| Breaking news, 30 Jun 2008 |
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KUALA LUMPUR – “With oil prices soaring to unprecedented levels and remaining there, the prognosis for the industry is really bleak,” Malaysia Airlines (MAS) managing director/CEO Dato’ Sri Idris Jala said in an open letter released last Friday.
“Change – and I mean drastic change – is absolutely vital for our survival,” he said. “That, and a willingness to reinvent the way we operate, including through mergers and acquisitions.”
Idris said airlines could no longer continue to subsidise passengers. “The general public must be prepared to face sharply higher prices for air travel now, or be prepared to stomach even higher prices later when the number of participants become fewer and competition fizzles out in favour of consolidation. If these adjustments don’t take place – and quickly – the airline industry will collapse and have a ripple effect throughout the entire world economy.”
Idris said MAS would have no choice but to raise fuel surcharge and fares but would also concentrate on cutting costs without sacrificing safety and customer experience. Such initiatives will also include cutting capacity.
“Despite all of this, cost cuts and innovation can only do so much. One thing remains crystal clear: the world must adjust to higher oil prices, and that means higher price of air travel too,” Idirs concluded.
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