over routes from Singapore to Bangkok and Hong Kong. Also in May, a block space arrangement is implemented with Iberia Spanish Airlines (2) (Lineas Aereas de Espana, S. A.) on frequencies from Kuala Lumpur to Madrid and onward from Madrid to Dubai. A second B-777-2H6 IGW begins flying to Paris, Munich, Perth, and Tokyo on June 1.
A dinner dance is held at the Kristal Ballroom 1 of the Petaling Jaya Hilton Hotel on June 1 to celebrate the airline’s fiftieth anniversary. At the dinner, Chairman Ramli introduces the new MAS pilot uniforms. The company celebrates its fiftieth birthday on June 9.
The company launches an electronic ticketing system on June 10, marking the beginning of a ticketless air travel era.
As the result of a March 31 agreement, the airline flies in June as the official airline of the 9th FIFA/Coca-Cola World Youth Championship scheduled for Kuala Lumpur.
As a result of the chaos following Hun Sen’s coup in Cambodia and the fighting at and near Phnom Penh’s Pochentong Airport, the company stops flying into the beleaguered capital from Kuala Lumpur on July 6.
It is announced by the Federation Aeronautique Internationale on August 5 that the company’s second B-777-2H6 has completed a 12,455.34-mi. around-the-world service from Seattle to Kuala Lumpur and back in a record 553 mph.
The company’s last B-747-312C freighter is withdrawn in August. Haze caused by the great fires in Indonesia force the company to cancel 882 domestic flights, beginning on August 20. On August 29, a block-seat code-sharing agreement is signed with Swissair, A. G.
Fires in Indonesia, together with haze and smog, begin to force large schedule adjustments on September 14.
By the end of September, the B-777-2H6 IGWs have initiated new wide-body services to Vienna, Zurich, Amsterdam, and Frankfurt.
On a less positive note, the continuing Southeast Asian haze problem requires that 890 domestic and 34 international flights be cancelled through September 30. In addition, another 882 flights to interior areas of Malaysia are also called off. Although 319 make-up flights are offered, the adverse schedule adjustments cost the airline M$6.5 million (US$1.9 million) in lost revenues.
On October 1, twice-weekly, dual-designator, all-cargo service is inaugurated in cooperation with Virgin Atlantic Airways, Ltd. over a route from Kuala Lumpur to London (LHR) via Osaka, Japan, on Wednesdays and via Melbourne, Australia, on Saturdays. The new freight operation employs the MD-11F that MAS has leased from World Airways.
Foul weather and the Indonesian fire situation continue to cause difficulties into October. On October 5, the airline must cancel all flights to the northern state of Penang following heavy rain that impairs visibility.
The next day, all of the services to the northeast resort island of Langkawi are lost to a thick haze caused by the fires. Simultaneously, heavy fog coupled with haze at Kuala Lumpur Airport forces Malaysia to divert four international flights to Penang (now reopened) and Singapore. Since mid-September, Malaysia has sent over 1,000 firefighters to help conquer the blazes in Indonesia’s Sumatra and Kalimatan provinces.
Additional bad news is received on October 8 when Transport Minister Ling Liong Sik announces that the flag carrier has lost out in a tender bid to the Pilgrims Management and Fund Board to ferry Malaysians to Mecca for the annual Hadj pilgrimage. The winners are a consortium headed by Saudi Arabian Airlines.
The new Matsushita interactive entertainment centers aboard the company’s B-777-2H6s are able to send faxes beginning in October. In addition, the number of weekly dual-designator flights with new codesharing partner Lauda Air, A. G. from Vienna to Kuala Lumpur is doubled from three to six on October 26. Service to Cairo is also begun.
These achievements are overshadowed by the devaluation of the Malaysian dollar, which increases the airline’s debt difficulties.
The dual-designator service with Swissair, A. G. begins on October 30 on thrice-weekly B-777-2H6 IGW one-stops from Kuala Lumpur to Zagreb via Vienna. In the afternoon of the welcoming ceremony, Malaysia and Croatia Airlines sing a code-sharing agreement for the Zagreb-Vienna sector.
In November, two former MAS DC-10-30s are ordered for use by Transmile Air Service, Sdn. Bhd. on Hadj service the following spring. Once the holy duty is completed, the two will be converted into freighters.
