UNIVERSITI TEKNOLOGI MARA FACULTY OF

BUSINESS MANAGEMENT

MGT400 INTRODUCTION TO MANAGEMENT GROUP PROJECT

REPORT

Challenges in Managing a Company

(Malaysia Airlines Berhad)

Prepared by:

NO NAME MATRIC NO
1 NURUL AININ SOFIYA BINTI NORHAMIDI 2022645932

2 NUR FARISAH ALIAH BINTI MOHD PISOL 2022841772

3 NUR WARDINA SAFI BT OSMAN 2022622194

4 NUR AISYAH BINTI MOHD FAKARUDDIN 2022478764

5 FATIN NADIAH BINTI MOHD NASIR 2022622174

Prepared for: Madam Nor Lela Binti Ahmad

Date of Submission: 18/1/2023

 MALAYSIA AIRLINES BERHAD

1. INTRODUCTION

- Background of the Company

There are plenty of companies that provide air transport service to customers. Malaysia
Airlines is the official national airline in Malaysia. The airline has been owned and operated by
Malaysia Airlines Berhad, which was previously known as Malaysia Airline System. Malaysia
Airlines Berhad is a Kuala Lumpur-based Malaysia's national flag carrier. It was originally
established as Malayan Airways Limited and flew its first commercial flight in 1947. After the
Federation of Malaysia was established in 1963, it was rebranded as Malaysian Airways. The
airline's new names were Malaysia Singapore Airlines (MSA) in 1966 and Malaysian Airline
System in 1972. (MAS).When Malaysian Airline System (MAS) was disbanded from Bursa
Malaysia in 2014 and subsequently ceased operations on August 31, 2015, the business,
Malaysia Airlines Berhad (MAB), began operating as the country's airline on September 1, 2015.
As a part of a larger airline network that also includes its fully owned subsidiaries, Firefly and
MASwings, Malaysia Airlines runs a network of regularly scheduled domestic and international
flights. The Malaysian government, through its sovereign wealth fund, Khazanah Nasional, owns
the entirety of Malaysia Airlines Berhad.

In particular, Malaysia Airlines Berhad engineers, pilots, and cabin staff have a historical
record of boosting national growth and developing talented individuals. In terms of linking
Malaysia to the rest of the globe and integrating Malaysia, the airline has been essential. The
airline provides the best flight options to, from, and within Malaysia. The Malaysia Aviation
Group (MAG) subsidiary Malaysia Airlines operates over 300 flights each day to over 50
destinations worldwide. Malaysia Airlines operates flights to locations all over the world,
including Europe, the Middle East, Australasia, North and South Asia, and Southeast Asia, from
its hub at Kuala Lumpur International Airport. Malaysia Airlines showcases the diverse customs,
cultures, cuisines, and warm hospitality of the nation while in flight. It was created to be a source
of nationalistic pride for Malaysian traditions and culture.
 Organization Chart

Izham Bin Ismail

Group Chief Executive Officer

Boo Hui Yee Ahmad Luqman Bryan Foong Chee Mohd Khalis Abdul
Mohd Azmi Yeong Rahim
Group Chief
Financial Officer Group Chief Group Chief Group Chief Human
Operating Officer Strategy Officer Capital Officer

Lau Yin May Mohd Nadziruddin Nasaruddin A. Bakar Kamarudin Kamilin

Group Chief Marketing Chief Executive Chief Operating Chief Executive Officer,
and Customer Officer, AeroDarat Officer, MASwings MAB Academy
Experience Officer

Mohd Najmi Bin Mansor Mark Jason Thomas

Chief Operating Officer, Amal by Chief Operating Officer,

Malaysia Airlines MAB by Kargo

2. CHALLENGE FACED BY MALAYSIA AIRLINE BERHAD

The Coronavirus outbreak which also known as COVID-19 disease is an infectious disease
caused by the SARS-CoV-2 virus has cause the pandemic around the world which effected the
economy of the business world, and also effected the Planing, Organizing, Leading and
Controlling of Malaysia Airline Berhad.

A. PLANNING

Planning is a process managers use to identify and select appropriate goals and courses of
action for an organization. The organizational plan that results from the planning process details
the goals of the organization and the specific strategies managers will implement to attain those
goals. Due to the rising number of COVID-19 cases worldwide, travel restrictions have been
implemented by the effected countries in an effort to halt or reduce the disease's spread. The
travel restriction forbids all actions related to moving from one country or state to another. The
restrictions apply to both domestic and foreign residents. It means that the countries effected will
not welcome travelers from other countries. Malaysia Airlines is one of the enterprises effected
by the COVID-19 infections.

