Closing in on its seventy-fifth birthday, Malaysia Airlines is one of Asia’s most high-profile airlines. Nowadays, Kuala Lumpur-based Malaysia Airlines’ 99 aircraft flies 116 routes to 76 destinations in 22 countries. In addition to a comprehensive domestic and regional network, Malaysia Airlines has a presence throughout Asia, Oceania, the Middle East, and Europe.
The airline can trace its history through several name changes and ownership changes to 1947, when Malayan Airways Limited operated its first passenger flight. At the time, modern-day Malaysia did not exist. More recently, it hasn’t been the easiest ride for Malaysia Airlines. The contemporary state-owned airline has struggled to make a profit with the recent travel downturn has also highlighting the airline’s financial stresses.
A post-WWII airline that grew fast
That early postwar airline, Malayan Airways, operated out of Singapore. The airline, a collaboration between Straits Steamship Company and Imperial Airways, operated Airspeed Consul twin-engined aircraft. The first passenger flight was on April 2, 1947. Five passengers flew between Singapore’s Kallang Airport and Kuala Lumpur’s Sungai Besi Airport.
With the input of airlines from friendly countries, Malayan Airways grew rapidly. By 1955, the airline was flying Douglas DC-3s. Within 20 years of that first flight, Malayan Airlines was flying a wide variety of planes, including the Douglas DC-4 Skymaster, Vickers Viscount, Lockheed L-1049 Super Constellation, Bristol Britannia, de Havilland Comet 4, and Fokker F27.
In 1960, Malayan Airlines commenced its first long-haul flight to Hong Kong, using an 84-seat Bristol Britannia. Three years later, in 1963, modern-day Malaysia was born, and Malayan Airways rebranded to Malaysian Airways – just a tweak but one that better reflected the airline’s home base. In the same year, five ultra-modern Fokker F27 Friendships landed at Malaysian Airways.
Malaysian Airlines System (MAS) breaks away from Singapore
In 1966, Singapore broke away from Malaysia to form the contemporary stand-alone city-state, and Malaysian Airways renamed to Malaysia-Singapore Airlines (MAS). Within a short time frame, Boeing 707s and 737s began arriving at the airline. But 20 years after formation, the airline was beginning to experience some growing pains.
Core to the problem were the differing interests of the two owners – the Governments of Singapore and Malaysia. As a city-state, Singapore had an outward focus and wanted to build up the airline’s international network. Malaysia wanted to focus on domestic routes at home.
That strategic conflict led to the break up of the airline in 1972. The two new airlines were named Singapore Airlines and Malaysian Airline System, informally known as MAS. Singapore Airlines took the Boeing 707s and 737s and began flights out of Singapore. MAS took the Fokkers and started concentrating on domestic routes and some international services from Kuala Lumpur.
After the breakup, MAS was operating 19 aircraft, including jets capable of operating flights through to London. With the advent of DC-10-30 aircraft in 1976, MAS flights to Amsterdam, Paris, and Frankfurt began.
Under Malaysian Government ownership, MAS really began spreading its wings. Like the present day, emerging nation-states put a lot of value on their national carriers having both an extensive network and a high profile. Malaysia was no exception.
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Asian Financial Crisis deals MAS a body blow
By the 1980s, MAS was flying to 47 overseas destinations. In addition to an extensive network throughout Asia, MAS flew to eight airports in Europe, seven airports across Oceania, as well as Los Angeles and Honolulu. MAS has always concentrated on Europe and Ocean at the expense of the Americas, where it struggled to make flights profitable. But that didn’t stop MAS from having a go. Over the years, they’ve tried flights as far afield as Mexico City and Buenos Aires.
Nonetheless, throughout the 1980s and 1990s, MAS grew into a significant long-haul airline. However, the airline was dealt a serious blow with the 1997 Asian Financial Crisis. A series of financial losses caused MAS to undertake what nowadays would be called a “transformation program.”
Aside from one noteworthy annual profit in the early 2000s, the period of financial turbulence lasted well over a decade. Loss-making long-haul routes got the ax, but that couldn’t offset rising salary, airport, and aircraft costs. Fuel costs and poor revenue management would prove particularly problematic.
Towards the end of this century’s first decade, a business turnaround plan executed by a new CEO got the airline back into the black. CEO Idris Jala made some big changes at MAS. He rationalized routes, including ending all unprofitable international flights. MAS changed from a predominantly point-to-point airline to a hub-and-spoke airline.
Idris Jala also got serious about revenue management. He was so successful the Malaysian Government wanted him in the national cabinet. His successor, Tengku Azmil Zahruddin, took over in 2009. Around this time, a raft of new aircraft orders went in, including for Boeing 737s, Airbus A330s, and Airbus A380s.
A troubled last decade at Malaysia Airlines
The last decade has been a turbulent one for MAS. The airline rebranded once again, this time to Malaysia Airlines. But the legacy airline struggled to compete against the rise of nimble low-cost airlines. This was perhaps best illustrated by the arrival of the expensive A380s in 2012. The big jumbos rapidly became an albatross for Malaysia Airlines.
Two high-profile incidents also kept Malaysia Airlines in the public eye for all the wrong reasons. Flight 370, a Boeing 777-200ER, and its 239 people onboard mysteriously vanished in 2014. Searches have never found that plane. In the same year, another 777-200ER was hit by a missile over eastern Ukraine, killing all 298 onboard.
High turnover of executives, plans to delist the airline, rebranding, and cultural issues at Malaysia Airlines combined with financial issues to create a perfect storm of problems. The recent travel downturn was the icing on the cake, but the ongoing problems at Malaysia Airlines predate that.
It would be enough to end most airlines, but Malaysia Airlines survives. Owned by a Malaysian sovereign wealth fund, the airline may be a shadow of its former self and still in trouble, but Malaysia Airlines is hanging in there. The airline is still flying and waiting for better days. In 2021, Malaysia Airlines remains a highly recognized carrier with an excellent inflight product.
Malaysia Airlines will be back better than ever as people start flying again, rebuilding and planning to capture a slice of the glory days before the Asian Financial Crisis.
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