Description
The chief executive officer of Malaysia Airlines (MAS) had the daunting task of sustaining a business that had suffered the tragic loss of two of its airliners in a span of just four months. Prior to this, a US$392 million loss, as well as the inability to compete with lower-cost carriers, had posed a great challenge to MAS. Management was planning to initiate a cost-cutting strategy to manage pricing and the competitive challenges of the aviation industry when these incidents shocked the world. The disasters greatly impacted customer confidence, as reflected in the company’s declining booking rates and stock prices. With its reputation severely damaged, MAS was faced with many hard-hitting questions from various stakeholders about the airline’s prospects. Many felt there was a need to transform the entire business model. The top executives pondered various options, including rebranding the airline, a new discounted pricing structure to build volume, a private equity infusion, a merger and filing for bankruptcy. Each option would have to be considered very carefully, as the changes made to the business would decide the future of MAS.
Learning Objective
This case offers students the opportunity to: ·Understand and make marketing decisions to retain and attract customers in crisis situations. ·Draft critical parameters for a restructuring exercise. ·Understand the concept of price-value tradeoff. ·Realize the importance of value communication.