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Overview of Malaysia Aviation Industry

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An overview of Malaysia aviation industry The aviation industry is a large and growing industry. In the past few years, the air travelling has been improving and growing by 6 % for a year. They listed airlines more than 1 billion passenger or traveller in 2008. The aviation industry needs or involves the large capital requirement for the aircraft, close keep an eye on for the rules and regulations of the government, competition from other tourist transport and for the high level of expertise to operate and manage.

In the Malaysian aviation industry, the airlines divided or separated in to two: 1).

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Passenger Airlines 2). Cargo Airlines The passenger airlines are Air Asia, Malaysia Airline System Berhad (MAS), Firefly, and Loyang – Loyang Aerospace, Berjaya Air, Sabah Air and hornbill skyways. There are also three Cargo Airlines that operate in Malaysia which are the Athena Air Services, MAS Cargo and Tran smile Air Services. In Aviation Industry in Malaysia is monopolized by two companies which are, 1). Malaysia Airlines System Berhad (MAS) The Malaysia System Berhad (MAS) is operated full service national carrier that introduced in 1947 by the name of Malayan Airways Limited.

This was the domestic airlines and then improved services and it turned into international airlines and MAS was incorporated in 1973. Now a day, MAS flew about 50,000 passengers daily and 100 destinations worldwide. It has 90 aircrafts for domestic and international flight and also 20 airbuses and 70 Boeing. MAS’ main base is at Kuala Lumpur International Airport (KLIM). 2). Air Asia In aviation Industry in Malaysia, the other service operator is Air Asia. It takes low cost budget. Air Asia has been introduced and expanding rapidly in 2001.

It covers 61 destinations and flies 400 flights daily and it has 75 Aircrafts. Now a day, it has fly over 55 million passengers across region. In second quarter of 2009, Air Asia capacity growth of 22 % due to increase the number of route flight frequencies and passenger growth 24 % due to its low cost structure making. Air Asia is being number 1 in choice opposed to MAS. Mission of Malaysia Aviation industry * To champion the meaning of fly code (Malaysian Hospitality, MH) and that provide air travel and also provide transport service that rank among the best in terms of safety, comfort and punctuality. To generate sustainable value for its stakeholders and offer the highest quality of care and services to its customers. * To constantly explore modern ways of doing business and stay consequence to its core and inspiring motto; “Go Beyond Expectation”. * To provide a growth-oriented workplace that recognizes the interests, rights and ideas of its employees as well providing a corporate environment that encourages high honesty and ethical standards; and ensures compliance with all regulations and laws. Objectives of Malaysia Aviation industry

The primary objectives of the company were to provide the people of Malaysia with a expert and profitable air transport system which would develop the placing of the country in the world. Moreover, as the Malaysia flag carrier, Malaysia Airlines had played a very important role in contributing to the economic and social integration of the country as a whole. Malaysia Airlines will consistently commit to its planning as to maximize market penetration with a reasonable number of aircraft type and navy resources. History of Malaysia aviation industry

