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LETTER OF THE DAY - A turn around model for Air Jamaica
published: Wednesday | April 2, 2008
The Editor, Sir:
Your editorial 'Time to make the call on Air Jamaica' coincides with an interview I saw with Idris Jala, the managing director of Malaysia Airlines on CNBC.
A a concerned taxpayer, I need Air Jamaica to be a viable entity. Malaysia Airline has won top prize for the 'world's best cabin staff', five years consecutively, and it is also ranked at the top as a 'five-star airline'.
Idris Jala was formerly an executive with Shell and was involved in the turnaround of a few companies under the Shell Group.
As managing director, Shell Sri Lanka, he turned around the company that had lost money for 20 years.
As vice-president of retail marketing worldwide, he had to turn around loss-making retail (station) businesses across the globe.
Losing money
Managing director of Shell Middle Distillates Synthesis in Bintulu, Malaysia, he turned around this company in six months; it had been losing money for 10 consecutive years.
Before Jala joined Malaysia Airlines in 2005, the company was bleeding cash and was projected to lose RM1.7 billion (US$447.4 million) by the end of 2006.
On the first day Jala announced his business turnaround plan (BTP). With the support of the [COLOR=orange! important][COLOR=orange! important]board [COLOR=orange! important]of [/COLOR][COLOR=orange! important]directors[/COLOR][/COLOR][/COLOR] and the staff, the plan has been successfully implemented.
The result is that Malaysia Airlines recorded a profit of RM240 million (US$63.16 million) for the third quarter 2006, and fourth-quarter profit of RM121 million (US$31.84 million), all this when the airline would have been declared bankrupt by mid-April 2006.
The airline has seen "marked improvement in the areas of cost cutting and efficiency, yield and overall cost management - a must, considering the high [COLOR=orange! important][COLOR=orange! important]fuel [COLOR=orange! important]cost[/COLOR][/COLOR][/COLOR] and competitive environment."
As a result, the airline that was haemorrhaging has transformed itself into an operationally profitable entity in the short space of nine months.
Jala and his team implemented a route profitability project, which was used to improve revenue yield, and he set up regional labs and brainstormed the viability of regional business using a set of pre-fixed levers: price, sales and distribution, [COLOR=orange! important][COLOR=orange! important]network[/COLOR][/COLOR], schedule fleet and station cost. As a result, revenue increased by some RM973 million (US$256.05 million).
Please, Prime Minister Golding, Minister Wheby and Minister Shaw, have a talk with Iris Jala. Like the editor, I am not convinced that Air China is the answer to our problems.
I am, etc.,
MARK CLARKE
mark_clarke9@yahoo.com
Siloah, P.O., St Elizabeth Via Go-Jamaica
published: Wednesday | April 2, 2008
The Editor, Sir:
Your editorial 'Time to make the call on Air Jamaica' coincides with an interview I saw with Idris Jala, the managing director of Malaysia Airlines on CNBC.
A a concerned taxpayer, I need Air Jamaica to be a viable entity. Malaysia Airline has won top prize for the 'world's best cabin staff', five years consecutively, and it is also ranked at the top as a 'five-star airline'.
Idris Jala was formerly an executive with Shell and was involved in the turnaround of a few companies under the Shell Group.
As managing director, Shell Sri Lanka, he turned around the company that had lost money for 20 years.
As vice-president of retail marketing worldwide, he had to turn around loss-making retail (station) businesses across the globe.
Losing money
Managing director of Shell Middle Distillates Synthesis in Bintulu, Malaysia, he turned around this company in six months; it had been losing money for 10 consecutive years.
Before Jala joined Malaysia Airlines in 2005, the company was bleeding cash and was projected to lose RM1.7 billion (US$447.4 million) by the end of 2006.
On the first day Jala announced his business turnaround plan (BTP). With the support of the [COLOR=orange! important][COLOR=orange! important]board [COLOR=orange! important]of [/COLOR][COLOR=orange! important]directors[/COLOR][/COLOR][/COLOR] and the staff, the plan has been successfully implemented.
The result is that Malaysia Airlines recorded a profit of RM240 million (US$63.16 million) for the third quarter 2006, and fourth-quarter profit of RM121 million (US$31.84 million), all this when the airline would have been declared bankrupt by mid-April 2006.
The airline has seen "marked improvement in the areas of cost cutting and efficiency, yield and overall cost management - a must, considering the high [COLOR=orange! important][COLOR=orange! important]fuel [COLOR=orange! important]cost[/COLOR][/COLOR][/COLOR] and competitive environment."
As a result, the airline that was haemorrhaging has transformed itself into an operationally profitable entity in the short space of nine months.
Jala and his team implemented a route profitability project, which was used to improve revenue yield, and he set up regional labs and brainstormed the viability of regional business using a set of pre-fixed levers: price, sales and distribution, [COLOR=orange! important][COLOR=orange! important]network[/COLOR][/COLOR], schedule fleet and station cost. As a result, revenue increased by some RM973 million (US$256.05 million).
Please, Prime Minister Golding, Minister Wheby and Minister Shaw, have a talk with Iris Jala. Like the editor, I am not convinced that Air China is the answer to our problems.
I am, etc.,
MARK CLARKE
mark_clarke9@yahoo.com
Siloah, P.O., St Elizabeth Via Go-Jamaica
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