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Wednesday November 23, 2005

MAS to raise fares in bid to avoid losses


MALAYSIA Airlines (MAS) will increase overall fares as one of the strategies to resolve its financial problems.  

Deputy Transport Minister Datuk Douglas Uggah Embas said the fare increases would be done cautiously to ensure MAS remained attractive to passengers, taking cognizance of its competitors. 

In winding up the debate in Parliament yesterday, Douglas said several measures would be taken by the national carrier to resolve its losses and ensure profits. 

“This includes increasing MAS’ revenue for all destinations, and the measures involve increasing fares,” he told the Dewan Rakyat. 

Another measure was for MAS to increase its capacity and review flight frequencies. This involved an in-depth study as it included operations at all destinations and would take into account the operational cost. 

“All steps to be taken –whether to reduce flight frequencies – will be discussed with the Government after taking into account the importance of the destinations to tourism,” he said. 

Douglas also said MAS had undertaken an in-depth study to reduce operational costs at all levels of the company. 

On capital expenditure, he added that MAS would undertake only key projects that would bring positive returns on investment. 

MAS would also decide on disposing of certain assets. 

Another measure was fuel hedging to cushion the impact of increasing fuel prices.  

Douglas also said MAS would undertake strategic measures to strengthen its financial position, including: 

· Increasing its Golden Holidays packages and temptation products; 

·Increasing maintenance, repairs and overhaul jobs for other airlines;  

·Marketing its facilities at the MAS Academy to other airlines; and 

·Increasing revenue from ground handling services for international airlines. 

“We hope that with these measures MAS will be able to overcome its problem,” said Douglas.  

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