Traffic figures are not immediately released. It is noted, however, that operating revenues are up 6.6% for the year to $1.68 billion. Costs, on the other hand, are $1.74 billion, and cause losses of $60.18 million (operating) and $67.61 million (net).
The fleet at the beginning of 1998 includes 87 airplanes, all of which are Stage III certified: 49 B-737s, 17 B-747s, 4 B-777-246s, 1 A300B4-203, 12 A330-322s, and 2 each DC-10-30s and MD-11s.
It is reported on January 4 that the two DC-10-30s will be sold to a Canadian carrier later in the month. Another DC-10-30, on an aircraft, crew, management, and insurance (ACMI) contract with World Airways, is returned.
Also in January, a memorandum of understanding is signed with KLM (Royal Dutch Airlines, N. V.) under which the two companies will explore all avenues of commercial cooperation, including frequent flyer programs, joint ground handling, marketing and sales. Dualdesignator services will be undertaken between Kuala Lumpur and Amsterdam.
A third B-777-2H6 IGW is delivered at the beginning of April. Later in the month, thrice-weekly roundtrips are inaugurated from Kuala Lumpur to Newark via Dubai. In addition, a special offer to attract tourists is announced. Under its terms, international passengers will be offered four nights’ free accommodation at Kuala Lumpur, Langkawi, or Penang.
En route from Kuala Lumpur to Los Angeles via Tokyo on May 25, a B-747-4H6 with 20 crew and 281 passengers hits a short, sharp pocket of air turbulence over the Philippines. Seven passengers are injured and are treated at Tokyo (NRT); five continue on to California while two Japanese passengers remain behind.
On June 19, following upon the earlier memorandum of understanding, the carrier signs a commercial agreement with KLM (Royal Dutch Airlines, N. V.), which will enable to introduce code-sharing on their seven (later eight) weekly nonstop services between Amsterdam and Kuala Lumpur. The pact is timed to coincide with the opening of the new KLIA Airport at Sepang, near Kuala Lumpur. Malaysia will handle KLM flights in Kuala Lumpur and KLM will service Malaysia flights in Amsterdam.
In a quite obvious effort to draw traffic away from Singapore’s dominant—and physically closer-hub at Subang, the government, on
June 29, opens the brand new Kuala Lumpur International Airport at Sepang. MAS transfers its operations to the new $2.8-billion facility, which opens amidst a variety of problems.
Dual-designator services with KLM (Royal Dutch Airlines, N. V.) commence on July 1. Employing B-747-4H6, Malaysia (with KLM’s “KL” code utilized) begins thrice-weekly roundtrips from Kuala Lumpur to Amsterdam, while placing its “MH” designator on the four weekly nonstops KLM already operates between the two nations. Plans are announced for an upgrade of the service at the end of the year; Malaysia will switch to B-777-2H6 IGWs and increase frequencies to four per week.
Two more B-777-2H6 IGWs arrive, one each in June and July. As the new aircraft are delivered, the company’s 12 A330-322s are shifted to regional routes to Singapore, Penang, Jakarta, Manila, and Langkawi.
The dual-designator agreement with Swissair, A. G. is intensified on July 17 as Swissair places its code on Malaysia’s thrice-weekly B-777-2H6 IGW roundtrips from Kuala Lumpur to Zurich.
In need of additional capacity, TunisAir, S. A. leases a DC-10-30 from MAS on August 9.
Beginning in September, the B-747-4H6s are gradually withdrawn for service for 90-day upgrades with new interiors. Also during the month, the XVI Commonwealth Games are held in Malaysia and MAS, as official airline, receives worldwide attention.
By fall, the company and the government are embarrassed to learn that MAS customers do not want to make the hour-long ground commute from Kuala Lumpur to Sepang and prefer to fly from the old Sultan Abdul Aziz Shah Airport at Subang. Traffic is lost to a variety of independents, including Pelangi Airlines, which have not moved.
Faced with a continuing downturn in domestic boardings, MAS, on October 25, begins to operate 17 daily B-737 return services from Subang, including twice-daily nonstops to Kota Kinabalu, Langkawi, and Penang. Only Ipoh continues to be served exclusively from Sepang. The major does not transfer all of its domestic service back to Subang for political reasons and also because it must continue to provide connections for international flights. Hoping to save money and gain face, the government, by forcing its national airline to incur the costs of operating from two large airports, has lost both face and money.
