MAS Firefly – Will It FLY or Catches FIRE Midway?

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Mar 14 2007
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Malaysian Airline System Berhad (KLSE: MAS, stock-code 3786) Wednesday said it is launching a new airline to be known as Firefly. Firefly, which will be managed by a separate management team, aims to begin operations with two Fokker 50 aircraft in early April 2007, the national flag carrier said in a statement.

It will operate twice daily services out of Penang International Airport to Kota Bahru, Langkawi, Kuantan and Kuala Terengganu. It will also have daily services to Phuket and Koh Samui. Firefly will be operated by MAS’ wholly owned subsidiary, FlyFirefly Sdn. Bhd., which was formerly known as Kelas Services Sdn. Bhd. MAS said the Department of Civil Aviation Malaysia has issued the Air Services License and Air Operator’s Certificate to Firefly effectuve from 17 March 2007.

Firefly will be the country’s second low-cost carrier after the runaway success of AirAsia Berhad (KLSE: AIRASIA, stock-code 5099). “We expect between now and one year, it will be on a break-even keel and the following year we should be able to make money. There is no subsidy from the government,” Malaysia Airlines Chief Executive Idris Jala told reporters.

It will be very interesting to see if this new baby (or rather experiment toy) of MAS can really FLY or catches FIRE in the sky. Remember what happen to the predecessor of AirAsia? Government-linked conglomerate DRB-Hicom’s (KLSE: DRBHCOM, stock-code 1619) initially thought they can pull it through and make it big with the airline but ended up with two Boeing jets and $37 million in debt. Tony Fernandes bought the bankrupt airline for a token of 1 ringgit (26 cents) and assume $12 million of Air Asia debts. And the rest is history.

When asked about his phenomenal success during an interview by CNN, Tony stressed that it’s the culture of the company to remain humble as it’s crucial to remember the roots of their beginning. Air Asia operates in a family-like environment without hierarchy where marketing, finance, engineers, cabin crew and pilots are all in one office which guarantee effective communication.

So, can Firefly emulate the same success as AirAsia? Maybe the most appropriate question is whether Firefly has the right captain who can run the low-cost airline professionally and profitably. Already there’re small groups of people who try to gain cheap mileage by applying political pressure even before it started to fly. You should read this funny news about AirAsia must project our identity which amongst others stressed the uniform of air stewardess which did not project a Malaysian image.

Do you think Firefly will FLY or catches FIRE midway in the sky? Will it fails the same way as how DRB-HICOM started it? The only difference between the DRB-HICOM project and this new pet project is the planes model – DRB started with two Boeing jets while MAS’s Firefly starts with two Fokker. I think it’s time to start stocking sausages and burgers to start the barbeque. Anyone care to join me?

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