The Events that have made Malaysian Aircrafts flying all around the world everyday without failed and with one of the best aviation safety records in the world… Chronology of events for Aviation in Malaysia * 1898: A balloonist jumps off the top of a government building in Jalan Tuanku Abdul Rahman, Kuala Lumpur, and crashes at the edge of the Selangor Padang Club. * 1911: G. P. Fuller makes the first recorded flight in Malaya and lands his Antoinette Monoplane at the race course in Jalan Ampang, Kuala Lumpur. 1924: The first civil aircraft in Malaya, a Fokker FVII of KLM, lands on a bumpy grass strip in Alor Setar, Kedah. * 1928: Alor Setar, Kedah, becomes the hub of aviation activities in Malaya as KLM carries out fortnightly services. * 1929: Aviation comes to Kuala Lumpur with the inaugural meeting of the Malayan Aeroplane Club held in the Malay States Volunteer Reserve Mess. * 1930: Commercial aviation begins in Malaya with the services of Imperial Airways and its “flying boat” operations in Penang. * 1938: War breaks out and all civil aviation aircraft are requisitioned by the government. 1948: Kuala Lumpur Airport in Sungai Besi is expanded. * 1956: Kuala Lumpur Airport in Sungai Besi is upgraded to international airport status with the first flight to Europe taking off there. * 1965: Kuala Lumpur International Airport in Subang is officially opened by the Yang di-Pertuan Agong Tuanku Syed Putra ibni al-Mar hum Syed Hassan Jamalullail. * 1972: Malaysian Airlines System takes to the skies. * 1992: Malaysia Airports Berhad is formed. * 1998: Kuala Lumpur International Airport in Sepang is officially opened by Yang di-Pertuan Agong Tuanku Ja’afar ibni al-Mar hum Tuanku Abdul Rahman. 2001: Air Asia is bought by Tune Air Sdn Berhad for RM1. * 2006: The LCCT-KLIA terminal opens to cater to low-cost carriers. * 2007: Air Asia X, which provides high-frequency long-haul flights, begins operations. The role of aviation industry in the economy of Malaysia The aviation industry measured by the contributions of GDP, jobs and tax revenues generated by the sector and its supply chain. But the economic value created by the industry is more than that. In addition, the connections created between cities and markets represent an important ransportation asset that generates benefits through enabling foreign direct investment, business clusters, speciality and other spread out impacts on an economy’s productive capacity. Contribution to Malaysian GDP The aviation sector contributes MYR 7. 3 billion (1. 1%) to Malaysian GDP. This total comprises: * MYR 3. 2 billion directly contributed through the output of the aviation sector. * MYR 2. 6 billion indirectly contributed through the aviation sector’s supply chain; and * MYR 1. 6 billion contributed through the spending by the employees of the aviation sector and its supply chain. In addition there is MYR 17. 2 billion in ‘catalytic’ benefits through tourism, which raise the overall contribution to MYR 24. 5 billion or 3. 6% of GDP. Major employer the aviation sector supports 102,000 jobs in Malaysia. * 35,000 jobs directly supported by the aviation sector; * 42,000 jobs indirectly supported through the aviation sector’s supply chain; and * 25,000 jobs supported through the spending by the employees of the aviation sector and its supply chain. * In addition there are a further 243,000 people employed through the catalytic (tourism) effects of aviation

Long-term economic growth In 2010, Malaysia covers 111 routes around the world. And 26 routes were connecting Malaysia to other cities of more than 10 million residents, with 2 outbound flights per day available to passengers. Frequencies are higher to the most economically important destinations. Many of these city-pair connections are only possible because of the traffic density provided by hub airports. Malaysia’s integration into the global air transport network transforms the possibilities for the Malaysian economy by: * Opening up foreign markets to Malaysian exports; Lowering transport costs, particularly over long distances, helping to increase competition * increasing the give of labour supply, which should enhance allocate efficiency and bring down the natural rate of unemployment; * Encouraging Malaysian businesses to invest and specialise in areas that play to the economy’s strengths; * speeding the adoption of new business practices, such as just-in-time-inventory management that relies on quick and reliable delivery of essential supplies; * Raising productivity and hence the economy’s long-run supply capacity.

It is estimated that a 10% improvement in connectivity relative to GDP would see an MYR 434 million per annum increase in long-run GDP for the Malaysian economy. Improvements in connectivity Improvements in connectivity contribute to the economic performance of the wider economy through enhancing its overall level of productivity.

This improvement in productivity in firms outside the aviation sector comes through two main channels: through the effects on domestic firms of increased access to foreign markets, and increased foreign competition in the home market, and through the free movement of investment capital and workers between countries which encouraging exports. Improved connectivity can also enhance an economy’s performance by making it easier for firms to invest outside their home country, which is known as foreign direct investment (FDI).

Improved connectivity may favour private investment as increased passenger traffic and trade that accompanies improved connectivity can lead to a more favourable environment for foreign firms to operate in. Tax contribution Aviation makes a substantial contribution to the public finances. In this section we estimate the corporation tax paid by aviation companies, the income tax paid by their employees, social security payments and the revenue collected through aviation taxes. These estimates reflect the direct tax payments of the aviation sector.

