Malaysia Airlines will soon make a profit, but at what cost to the brand?


Peter Bellew the Chief Executive of Malaysia Airlines appeared chuffed to bits earlier this month when announcing the carrier had made its first monthly profit for a number of years in December 2016. I don’t want to appear pedantic but the former Chief Executive, Christoph Mueller announced last April that the carrier made its first monthly profit in February 2016 in this interview with Business Insider.

In the same interview, Mueller also said, “the airline’s products are “tired” and don’t appeal to young travelers.” Fast forward a year and the Nikkei Asian Review (NAR) is telling the industry, “Bellew’s efforts in improving the management and work culture, including at the baggage and maintenance departments, and a marketing strategy to attract Malaysians to fly on its planes again, has worked.”

Making a profit, but at what cost to the brand?
Making a profit, but at what cost to the brand?

In the article, Bellew is quoted as saying, “About a year ago, the company was flying Boeing 737 jets with only 5-10 passengers on board some flights. On Airbus A380 super jumbo flights to London in November 2015, some flights only carried 50 passengers.”

The article continues, “As of last May, the carrier was filling 45% of seats on its London flights. Last month, however, the figure reached 63%. Overall, the company filled 90% of seats in December and 82% in the last quarter, he said. That was up from the 79.3% reported for July-September. Business bookings are running at double year-ago levels.

What does this mean exactly? May is traditionally a slow month for the European routes whereas December is a peak month. I would suggest then that 45% in May is nothing to write home about but it is not terrible. But he says ‘last month’ which I presume is referring to December 2016 (the interview was in January 2017) the figure reached 63%. If that is referring to December then it is worrying.

Business class on Malaysia Airlines is not what it used to be
Business class on Malaysia Airlines is not what it used to be

But confusingly, the article then says the company filled 90% of seats in December which seems to contradict the initial statement. What we do know is that Bellew and Mueller have slashed operating costs to such an extent that Malaysia Airlines is now essentially a LCC, especially for domestic flights.

What I’ve noticed, and many others are also of the same opinion, is that its people do not have the communication skills required to engage effectively with passengers when there is a situation. Reasonable requests for explanations are met with a shrug or a mumbled reply.

When I flew business class recently and a fellow passenger’s phone repeatedly beeped during the approach, suggesting incoming messages which meant his phone was on when it shouldn’t be, the flight attendants did nothing. As I exited the plane I asked them why and they simply shrugged and moved to the galley.

There’s a reason why phones have an airplane setting. Sure, there are no proven examples of a phone causing a problem on an aircraft but I don’t want to be there when a phone does adversely affect the outcome of a flight and, bearing in mind the last couple of years, I don’t think Bellew would want it to be on his carrier.

Most recently, one popular blogger known as fourfeetnine had a terrible experience when travelling home for the holidays on Malaysia Airlines.

What bothered me so much about her experience was not that the flight was overbooked – this is Chinese New Year after all and these things happen – but how she was dealt with by Malaysia Airlines representatives at the airport. There appeared to be a complete lack of empathy for a young mother with a toddler and a baby, indifference to her predicament and no attempt to solve the problem in a way that may protect the brand.

And the irony is that this goes against what Malaysia Airlines is trying to sell through its new videos for Chinese New Year. The video closes with a flight attendant saying, “I would like to wish everyone a pleasant journey this Chinese New Year, see you on board!” Unless of course, in the case of Fourfeetnine and her family, you happen to be travelling home to Penang.

The blogger has taken her experience online and inevitably her story has gone viral. It’s had over 5,500 Likes on Facebook, thousands of shares and generated hundreds of comments, many of them also negative experiences about the carrier. This narrative will over shadow all corporate driven messages and make the job of getting bums on seats even harder.

In the past Malaysia Airlines was a product comparable to CX and SQ but today it is no better than a LCC. Crucially, consumers are beginning to treat it like a LCC. Once perceived as a LCC, Malaysia Airlines will get business based on price. But as soon as it tries to increase prices, it will be judged even more on the experiences of passengers like fourfeetnine and all the others with negative experiences shared across the ecosystem.

Malaysia Airlines really needs to start investing in the experience. From the clunky, outdated booking engine to the physical touchpoints it needs to be delivering on the promises it makes. Otherwise it’ll always be known as a Low Cost Carrier. And not a very good one.

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Even brand consultants are human


I wrote a blog post last week about how I was told I could not use the Malaysia Airlines lounge at KLIA if I wasn’t flying Malaysia Airlines. I also shared the post with a blog that I have a lot of time for and they responded with a very balanced article suggesting I was wrong.

In the post I wrote that gold and platinum members of the Malaysia Airlines FFP programme couldn’t use the lounge but someone also not flying Malaysia Airlines, who had never flown Malaysia Airlines and may never do so again, could enter the lounge if they paid RM200 (US$40).

I explained that this lack of appreciation for loyal customers did not make branding sense.