Flight cancellations have occurred in Malaysia as a result of travel restrictions put in

place domestically and internationally because of the COVID-19 epidemic. The Malaysian
government has put limits on both internal and foreign travel beginning March 18, 2020. In the
July parliamentary session, we emphasized the 4.316 million passengers whose flights from the
three local carriers were canceled as well as the 1.211 million passengers whose flights were
postponed. Due to the travel and border restrictions put in place by many nations worldwide,
Malaysia Airlines bhd's business performance and cash flow were significantly damaged. Due to
the Covid-19 outbreak, Malaysia Airlines Bhd is struggling since the airline's share price has
dropped by 50% or more in the third quarter of 2020. According to the company's financial
statement, Malaysia Airlines Bhd alone paid out RM294 million in refunds for 190,000
passengers whose flights were canceled at the same time last year.In addition, some of the
628,000 passengers received reimbursements totaling RM399 million.
 Next, low demand for air travel. A sharp decline in demand for Malaysia Airlines has
been caused by changes in passenger behavior following the COVID-19 issue, travel restrictions,
and the subsequent economic crisis. Many employees lost their jobs as a result of COVID-19 or
they were unable to do their business as usual. The government has also declared that everyone
must stay inside their houses during MCO which is a movement control order that will be
announced within two weeks by the government. They experience an economic crisis as a result
and are unable to travel somewhere else and must stay at home. Furthermore, due to travel
restrictions, many people are unable to travel anywhere inside or outside of malaysia. If someone
breaks the rules, they will be sued by the government.

B. ORGANIZING

Conversely, less coordination and interaction between individuals and functions are required
to collect resources if the external environment is stable, resources are easily accessible, and
ambiguity is low. In this circumstance, managers prefer to make decisions within a well-defined
hierarchy of power and to utilize specific rules, standard operating procedures (SOPs), and
stringent norms to direct and govern employees' activities which is a more mechanical type of
organization. All of these factors are used by Malaysia Airlines to surpass the challenge of the
pandemic Covid-19.

Malaysia Airlines has reduced back operations since the MCO's inception, and provided
unpaid leaves to more than 13,000 of its employees, and is currently going through an urgent
restructuring exercise to safeguard its survival. Especially, the higher management has reduced
the salary by 10% and they also do not grant the allowance. In an article by theedgemarkets.com,
Captain Izham Ismail claimed that the reduction is a part of efforts to deal with the sharp drop in
demand brought on by the coronavirus (Covid-19) pandemic. The organization took this action
to protect Malaysia Airlines financial flow and stop the firing of employees earning low salaries.

Furthermore, the disruption of the pandemic causes numerous requests from customers to
refund back their money. However, airlines must consider the concepts of justice and rationality
when deciding how to compensate the impacted customers. For the mutual benefit of both the
airlines and the impacted customers, the refund procedure should put the affected customers in a
 comparable situation to when they bought the ticket. That is how the organization handled this
situation during the peak of Covid-19. Malaysia Airlines was expected to maintain its positive
trend in 2020, However, from most of March to June 2020, the COVID-19 pandemic prompted
all airlines to halt operations and ground practically all of their assets. The company continued to
support the country and its citizens by maintaining a few domestic and relatively low
international connectivity as well as primarily supporting necessary movements. Malaysia
Airlines also set up rescue and repatriation flights, and the maintenance of worldwide supply
chains through its cargo operations at the peak of the COVID-19 crisis. Malaysia Airlines and
their sibling companies’ back office functions, together with flight and airport operations, have
all been scaled back as a result of the major capacity reduction. As required by several countries
to stop the spread of Covid-19, the mass of employees worldwide work from home. However,
the Group makes sure that throughout all of its operations, it upholds the greatest safety
standards.

C. LEADING

The best organization will be built by the best leader. Any firm needs strong leaders because
their abilities will determine whether or not the business succeeds. Leadership style has a
significant impact on the workplace culture and performance of the organization. The business
community takes COVID-19 very seriously since it is affecting not just one country, but the
entire world. As a result, authorities had to halt virtually all economic activity during the
pandemic to ensure that people would not congregate in large groups. The government policy
does not make any exceptions for Malaysia Airlines. The airline was not immune to the
pandemic's consequences.