We also provide a warning of the taxes paid by the aviation sector’s supply chain and taxes raised through induced spending channels. They do not include increases in the overall Malaysian tax base driven by aviation’s contribution to investment and productivity growth in the wider economy. Benefits to Malaysian tourism Air transport lies at the heart of global business and tourism. Through its speed, convenience and affordability, air transport has expanded the possibilities of world travel for tourists and business travellers alike, allowing an ever greater number of people to experience diversity of geography, weather, culture and markets.

Tourism, both for business and vacation time purposes, makes a large involvement to the Malaysian economy, with foreign visitors spending just over MYR 60. 7 billion in the Malaysian economy each Benefits to Malaysian trade Compared to other modes of transport, air luggage is fast and reliable over great distances. However, these benefits come with a cost attached. Therefore, it is mostly used to deliver goods that are light, compact, perishable and that have a high unit value. These key characteristics of air freight are most visible in the data on the modes of transport used in world trade.

For example, data on the weight (volume) and value of goods carried by air, sea and land transport is available for global trade. While air accounts for just 0. 5% of the tonnage of global trade, air freight makes up 34. 6% of the value of global trade. Structure of Malaysia aviation industry In Malaysia, airlines are classified by the government on the basis of the amount of revenue generated from operations. These classifications are major, national and regional. Majors: Major airlines generate operating revenues of more than $1 billion annually.

Previously called trunk carriers, they generally provide nationwide, and in some cases, worldwide service. Nationals: National carriers are scheduled airlines with annual operating revenues between $100 million and $1 billion. Like the majors, nationals operate mostly medium- and large-sized jets.. Regional: Regional carriers are airlines whose service is limited to a single region of the country, transporting travellers between the major cities of their region and smaller, surrounding communities Regional carriers are divided into three sub-groups: large, medium and small.

Large regional’s is scheduled carriers with operating revenues of $20 million to $100 million. Most of their aircraft seat more than 60 passengers. Medium regional’s follow the same market strategy as the large regional’s and operate many of the same type aircraft. Their distinction is simply that they operate on a smaller scale, with operating revenues under $20 million. Small regional’s, represent the largest segment of the regional airline business. There is no official revenue definition of a small regional. Cargo Carriers

Within the categories of major, national and regional airlines are, not only passenger carriers, but cargo carriers as well. cargo carriers called freighters, carry nothing but freight. Freighters are, most often, passenger jets that have been exposed of their seats to maximize cargo-carrying capacity. Among the largest cargo carriers are companies that began in the small package and overnight document-delivery business. These are the integrated carriers, so called because they offer door-to-door service, combining the services of the traditional airline and the freight forwarder.

Line Personnel These include everyone directly involved in producing or selling an airline’s services – the mechanics, who maintain the planes; the pilots, who fly them; the flight attendants, who serve passengers and perform various in flight safety functions; the reservation clerks, airport check-in and gate personnel, who book and process the passengers; ramp-service agents, security guards, etc. Line personnel generally fall into three broad categories: engineering and maintenance, flight operations, and sales and marketing.

These three divisions form the heart of an airline and generally account for 85 percent of an airline’s employees. Operations This department is responsible for operating an airline’s task force of aircraft safely and efficiently. It schedules the aircraft and flight crews and it develops and administers all policies and procedures necessary to maintain safety. It is in charge of all flight-crew training; both initial and recurrent training for pilots and flight attendants, and it establishes the procedures crews are to follow before, during and after each flight to ensure safety.

Dispatchers also are part of flight operations. Their job is to release flights for takeoff, following a review of all factors affecting a flight. These include the weather, routes the flight may follow, fuel requirements and both the amount and distribution of weight onboard the aircraft. Weight must be distributed evenly aboard an aircraft for it to fly safely. Maintenance Maintenance accounts for approximately 11 percent of an airline’s employees and 10-15 percent of its operating expenses.