During the last full week of November, a $250-million loan is secured from foreign sources to finance the purchase of two aircraft. Still, due to a weak Malaysian currency and a corresponding decline in traffic demand, particularly in domestic and regional markets, MAS, on November 30, posts a huge fiscal downturn for the six months ending on September 30. The net loss shown totals M$441 million ($116 million), compared to a profit of M$23.50 million in the same period a year earlier.
The continuing drop in the valuation of the Malaysian dollar (down 40%) against the U. S. dollar worsens the situation. By the end of the year, company executives are able to win government support for a massive cost-cutting effort. Under plans announced late in the fourth quarter, the carrier will close down its unprofitable routes and dismiss 27% of its workforce. The abandoned routes will be offered to Air Asia Sdn. Bhd.
Passenger boardings plunge 12.1% to 12.52 million, while cargo traffic is off 2.4% to 1.26 billion FTKs. The net loss grows to $184 million.
During the first week of January 1999, a major restructuring plan is presented to the airline’s board of directors. In addition to refinement of the cost-cutting items noted above, a new organization, Asset Management Group, is to be created. It will take over ownership of the airline’s aircraft and lease them back, thereby reducing ownership expenses.
The plan also calls for MAS to be administratively reassembled into four business units. Physical Airline will oversee airline operations while Virtual Airline will take care of sales and cargo. Derivative Business is another term for heavy maintenance activities, while Shared Services will handle financing and assets, catering, and personnel.
A rat is spotted in the first-class section of a B-777-2H6 IGW, with 15 crew and 251 passengers, a half hour after takeoff on January 8 from
Kuala Lumpur for Perth. Considerable commotion causes the captain to abort the service and return to his point of departure, where crew, passengers, and baggage are transferred to another aircraft that departs later in the day. The eradicated first-class rat is one of hundreds infesting the new Kuala Lumpur International Airport Sepang.
On January 11, an agreement is reached with the company’s aviation fuel suppliers at Kuala Lumpur on a way to cut costs; MAS will pay in Malaysian instead of U. S. dollars.
The next day, service to Vancouver ends; the carrier adds additional flights from Kuala Lumpur to Los Angeles.
Philippine Airlines begins to code-share on February 1 on Malaysia’s 11-times-a-week return services from Manila and Cebu to Kuala Lumpur, Kota Kinabalu, and Kuching.
Long-time Managing Director Ibrahim resigns on February 19 to take early retirement. The move fuels all sorts of rumors over the weekend concerning top-level management reorganization at the airline. Chairman Ramli, through a spokesperson, attempts to quash these stories on February 22, indicating that no such reshuffle is in prospect, even though MAS is undergoing what is termed a “transformation exercise” designed to improve company performance. Analysts agree that the airline does not need organizational change, but does need to find a way to handle its debts of M$11.8 billion ($3.1 billion).
As a cost-cutting measure, the company, on March 1, recalls its area managers from Brisbane and Adelaide, Australia.
Just after landing at Kota Kinabalu after a March 3 service from Kuala Lumpur, Flight 2920, a B-737-4H6 skids off the runway. No injuries are reported.
Previously operating two direct flights into South Australia, MAS, on April 26, increases the number of its weekly Adelaide flights to four.
The airline suffers a public relations setback during the first two weeks of May when it is alleged that its Jumbojets are arriving at London with dangerously low levels of fuel in their tanks. The matter is first made public by Keith Harper in the May 6 Internet issue of the Manchester Guardian. Harper indicates that the government transport department has confirmed that a Far East-operated B-747 made its descent across central London the previous evening with only four tons of fuel. The flight path of the incoming aircraft, following its 14-hr. flight, had taken it over Clacton in Essex and then right over the center of London via Carnary Wharf, Westminster, Kensington, and Chiswick.
MAS is identified as the offending party by the London Sunday Times on May 9 and by David Learmount in the May 10 issue of Flight International. Basing his report on a variety of contacts, including the CAA’s Confidential Human Factors Incident Reporting Programme (CHIRP), the magazine’s operations and safety editor reveals that the carrier has been involved in 10 similar incidents at London (LHR) in recent months. British aviation rules require a minimum of 4.5 tons in aircraft landing at Heathrow, while national carrier British Airways, Ltd. (2) requires nine tons.
