Malaysia Airlines System Essay

2407 Words Dec 21st, 2008 10 Pages

The purpose of this paper is to illustrate the importance of studying the internal and external market forces that could contribute to a company’s sales decline. This piece also delves into the ensuing strategies-revamp in the corporation’s marketing mix to counter declining sales. As a scenario, this study would be taking the point-of-view of a Marketing Manager idealising and justifying the team’s actions in a sales boost bid.

For this paper, studies would be based on the national carrier of Malaysia, Malaysian Airlines System (thereafter referred to as MAS). They have been dogged by continuous sales decline since the beginning of this decade. In the beginning of 2006, the company recorded some RM 10 billions of loss for
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External Factors

The government’s decision to transfer majority of the domestic routes to be operated under the local low-cost carrier, AirAsia (The Edge Malaysia, 2006) decreases the sales volume of Malaysian Airline System (MAS). As AirAsia has been offering low-cost, no frills and short haul flights, the fares of are generally affordable to public consumers. Due to which, many opt for AirAsia instead of MAS to travel within the country albeit MAS has yet to fully omit all the stipulated domestic routes from its current operation.

Crude oil prices have been very volatile in the market as concerns in regards to Iran’s uranium enrichment programme escalate during the first quarter of the year (The Edge Malaysia, 2006). To accommodate the expansion of fleet, MAS requires more jet fuel. Therefore higher fuel surcharge is implemented and this increases the cost of air ticket. Because of which, people turned to other alternative airlines which offers better value for money.

The hike in crude oil prices marks the starting point in building the inflationary pressures among consumers. Without proper indexation implemented, consumers feel that they are worse off as they have less surplus funds and are bound to spend prudently. They are more likely to travel on a budget. Unanticipated inflation like this brings about the decline in sales for the aviation industry.

Political unrest, terrorist threat, natural disasters or outbreak of diseases in a nation changes

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