I was making the point that what other airlines do is irrelevant. That what is normal doesn’t matter because Malaysia Airlines isn’t any other airline going through normal. That Malaysia Airlines needs to work harder than any other airline to rebuild its brand following the twin tragedies of 2014 and that the first place it should start was with members of its frequent flyer programme but that it had largely ignored them.

Brands, especially airline brands are always looking for an edge. And they especially like to be seen to be human, to be caring, to be willing to do something extra. A colleague reminded me of what we call ‘thoughtful gestures’ branding. It’s happening more and more in the era of the long idea because thoughtful gestures have long legs on social media.

Think of all those airline ads that show the captain giving a kid a toy plane, a stewardess adjusting the blanket of a sleeping passenger, the offer to heat up a milk bottle for a baby, etc. All cliches and all used by Malaysia Airlines in its advertising in the past.

No frequent flyer, including me is entitled to anything that’s not in the terms and conditions but if they ask for something minor or simple, such as a free coffee or a pen or a postcard or want to use the bathroom in the lounge then although it’s against the rules, it would be a great opportunity for a “thoughtful gesture” that made an impression and more importantly, may then be discussed on social media and negate some of the negative narrative.

The mistake I made was that I personalized a minor issue and as a result, people focused on my behavior instead of the airline’s attitude.

I copped a lot of abuse and I won’t make that mistake again. Although I can promise you I’m not an unctuous twat and do not consider myself entitled!

A negative brand experience with Malaysia Airlines can be a lesson for all brands


Although this post is almost inevitably a branding lesson for Malaysia Airlines, it’s also a branding lesson for any company that doesn’t appreciate the importance of retaining customers.

At the risk of stating the obvious, customers are key to a brand’s success. After all, you can’t build a brand without customers although there are probably some advertising agencies that would dispute that.

Retention not aquisition should be at the heart of any Malaysia Airlines restructuring
Retention not aquisition should be at the heart of any Malaysia Airlines restructuring

Loyal customers are generally the most profitable of all. And as I wrote in my book, if you have enough loyal customers and look after them, you don’t need to spend the equivalent of the GDP of a small Scandinavian country on advertising to keep selling to new people.

Just think about it. If every customer you ever had came back over and over again and never left you, it would hardly matter how slowly the numbers built up. Fast or slow, your business would grow.

If every new customer became a convert for life, most of the risks would be taken out of running your business. Simply put, you’d be able to plan your sales and production, predict your cash flow, know when to open and when to close, recruit the right people at the right time and know exactly when to commit yourself to a new factory or, in the case of an airline, new aircraft.

Branding means looking after your customers. If you do, why would they leave?
Branding means looking after your customers. If you do, why would they leave?

In a situation like that, the only way is up. Unfortunately, though, it’s not going to happen. Customers don’t just come. Repeat business and customer retention rates are never going to be anywhere near 100 per cent in practice. Customers will leave too. But the absolute key to building a brand is getting more of them to stay.

And the reason why is because once they’ve become a customer presuming the experience from their perspective was a success, they are likely to come back again. According to one report, once a customer buys something, there’s a 70% chance of him coming back. And, once he’s back, he’s likely to stay.

repeat-customers-are-more-likely-to-convert

So how do you get more customers to stay? Obviously, by offering something that’s more attractive than the offer your competitors put up against it. Actually it’s easier than that because quite often a loyal customer will be oblivious to what the competition as to offer anyway.

But that’s not as easy today as it was 20 or even 10 years ago. There are companies out there who can manufacture what you manufacture more cheaply. There are companies out there who can get the same product as you to the market more quickly and in smaller or larger quantities than you.

Unless you are very lucky, there’s only really one advantage that you have over your competitors and that is your company’s relationship with your customers. That relationship, managed properly can never be duplicated.

And good relationships are the key to repeat business. Once Malaysia Airlines returns to profitability, and take it from me that it will do and ahead of target it will then need to start rebuilding it’s brand.

Customer experiences must be improved at Malaysia Airlines
Customer experiences must be improved at Malaysia Airlines

And if it really wants to rebuild its brand, and continue to make a profit once it starts to increase prices, which it will have to do, it must start to place relationships with existing and especially loyal customers at the heart of its turnaround strategy.

Malaysia Airlines must be prepared to invest in getting to know its customers by collecting the right data about them, developing relationships with them and then leveraging those relationships to generate higher sales and the referrals that will bring in more customers.

Malaysia Airlines must understand that building businesses today requires a relational, rather than a transactional, approach to doing business. This will be an almost 180 degree change in direction from the way it is managed at the moment.

The customer who is attracted to the airline because of a discounted fare but has no relationship with it will walk away the moment he sees the same thing cheaper somewhere else.

But customers who feel they are getting something out of the relationship, beyond the individual transaction, will stick around.

That ‘something’ the customer gains will depend on its ability to deliver emotional, economic and experiential value to every customer. And this is going to be hard because a lot of customers have now experienced the competition.