Ahmad Fuad Dahlan, the airline’s vice president for Europe, the U. K., and Ireland, informs the press on May 11 that MAS did not fly over central London with near empty fuel tanks as charged in the newspaper and magazine articles. He confirms that the British government, at the direction of Transport Minister Glenda Jackson, has launched an investigation, but claims that the Transport Department is satisfied with his explanations.
At Kuala Lumpur, Malaysian Transport Minister Ling Liong Sik receives a similar report from the national airline, one that indicates that the aircraft in question is not from Malaysia Airlines. The report is passed on to the national parliament. Still, senior airline officials depart for London to explain the company’s fuel policies to British authorities. Opposition political leaders urge the carrier to sue the reporting British media if the claims prove baseless.
Transport Minister Jackson meets with MAS representatives on May 12, giving them evidence that their aircraft have, indeed, landed in Britain with low fuel levels. The Far East operator is required to henceforth undergo spot checks on the fuel levels of all of its aircraft landing in the U. K. Indeed, the CAA is instructed to increase inspections of all arriving long-haul aircraft. MAS officials, confronted with proof, pledge full cooperation.
The Financial Times reveals on May 13 that British Airways, Ltd. (2), Malaysia’s Heathrow handling agent, has reported the low-fuel situation on six occasions since January 1997. The problem has finally become public because a BA employee has contacted CHIRP concerning the questionable arrival, reporting that there is so little fuel left in the tank that his fellow engineers have been unable to conduct post-landing maintenance checks.
In discussing the fuel controversy on May 26, Transport Minister Ling Liong Sik admits to the local press that “there were certain circumstances where the fuel might have been low,” but at no time was the safety of aircraft or passengers compromised.
The matter is finally cleared up during the last week of the month when the U. K. Dept. of Environment, Transportation, and the Region and CAA agree that the MAS fuel policy meets international standards. The CAA and MAS will continue to seek reasons why some of the carrier’s Jumbojets apparently render misleading “fuel remaining” readings after landing at London (LHR).
A commercial agreement is signed with Northwest Airlines on September 23. Under its terms, the two majors will soon begin codesharing transpacific flights. At the end of October, service between Kuala Lumpur and Medan is doubled to twice daily. Flights are also resumed between Zamboanga City and Sandakan in Sabah.
Twice-weekly B-737-4H6 service from Kuala Lumpur to Xiamen, China, is initiated on November 1. Delivery of a Next Generation B-737-7H6 BBJ is accepted next day; the aircraft is christened Mostar.
Customer bookings increase 25.1% to 15,659,000, even as freight falls 7.1% to 1.17 billion FTKs. Revenues jump 10% to $1.6 billion. The previous year’s net loss is turned into a $16-million net gain.
Airline employment at the beginning of 2000 stands at 22,800, a 2.2% decline over the previous 12 months. Among the world’s top 25 airlines, MAS is 22nd in passengers and 20th in employee number.
A code-sharing agreement is signed with Garuda Indonesia on February 11. Under its terms, the two share their designators on the return flights operated by both from Kuala Lumpur to Jakarta and Medan and the services provided by MAS from Kuala Lumpur to Surabaya and Denpasar and from Pulau Pinang to Medan.
New thrice-weekly B-777-2H6IGW nonstop roundtrips from Kuala Lumpur to Manchester, England, are initiated on March 26, along with twice-weekly B-777-2H6IGW return frequencies from Kuala Lumpur to Munich. Simultaneously, the five-times-a-week B-777-2H6IGW return service from Kuala Lumpur to Auckland becomes daily.
Complaining that the airport at Sandakan in Sabah is charging exorbitant landing fees, the company, at the beginning of the second quarter, suspends its flights into the town from Zamboanga City.
Malaysia joins in a dual-designator pact with Middle East Airlines, S. A.L. (2) on June 13. The “Triple-Seven” employed on the Manchester route is replaced with a B-747-4H6 on June 14. The code-sharing agreement with Middle East Airlines, S. A.L. (2) begins on June 16, with MAS placing its designator on MEA services from Beirut to Sydney via Kuala Lumpur, while MEA puts its code on MAS flights from Kuala Lumpur to Beirut. Two days later, on June 18, frequency on the Kuala Lumpur to Frankfurt service is boosted from four to five times a week.
