Credit given to MAS for working within their means

From The Edge Malaysia:

KUALA LUMPUR: MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) recorded RM2 billion in savings in the past three years and is targeting to reduce costs by another RM700 million this year.

MAS managing director and chief executive officer Tengku Datuk Azmil Zahruddin said on Oct 2 the national carrier would continue to pursue structure cost reduction.

"There is a lot more room for cost savings," he said at a briefing in Kelang Jaya as he update the media on the progress of MAS's business transformation plan.

Azmil explained that a 62-year-old legacy carrier inherited a lot but the aggressive cost savings measures was to get rid of "bad costs such as those that don't add value or give poor returns".

"A significant portion of our savings is returned to customers in the form of lower fares and better services," he explained. "We will continue to invest in good costs," he added, such as inflight food, safety and regulatory requirements and to generate third party revenue.

He said MASkargo aims to return to profitability next year while MAS Aerospace Engineering aimed to achieve revenue targets of RM1 billion by 2010 and RM3 billion by 2013.

On its fleet renewal, he said it would take delivery of 35 firm B737-800 planes with delivery starting in the fourth quarter of 2010. It has another 20 plans on option.

"These planes will be deployed in Malaysia, Asean, South Asia and China," he said.

To MAS' credit, they've not been grabbing shareholder's money like AirAsia recently. Their cost cutting method seems effective and looks to be continuing under the new ceo, Zahruddin. He seems to be picking up exactly where Idris Jala left off. No doubt as a full service carrier, MAS is hurting compared to AirAsia as consumers trade down; but credit is given to MAS for working within their means.