Maintenance programs keep aircraft in safe, working order; ensure passenger comfort; preserve the airline’s valuable physical and certify maximum utilization of those assets, by keeping planes in excellent condition. Airlines typically have one facility for major maintenance work and aircraft modifications, called the maintenance base; larger airlines sometimes have more than one maintenance base. Smaller maintenance facilities are maintained at an airline’s hubs or primary airports, where aircraft are likely to be parked overnight, Called major maintenance stations.

A third level of inspection and repair capability is maintained at airports, where a carrier has general operations, although less than at its hubs. These maintenance facilities generally are called maintenance stations. Sales and Marketing This division encompasses such activities as pricing, scheduling, advertising, ticket and cargo sales, reservations and customer service, including food service. Airline prices change frequently in response to supply and demand and to changes in the prices of competitors Fares. Schedules change less often, but far more often than when the government regulated the industry.

Airlines use complicated computer reservation systems to advertise their own fares and schedules to travel agents and to keep track of the fares and schedules of competitors. Travel agents, who sell approximately 80 percent of all airline tickets, use the same systems to book reservations and print tickets for travellers. Reservations and Ticketing There are major changes in air transportation, which simplify the process for airline passengers to make a reservation and to purchase a ticket. Electronic commerce is playing a significant part in the airline industry. ll of the major airlines are now offering electronic ticketing for domestic and international air travel. Electronic ticketing allows an airline to document the sale and track the usage of transportation. Passengers no longer worry about carrying flight coupons or losing their tickets. Passengers have the ability to shop for the lowest priced transportation, make or change a reservation, request refunds etc. , not only from their travel agent but from their own personal home computer or from a telephone, on the way to the airport.

A boarding pass is issued at the airport in exchange for proof of a reservation and payment the number of air travellers shopping, making reservations and purchasing electronic tickets using the Internet is increasing daily. Self-service automated ticketing machines are also widely available at major airports around the country. Staff Personnel These include specialists in such fields as law, accounting, finance, employee relations and public relations. These functions are to support the work of the line personnel, so that the airline runs efficiently and earns a profit.

For the most part, staff personnel work out of corporate headquarters and fall into seven broad job categories typical of major corporations: finance & property, information services, personnel, medical, legal, public relations and planning. Finance & property handles company revenues and finances, purchase of food, fuel, aircraft parts and other supplies needed to run an airline. Information services designs and maintains the company’s internal computer systems, used to store and analyze data needed for operations and planning. Subcontractors

While major airlines typically do most of their own work, it is common for them to farm out certain tasks to other companies. These tasks could include aircraft cleaning, fuelling, airport security, food service and in some instances, maintenance work. Airlines might contract out for all of this work or just a portion of it, keeping the jobs in house at their hubs and other key stations. E Business activities of Malaysia Aviation Industry Most of the airline industry involves the works of maintenance and manufacture of aircraft and also maintaining an airport.

Manufacturing of aircraft is huge business of this aviation industry. Thousands of people work for manufacturing of aircraft. To built and construct and operation of airport, the huge number of people for working for that employees include from the air traffic controller to housekeeping, from the airport manager to parking at attendance. The aircraft carriers not only employ the pilots but also maintenance crews for turnaround of the craft. Maintenance of the aircraft is one of the most businesses. Each airline has its own maintenance crews to maintain the aircraft.

They work closely with the technical support. Aircraft undergo periodic maintenance to ensure the safety of the airplane. The intensive maintenance programme eliminates major problem of aircraft and also upgrade and modifications are made. The huge networks of maintenance technicians are the stamina of the aviation industry. Malaysia aviation Industry provides airline transportation services worldwide. It mostly provides air transportation, cargo and maintenance services. It holds more than 117 aircrafts which covers more than 100 destinations around the world.

The company has classified its business into two segments like airline operation and cargo services and also provide many services like or include engineering hotel operations, computerized reservation services, coach transportation, retailing of goods and tour and travel related activities. The company is along with its subsidiaries. Malaysia airports allows restructuring to focus on its core business activities as an airport operator with improved business initiatives such as restructuring of management structure, setting of key performance indicator for senior management and identifying opportunities for abroad ventures.

