JAKARTA/SINGAPORE: An air of confidence and optimism exuded from Irfan Setiaputra as he took centre stage in Indonesia’s parliament earlier in June this year.
Across the strait, Malaysia Airlines also turned profitable last year after back-to-back losses, in a turnaround that tripled its revenue due to strong demand internationally.of US$1.6 billion for the 2022-2023 financial year ending in March, the largest in its 76 years of operating.for employees, bumpier skies may lie ahead for both Garuda and MAB.
Domestically, MAB’s two main competitors in pre-COVID-19 days were AirAsia Group and Malindo Air - recently rebranded as Batik Air Malaysia - according to independent analyst Brendan Sobie. When the pandemic hit in 2020, MAB began to restructure its RM16 billion debt, a process which involved renegotiating with leasing companies, creditors and state entities that was completed in early March the next year.
“During the pandemic we took a difficult stand to not ground any aircraft nor let go of any of our staff,” MAG managing director Captain Izham Ismail told CNA. Under Askhara, the airline was also convicted and fined over allegations of price fixing and fraud related to financial statements. The airline also kicked off a debt restructuring exercise in 2021 and was able to convert some liabilities into shares and bonds.
MAG, on the other hand, admitted earlier this year that despite its positive finances, “many areas for improvement” remain in customer experience and on-time performance.Retraining staff, supply chain issues: Aviation industry faces challenges in rebuilding post-pandemic, says IATA chief MAG’s Izham, who is also MAB chief, said the airline has prioritised improving 10 key aspects of its customer experience ranging from check-in processes to in-flight food and beverage services.
For one, costs are expected to return in the form of higher aircraft lease payments after MAB deferred some of these payments as part of its restructuring, said Sobie. “You have overall issues like inflation, and a strong US dollar which is putting pressure on cost increases.” But Izham and his Garuda counterpart Setiaputra said they were unfazed by competition from low-cost carriers, with both adding that their focus was on capturing the premium market.Every airline is positioned differently in the market, and Garuda and MAB should recognise that they are not competing with SIA, according to the aviation consultant.
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