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Has MAS checkmated AirAsia?

21 Jun

First let me get this off my chest. I just flew in form Singapore this afternoon on MH612. We were made to sit in the plane for almost and hour in Changi with no air conditioning – and this was in the blazing heat at 3 pm in the afternoon. The reason for the delay was some technical problem that needed to be fixed but for pete’s sake – do put on an APU and pump in some air conditioning. MAS I understand you needing to be cheap, but stop being a cheapskate.

Anyway it is interesting to watch the MAS – AIRASIA battle unfold. MAS has launched its 2 million super cheap seats, by the way, not in retaliation to AIR ASIA but to flog of excess inventory it says….. Well I am sure that this is a move that Air Asia could never have imagined MAS doing.

Inadvertently MAS has used it otherwise unsold capacity to effectively put a lid on AIR ASIA’s pricing. After all if I am going to fly I will check both MAS’s and Air Asia’s fares and if MAS is a bit more expensive, the same, or cheaper – I will fly MAS. I don’t have to pay extra for my meal on board and I know get 20kg of luggage allowance to go with it.

Essentially what MAS is doing is shifting over “price shoppers” to consider MAS as a real alternative. Look at the amount of advertising MAS is doing – and MAs has historically done zero price advertising.

With the high fuel prices MAS still has the advantage of the business class and first class passengers to who are really paying for the full flight cost , which Air Asia doesn’t have. I laud Tony Fernandez’s initiative to say he will not hike up fuel surcharges but instead turn to merchandising to recover cost. In reality Tony needs to get his other businesses up and running – Tune Hotels, Tune Money etc and well managed he may actually outlast MAS in this tit for tat war.

Whatever it is, this is what the consumers wants – competition that eliminates inefficiencies and passes on the benefits to customers. Unlike other GLC’s like TNB and Telekom;s where the modus operandi is make the customers pay for the inefficiencies, MAS has actually worked hard to take out significant cost while recognizing that customers have a choice.

 
2 Comments

Posted by on June 21, 2008 in Business, General, Leadership

 

Tags: , , ,

2 responses to “Has MAS checkmated AirAsia?

  1. Adilah

    October 17, 2008 at 6:10 pm

    Hello and thanks for your informative mag. Please consider the latest ‘1st Anniversary Sedition Edition’ as an addendum to your story on AirAsia. The latest expose about Fernandes & Mahathir will curl your toes. Anyway, thanks and keep up the excellent work

    Adilah
    Causeway Co-Op
    a.horribilis@yahoo.com

     
  2. Adilah

    October 17, 2008 at 6:12 pm

     

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