MAS Ecogroupassignment

8/10/2019 MAS Ecogroupassignment

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1.0 Introduction

In cognition of the cost benefit analysis, Malaysia Airlines System Berhad(MAS) seem

relevant to our requirement study. Being knon for the nation!s first commercial airlines

since "#$%, MAS does merit for the orld recognitions and aards they had received andalso distinguished as Southeast Asia&s fourth'largest airline by market value, as based on the

ebsite.

he requirements that are about to be discuss in this assignment includes assessing

the monetary social costs and benefits of Malaysia Airlines caital investment ro*ect over

the given time eriod toards fe criteria and ill be e+lain it the continuous chater.

2.0 Company Background

Malaysia Airlines as first incororated as Malayan Airays imited (MA) on "- ctober

"#/% and as the first commercial flight as national airline in Aril "#$%. MAS oerate the

flights from the home base in 0uala umur International Airortand ith secondary hub

located in 0ota 0inabaluand 0uching. Moreover, MAS has to airline subsidiaries that are

the 1irefly, hich centers on tertiary cities and also MASings, attentions on inter'

Borneoflights. Searately from the airline, the grou also includes aircraft maintenance,

reair and overhaul (M2),

and aircraft handling.

An economic boom in Malaysia during the "#34s surred groth at Malaysia Airlines.

Being

imeccably doing ell for a decade, unfortunately rior to the Asian 1inancial 5risisin "##%,

the airline had suffered losses of as much as 2M -64 million after earning a record'breaking

2M/"# million rofit in the financial year "##67"##%. he airline then introduced measures

to bring the 8rofit and oss account hind into the obscure.

-." he 1inancial 5risis

In the year -449, Malaysia Airlines reorted a loss of 2M"./ billion. 2evenue for the

financial eriod as u by "4./: or 2M3-6.# million, comared to the same eriod for

-44$, driven by "4.-: groth in assenger traffic. International assenger revenue
http://en.wikipedia.org/wiki/Kuala_Lumpur_International_Airporthttp://en.wikipedia.org/wiki/Kota_Kinabalu_International_Airporthttp://en.wikipedia.org/wiki/Kuching_International_Airporthttp://en.wikipedia.org/wiki/Firefly_(airline)http://en.wikipedia.org/wiki/MASwingshttp://en.wikipedia.org/wiki/Borneohttp://en.wikipedia.org/wiki/Asian_Financial_Crisishttp://en.wikipedia.org/wiki/Kuala_Lumpur_International_Airporthttp://en.wikipedia.org/wiki/Kota_Kinabalu_International_Airporthttp://en.wikipedia.org/wiki/Kuching_International_Airporthttp://en.wikipedia.org/wiki/Firefly_(airline)http://en.wikipedia.org/wiki/MASwingshttp://en.wikipedia.org/wiki/Borneohttp://en.wikipedia.org/wiki/Asian_Financial_Crisis


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increased by 2M$9%.6 million or 3.$:, to 2M9.# billion, hile cargo revenue decreased

by 2M6$." million or $.-:, to 2M".9 billion. 5osts increased by -3.3: or 2M-./

billion, amounting to a total of 2M "4./ billion, rimarily due to escalating fuel rices.

ther cost increases included staff costs, handling and landing fees, aircraft maintenance

and overhaul charges, ;idesread Assets


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cometitors for MAS are 5athay 8acific, Singaore Airlines and hai International

Airays.

3.0 Cost Benefit Analysis

5ost benefit analysis (5BA) is a ay of measuring costs and benefits of a rogram. It allos

one to estimate the net gain to society and individual society members.he use of 5BA for

the environmental imact assessment could be measure so that e+ternalities are incororated

into the decision rocess. In this ay, 5BA can be used to estimate the social elfare effects

of Malaysia Airlines investment.

5BA is basically an araisal techniquethat tries to lace monetary values on all benefits

arising from a ro*ect and then comares the total value ith the ro*ect&s total cost. It hasnumerous otential alications although there are inherent difficulties ith the issue of

valuation.

/." Malaysia Airlines 5BA&s unit of cost

/.- Itemie the tangible costs of the intended ro*ect

/./ Itemie any and all intangible costs

/.$ Itemie the ro*ected benefits

/.9 Add u and comare the ro*ect&s costs and benefits

/.6 5alculate a ayback time for the venture

/.% 1indings


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4.0 Conclusion

1undamentally, the rocess of 5BA is comarative so that e can ossibly make *udgments

about hich ro*ects from a limited choice should be given the go ahead. he airlines

industry!s cycle aear to be closely linked to the orld economic climate. ;hen groth in

the orld economy slos don, the groth of demand for air traffic and for air freight also

brakes don. =uring a eriod hen average fares ill continue to decline, control and

reduction of cost in all areas becomes critical and continuous necessity.

So, from the cost benefit analysis, e can agree to

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MAS Ecogroupassignment