In mid-June, a 10,000-sq.-ft. “Golden Lounge” is opened at London (LHR) Terminal 3. A request for a 50% increase in domestic ticket prices is filed with the government on June 29.
On July 1, the company begins to code-share with Philippine Airlines on flights between Manila and Kuala Lumpur and from Manila to Kota Kinabalu and Cebu.
MAS is named 19th best-managed company among non-state-owned major-sized airlines in the “2000 Index of Competitiveness” published by Aviation Week and Space Technology on July 10.
Plans are announced on July 18 for the initiation of new services between Kuala Lumpur and Okayama, Japan, next April. Also during the month, MAS Chairman Tan Sri Tajudin Ramili informs the media that his airline will not, as a news release from its Naluri Bhd. parent had indicated, be selling a 29% tranche of its shares to cover debt. Still, the Ministry of Finance allows MAS to raise its foreign ownership ceiling from 30% to 45%. Speculation is immediately renewed that the carrier is in discussions with another airline(s) concerning sale of a substantial equity stake.
An extensive dual-designator pact is inked with Cathay Pacific Airways (Pty.), Ltd. on August 7. In cooperation with the Swissair, A. G. cargo division Swisscargo, MASkargo inaugurates twice-weekly B-747-200F return freight flights between Kuala Lumpur and Basel/Mulhouse on August 30.
The code-sharing agreement with Cathay Pacific Airways (Pty.), Ltd. begins on September 2. Under its terms, the two share frequent flyer programs, airport lounges, and some handling services. Additionally, MAS places its code on Cathay’s 17 weekly return services from Hong Kong to Kuala Lumpur, including seven which continue to Penang. Cathay’s designator is placed on nine weekly MAS roundtrips between Kuala Lumpur and Hong Kong, including two with a Penang stopover.
Also in September, Malaysian Transport Minister Ling Liong Sik confirms that MAS is, indeed, negotiating the sale of an equity interest to Qantas Airways (Pty.), Ltd. Such an arrangement would also allow for an MAS entry into the “OneWorld” airline alliance. It had been reported earlier that SAirGroup, parent of Swissair, A. G., has also been engaged in equity talks with the southeast Asian airline.
On October 28, the MASkargo subsidiary relocates its Mideast business from Dubai to Sharjah, from which nine weekly B-747-200F roundtrips to Kuala Lumpur will be offered. Additionally, regional hubs are established at Melbourne and at Hahn, Germany.
The code-sharing agreement with KLM (Royal Dutch Airlines, N. V.) is expanded on October 29. Under the arrangement, KLM adds three more flights between Amsterdam and Kuala Lumpur to match Malaysia’s already provided daily services. The Dutch code is added to 55 additional Malaysia flights between Kuala Lumpur and 7 destinations in Australia and New Zealand, while the Malaysian designator is added to 75 weekly KLM-operated roundtrips between Amsterdam and 7 cities in Scandinavia.
On November 3, Malaysian Transport Minister Datuk Seri Dr Ling Liong Sik, while refusing to name names, indicates that a foreigner will be appointed to the position of CEO while a new chairman has also been identified.
MAS and Northwest Airlines are granted antitrust immunity by the DOT on November 22; their new code-sharing agreement will be implemented in January on routes from Kuala Lumpur to Los Angeles, Tokyo (NRT), and Nagoya.
On December 12, Qantas Airways (Pty), Ltd. Deputy CEO Geoffrey Dixon reveals that his carrier is suspending its long-running negotiations to acquire a stake in MAS until the government of Malaysia indicates just exactly what equity percentage of the carrier is available. That word will not be forthcoming this year.
After months of negotiation, on December 20, the government’s Ministry of Finance, Inc. agrees to purchase the 20.09% stake in MAS held by its chairman, Tajuddin Ramli, via his Naluri Bhd. aviation firm. Critics charge that the RM1.79 billion ($471.6 million) paid is excessive and note that the RM8-per-share price is more than double the airline’s share price on the Kuala Lumpur Stock Exchange at the close of the day’s business.
A decision by Finance Minister Daim Zainuddin on a new chairman is delayed, leaving its present incumbent in a caretaker’s position as the year ends. On February 15, it will be announced that Petronas oil company executive Azizan Zainul Abidin will become nonexecutive board chairman, with finance ministry official Mohamad Nor Mohamad Yusof as managing director.
World History