Malaysia Airlines is making sure that there are significant safety measures across all of its
operations as the climate gradually changes. As a result, the Malaysian Aviation Group,
announced the launch of its Fly Confidently campaign, which aims to raise awareness of the
company's health-related efforts. According to Group Chief Executive Officer of Malaysia
Airlines, Captain Izham Ismail said, “ In July 2020 we introduced the “Fly Confidently”
campaign, to educate passengers on the enhanced measures implemented across touchpoints at
airports as well as on board.” Due to the success of this campaign, MAS Airlines' COVID-19
 Safety Protocol earns full marks. An evaluation of Malaysia Airlines' COVID-19 health and
safety procedures by the independent organization Airline Ratings resulted in the airline
receiving seven stars, or full marks.

In light of the company's difficulties caused by the COVID-19 pandemic, MAS Airlines
faced the closure of international borders, resulting in a 96%, or so, reduction in flight capacity,
which had a significant impact on the company's financials. Realizing that the crisis was not
going away anytime soon, Malaysia Airlines Group Chief Executive Officer Captain Izham
Ismail decided to look for opportunities within the situation. COVID-19 became a MAS Airlines
hub. It was an opportunity for them to reset their balance sheet, and the exercise was so
successful that MAS Airlines was able to remove MYR 15 billion (US$3.6 billion) of their
liability. The airline was able to complete a full restructure after four months of intense
negotiations with its creditors, with the team working 20-hour days, the first Asian carrier to do
so during the COVID era.

Malaysia Airlines' new employee training programme provides pilots with a springboard
into the digital future. According to company officials, it is the next step toward recovery in a
post-pandemic world. The airlines launched MH EDGILE, a programme aimed at upskilling and
reskilling over 2,000 employees, the majority of whom are pilots and cabin crew members
affected by the COVID-19 air travel disruption.“This is the perfect time for the staff to reinvent
themselves,” said Captain Izham Ismail, group CEO of MAS Airlines Berhad. The Learning &
Development programme is designed to assist employees in becoming more efficient in their
current roles as they continue to support business goals. Trainees will be mentored in their new
roles, but the scope and duration of the assignment will be determined by the needs of the
airlines. MAS Airlines is on a mission to transform MAG employees into a future workforce
capable of adapting to new challenges and prepared for what lies ahead in the post-COVID 19
world.

D. CONTROLLING
 The practice of controlling is used by managers to monitor and control how successfully an
organization and its staff are doing tasks that are crucial to accomplishing organizational goals.
Due to the Covid 19 outbreak, the majority of businesses had significant issues. The airline
industry has been one of the most negatively hit industries. Malaysia Airlines Bhd, one of the
well-known airline companies, was also impacted. Malaysia Airlines ran their company using a
cost leadership strategy that was appropriate for their target market. Despite the fact that the
majority of overseas clients are from the working class, they frequently look for lower-cost
flights because they need to manage their own budget, particularly in the wake of the pandemic.
Most people who can only afford to travel once have been able to do so up to three times since
low-cost options have been accessible. Additionally, Malaysia Airlines Bhd introduces a
ticketless method that lets customers purchase their tickets online at a lesser cost. Although
Malaysia Airlines sustained significant losses due to the pandemic, they still need to entice
people to travel, and the best strategy is to implement some promotion programmes.

These initiatives include offering discounts for those who travel alone or with a loved one,
selling the first 1,000 seats each quarter at half price, and rewarding customers who post about
their flying experiences on Facebook and Instagram with the hashtag “#The Best Moment with
Malaysia Airlines Bhd Low Cost Carrier”. Aside from it, the physical proof of Malaysia Airlines'
low cost carrier may be divided into on-ground and in-flight facilities. The booking office, the
luggage facility system, and the website make up the ground environment. In-flight service is the
most significant operation that has a noticeable effect on customers. To boost passenger safety
for low cost airlines, Malaysia Airlines Bhd continues to use Boeing 737-800 and A330-300
aircraft. The flight's cleanliness and the staff's formal appearance are other variables that are
taken into consideration to enhance brand perception. The physical evidence on the floor was
meticulously prepared by Malaysia Airlines to prevent the spread of COVID-19. Furthermore,
Malaysia Airlines Bhd takes great pleasure in providing the highest level of customer service,
therefore it pays particular attention to the flight attendants who will represent the firm on the
ground. The training given to flight attendants aims to make them more tolerant of other cultures'
beliefs and practices. Additionally, everyone of the personnel has received the necessary training
regarding safety precautions and what to do in an emergency.
 Although they are being watched to break the COVID 19 chain, Malaysia Airlines Bhd staff
members continue to offer high levels of service quality at reasonable prices. Not to mention,
Malaysia Airlines provides a range of booking alternatives to customers, including online and
offline. Following a reservation, an email is used to generate the ticket, and the SMS is used to
update other details like boarding and departure times or cancellations. In an effort to limit
physical contact between customers and employees and to break the covid 19 tie, Malaysia
Airlines enhanced the possibilities for customers to purchase tickets online after the covid-19
epidemic.