Malaysia airports have been won numerous awards in the past few years in respect of operational efficiency, Customer satisfaction, corporate governance and corporate responsibility. The managing director of Malaysia airports, Sri Bashir Ahmad Abdul Majid Jaid for the new agreement for it focuses on its core business after launching of its business direction. On the development of this five year, business direction to grow our airport management and operations business domestically and internationally.

We have to be creative in maximising revenue from non-aeronautical activities in the creation of world class airport business. We have achieved significant cost and services improvement for our continuous improvement programme. This play a major role to became stronger position. Malaysia airport may achieve a higher passenger growth over the period which could result in additional passenger numbers higher than the end of last year. It is continuously monitoring the growth and the forecast will be reviewed time to time.

On services quality, our focus is on developing staff to deliver service level standards of the highest quality as part of our talent development efforts. Growth through commercial activities is essential for delivering strong returns to shareholders whereas enabling aviation charges to remain competitive in turn driving further airport growth. Our strategy focus on traffic growth service excellence and commercial enhancement will support the aspiration of the government to achieve the goals of high income, inclusiveness and sustainability. Business benefits SITA’s partnership approach with us – focusing on business goals and delivery success, rather than simply trying to sell us existing solutions – has been greatly appreciated by all of us at Malaysia Airlines,” says Idris Jala. “SITA really understood our business turnaround plan, and continues to work hard in delivering the best and best and most appropriate solutions to drive our business forward – profitably. ” Key business benefits of the Horizon solution delivered by SITA include: Reduced costs * 100% e-ticketing has eliminated paper ticketing Reduced distribution costs with the move to online sales * Closer integration between PSS applications and industry / government compliance needs – e. g. advance passenger information (API) * Reduced network spend, with the added advantage of network services becoming part of passenger business costs rather than IT costs Increased revenue * Faster revenue recognition * Improved revenue management * Better control of pricing and fare management functions * More competitive fares through dynamic pricing, resulting in higher load factors * Enhanced revenue protection, with minimized cancellations

Increased customer satisfaction * Significant improvements in business processes and customer service * A more convenient and efficient travelling experience for passengers, from the making of reservations to the boarding of flights * More efficient passenger movement at airports and reduced congestion The Indian aviation company: air India Air India is the flag carrier airline of India. It is part of the government owned Air India Limited (AIL) which provide services or operates a fleet of Airbus and Boeing aircraft serving Asia, the United States, and Europe.

Its corporate office is located at the Indian Airlines House, in the parliament street of New Delhi. Air India has two major domestic hubs at Indira Gandhi International Airport and Chhatrapati Shivaji International Airport. Air India was a start in the aviation industry even before the independence of the country. Air India Limited provides passengers air travel across domestic and also international routes in India. It has three subsidiaries: Air India Cargo, Air India Express and Air India Regional.

The company also offers air cargo services. It operates 62 stations and 17 stations connected to its international destinations. The company operates flights to various international destinations comprising Europe, the Asia Pacific, the Gulf and Middle East, south Asia, the United States, and Canada. In addition, it has code-sharing arrangements with other international carriers to various destinations in Europe, the United States, Canada, the Asia Pacific, south Asia, and Africa.

Air India Limited operates a fleet of approximately 124 aircraft. The company was formerly known as National Aviation Company of India Limited and changed its name to Air India Limited in October 2010. Air India Limited was founded in 1932 and is based in Mumbai, India. The Economic Times Brand Equity Survey 2010 ranked Air India as the Most Trusted Brand in the aviation sector in India. It has also been adjudged as the ‘Best Airline MRO in India’ and ‘Best Engine MRO in India’ by Indian Aviation and Stat Trade Times in March 2011.

Cite this Overview of Malaysia Aviation Industry

Overview of Malaysia Aviation Industry. (2016, Oct 13). Retrieved from https://graduateway.com/overview-of-malaysia-aviation-industry/

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