MAS: No plans to lay off staff

MALAYSIA Airlines (MAS)(3786) says it has no plans to join other airlines in laying off staff at this stage to save cost.

Its chairman Tan Sri Dr Munir Majid said such a proposal was not up for discussion, but the national carrier, which posted its first operating loss in over two years in the first quarter, was looking at other means of conserving cash in this challenging economic environment.

"We are currently in a consultative process which requires discussion and evaluation on how to keep everyone employed," he told reporters after the group's annual and extraordinary general meetings in Kelana Jaya yesterday.

Last week, it was reported that MAS was in talks with its employees on cost-reduction measures, including reduced work days and pay cuts across the board.
Munir said salary cuts may not be necessary as the airline may review its remuneration packages instead.

"We don't have a definite period on when this consultation will end as we don't want to rush the process," he said, adding that the board of directors was not set on making a decision at its next board meeting next month.

Munir's announcement came around the time when at least three major Asian carriers announced drastic measures to cut cost, amid deteriorating business conditions.

Last Saturday, Singapore Airlines said it will cut salary of management staff from July, ranging between 10 per cent and 20 per cent, while its board of directors has agreed to take a cut of 20 per cent as part of efforts to keep the airline profitable.

Japan Airlines plans to eliminate about 1,200 jobs while the government is considering pumping money into the airline. Air India, meanwhile, has been forced to delay staff salary payments.

Earlier, MAS launched its global low fares campaign, which will see the airline selling some six million seats at low fares, to stimulate travel demand.

Managing director and chief executive officer Datuk Seri Idris Jala said that the low fares were only made available for lean flights, in line with the airline's dual pricing strategy.

In Malaysia, the low fare campaign comes in the form of the Malaysia Airlines Travel Fair (MATF), which now entitles customers to earn Enrich miles despite purchasing low fares.

MATF, which started yesterday until July 5, is for the travel period between June 29 and December 15 2009.

MAS senior general manager of sales Datuk Bernard Francis said MAS hopes to generate RM50 million in sales from its second MATF this year. The first MATF for the year was held in February and recorded sales of RM100 million.

He added that the airline will offer more than 70 travel fairs globally until 2010 and that the MAS Stimulus Package launched earlier this year has seen sales increase up to 30 per cent.

Although Idris said that it was difficult for MAS to surpass last year's revenue of RM15 billion due to lower passenger travel, the airline has seen load factors improve to 65.9 per cent as at June, from 56 per cent recorded in its first quarter of 2009.

On the impact of influenza A (H1N1) virus, MAS has seen some decline in terms of passenger travel to North Asia.

In response to Deputy Prime Minister Tan Sri Muhyiddin Yassin's call for Malaysians to stay away from Australia and the US, Idris said that people should take into account the associated risk when travelling.

"But we need to compare the risk now with SARS (Severe Acute Respiratory Syndrome). Relative to SARS, the severity is not as bad but we need to take the necessary precautions," he said.