3. CONCLUSION

To conclude, it is proven that the challenge that Malaysia Airlines Berhad faced, which is
the COVID-19 outbreak, has affected the management in aspects of Planning, Organizing,
Leading and Controlling. As a big company, Malaysia Airlines Berhad needs to master how to
handle the challenges faced. In contrast to other airlines now in operation, Malaysia Airlines
Berhad (MAB) is viewed as a successful business with a powerful brand. This report focuses
mostly on the challenges Malaysia Airlines Bhd has encountered and the search for the best
survival technique during the Covid-19 pandemic. Due to flight cancellations brought on by the
COVID-19 epidemic, Malaysia Airlines Berhad experienced a significant loss of passengers who
had purchased tickets to fly. Additionally, a lot of governments restrict public access to
international aviation travel. As of the beginning of October 2021,The Malaysian authorities
allowed residents to fly overseas utilizing Standard Operating Procedures (SOP) once the
covid-19 occurrences in Malaysia were under control. To accomplish the objectives and thrive in
this Covid-19 pandemic, Malaysia Airlines Bhd needs to present a new marketing strategy as
mentioned in the aforementioned recommendation. The airline sector needs to keep putting
customer service first at every stage of the travel process. Deliver the greatest customer
experience to travelers on all routes and classes of travel, with a focus on improving online
services, especially during this Covid-19 pandemic.

RECOMMENDATIONS
 As we know, Malaysia Airlines is still recovering from COVID-19 epidemic. For
planning, Malaysia Airlines has introduced brand-new, flexible rebooking options with
immediate effect. The Ultimate Flexibility waiver policy provides their customers the flexibility
to make changes to their existing bookings. Next, for organizing the physical evidence of
Malaysia Airlines Bhd's low-cost airline can be divided into facilities on the ground and in the
air. The ground environment consists of the website, the luggage facility system, and the booking
office. The most crucial task that directly impacts customers is in-flight service. Hence, there will
be less interaction with the workers at that time. Furthermore, for leading, the upper leadership of
Malaysia Airlines Bhd must consider ways to strengthen Malaysia Airlines in order to maintain
its competitive pricing while cutting employee turnover rates, increasing seat capacity, lowering
overhead expenses, and creating creative customer retention initiatives. The value of services
should also be increased by Malaysia Airlines Bhd by enhancing the booking procedure,
flexibility of flight schedules, and effectiveness of check-in and check-out at the airport. Last, for
controlling, Malaysia Airlines Bhd takes great pride in offering the best customer service,
therefore it pays close attention to the flight attendants who will serve as its representative. The
flight attendants receive training to help them understand the attitudes and ways of other
cultures. Additionally, everyone of the personnel has received the necessary training regarding
safety procedures and what to do in an emergency. Malaysia Airlines Bhd provides its staff with
training programmes that include assessments of their physical, mental, and cognitive capacities
as well as their ability to make judgements under pressure.

4. REFERENCE

CAPA, (n.d.), Malaysia Airlines Berhad,

https://centreforaviation.com/data/profiles/airline-groups/malaysia-airlines-berhad

Kang, S. L. (2020, March 12). Malaysia Airlines staff told to take unpaid leave as Covid-19
outbreak strains financials. The Edge Markets.
https://www.theedgemarkets.com/article/malaysia-airlines-asks-staff-take-three-months-unpaid-l
eave%C2%A0

Kavipriya Ragulan, November 2021, The Survival of Malaysia Airlines Bhd (MAS) During the
Covid-19 Pandemic
https://www.researchgate.net/publication/355978073_The_Survival_of_Malaysia_Airlines_Bhd_
MAS_During_the_Covid-19_Pandemic

Malaysia Airlines. (n.d.). Malaysia Airlines understands the concerns and uncertainty
surrounding air travel amidst the COVID-19 outbreak.
https://www.malaysiaairlines.com/vn/en/advisory/experiencing-high-volume-of-calls.html

Siti Farhana Sheikh Yahya, October 2020, The impact of COVID 19 on Malaysia’s airline
industry
https://www.astroawani.com/berita-malaysia/impact-covid19-malaysias-airline-industry-264574

Timeline : COVID-19 and the aviation industry: Impact and policy responses. (n.d.). OECD.
https://www.oecd.org/coronavirus/policy-responses/covid-19-and-the-aviation-industry-impact-a
nd-policy-responses-26d521c1/

5. APPENDICES

Malaysia Airlines Berhad’s website