This article is published in Air Transport World part of Aviation Week Intelligence Network (AWIN), and is complimentary through Jan 10, 2025. For information on becoming an AWIN Member to access more content like this, click here.
One of the key challenges Malaysia Airlines faces concerns turbine issues with its Boeing 737-800 CFM56 engines, which caused isolated service interruptions this past summer.
When tasked with turning around Malaysia Airlines in 2017, Izham Ismail’s first priority was to boost employee morale. As managing director at parent company Malaysia Aviation Group (MAG), Izham knew that the Kuala Lumpur-based airline and its employees had endured much, including the loss of two Boeing 777s—MH370 and MH17—in 2014.
To attract new talent, Izham introduced work-from-home initiatives, which, in hindsight, also enabled Malaysia Airlines and MAG affiliates Firefly, MASkargo and MAB Engineering to continue operating smoothly as the COVID pandemic spread. The pandemic also provided Izham the chance to restructure MYR 25 billion ($5.8 billion) of debt, secure new reliable partners such as travel and ticketing agencies, and end a 26-year partnership with Brahim’s Food Services over contract disagreements.
“Which airline today would dare to drop their caterer?” Izham asks, but Malaysia did just that and then established its own catering unit, MAG Catering Operations (MCAT), although it initially faced significant inflight catering disruptions despite the long-term benefits.
“We went in with our eyes wide open. We knew exactly what we were doing,” Izham said.
Since its establishment, MCAT has expanded its facility from 36,000 sq ft to 70,900 sq ft to meet MAG’s growth needs.
Izham also introduced the airline’s 2030 Vision, a goal to make Malaysia profitable and one of the best airlines in the region. In March, Malaysia reported a full-year net profit of MYR 766 million ($162.6 million) for 2023, marking the first return to profitability since 2010. A few weeks earlier, Izham stated that his goal was to make 2024 and 2025 years of credibility, emphasizing that the achievements were not “a fluke.”
In July, however, supply chain bottlenecks resulted in a series of aircraft diversions that damaged the airline’s brand reputation. To prioritize safety, Izham ordered a 20% capacity reduction across the airline’s network from August that will continue through December.
Of the seven disruptions that occurred in the summer of 2024, three were engine-related, while four were attributed to part and component failures. Izham explained that the high-pressure turbines in the airline’s Boeing 737-800 CFM56 engines began to fail earlier than expected, and engine overhauls were taking longer than usual. He also pointed out that the rotable spares received from suppliers experienced reliability issues, which contributed to the diversions.
These problems have been worsened by delays in the delivery of new aircraft, leaving the airline without a healthy pool of spare planes. MAG has received only four of the 13 Boeing 737 MAX-8s it was promised by 2024. Similarly, the airline was supposed to take delivery of four Airbus A330neos by the end of 2024 but now only expects to receive three.
Despite the challenges, Izham remains confident changes are made where and when they make sense, as in the announcement just weeks after the capacity cut that Kuala Lumpur-Paris service would resume from March 22, 2025.
He also shared that while customer satisfaction initially declined when the airline began rebooking passengers following the capacity cuts, brand sentiment improved.
“This shows that Malaysia Airlines is doing the right thing. Only 5% of customers requested refunds, while the rest accepted rebookings,” he said. “We have a clear vision of what 2030 looks and feels like. Tough decisions have to be made now so we can fully restructure the organization. We’re doing what needs to be done now so that by Jan. 1, 2025, we can put all of this behind us.”
Related Content