Branding isn't transactional, it's relational
Branding isn’t transactional, it’s relational

This is where branding gets complicated because it requires C level executives and senior management to refocus and move away from the ingrained, traditional ways of running a business. And for Malaysia Airlines it will mean tearing up the very strategy that got it back to profitability.

Most difficult of all, it means they have to give more responsibility to front line staff, many of whom they frankly don’t trust to do the right thing.

And much of that lack of trust is based on the fact that those management and C level executives see staff as a cost not an investment.

Even after the massive cull that has seen more than 6,000 workers retrenched, the carrier is staffed with people who simply don’t have the skills to represent the brand at this critical time.

But it’s also because whilst the ‘turnaround’ focus has been on slashing costs, the organization still suffers from a traditional, top down approach to managing the business.

A case in point is yet another depressingly familiar experience with Malaysia Airlines. As I’ve said many times before, I fly fifty times a year domestically with Malaysia Airlines and anything from two to ten times internationally. I’m not a major customer but I am a loyal one and continued to fly with them through the dark days of 2014.

If you are a regular reader of this blog, you will know how loyal I’ve been to Malaysia Airlines. You’ll know how I flew repeatedly following those 2 tragic events of 2014 and despite the fear and the mess the management and government made of engaging with the global media, family of those lost in the disasters and other stakeholders, I kept flying.

I don't expect to be treated like a VIP but I expect to be appreciated otherwise I'll take my business elsewhere
I don’t expect to be treated like a VIP but I expect to be appreciated otherwise I’ll take my business elsewhere

But like just about every other consumer, my loyalty shouldn’t be taken for granted. And if the quality of the product provided deteriorates and there is no attempt to reach out to me in a human way during that process, then it’s only logical that I’ll start to look for other suppliers. If those other suppliers deliver value to me, why would I go back?

Malaysia Airlines never reached out to me despite my loyalty. I wasn’t looking for much, perhaps an unexpected upgrade here, an invitation to use a lounge when travelling economy or perhaps some bonus miles as a gesture of appreciation.

Sure there were times when I picked up a few bargains during travel fairs but they weren’t personal and required me to invest hours of my time sitting in front of my computer waiting for the page to load.

Since 2014, the brand continued on its downward spiral to ignominy thanks to a ‘transformation plan’ that resembled the cast of a disaster movie as they stripped everything out of a plane in a desperate attempt to keep it in the air.

The quality of the product, the aircraft, the offering, the service, the ability of the brand to deliver value to me and on my terms degenerated to such an extent that I’ve finally started to cut the umbilical chord and over the last 12 months, I’ve booked me and/or my family on British Airways, Emirates, Singapore Airlines, Silk Air, Air Asia and most recently, Malindo.

All of the bookings are on routes served by Malaysia Airlines and only one of them because Malaysia Airlines was full on that sector.

Last week I was flying Malindo on a domestic sector that I always fly Malaysia Airlines. My Malindo experience wasn’t perfect (For the first time ever, my flight departure time was brought FORWARD which could have caused havoc with my work schedule) but my expectations weren’t high anyway.

Although I wasn’t even travelling on Malaysia Airlines, I still managed to have a negative experience with the carrier.

Let me explain. When I got to KLIA I thought I’d try to use the Malaysia Airlines business class lounge. After all I was flying business class and besides, I’m a gold member of their frequent flyer programme (FFP) and have been as long as they’ve had one.

In case you are unaware, the top two tiers of the Malaysia Airlines FFP are Platinum and Gold. To be a Platinum member you need 100,000 Elite Miles or 130 Elite Sectors.

A tale of two toiletry bags. Emirates offers a brand experience
A tale of two toiletry bags. Emirates offers a brand experience
Malaysia Airlines does what it has to do
Malaysia Airlines does what it has to do

To qualify for a Gold card which is what I have, you need 50,000 Elite Miles or 50 Elite Sectors. If I’m not mistaken, you get 2 elite sectors for each business class flight and one for each economy class flight. This means I’ve travelled at least 25 times in business or 50 times in economy.

My most common route is KL to Kuching so let’s say for the sake of argument that all of those sectors were KL to Kuching. The fare to Kuching is about RM1,000 for business class so at a minimum I’ve spent RM25,000 to get those 50 elite sectors. Not a lot but if you add it to the other fares it starts to add up. To become a Platinum member I’d need to spend about RM65,000.

When I got to the Malaysia Airlines lounge I asked if I could get a cup of coffee. Long story short, the receptionist said I couldn’t and nor could a Platinum member however, and here’s the kicker, anyone can access the lounge for RM200 (US$50).

As you can imagine, this wound me up. Royally. I support a brand through the most difficult period of its history and encourage others to do so but I can’t get a cup of coffee in the lounge.

However, someone who has never flown the airline before and may never do so, can drop RM200 at the door and sit in the lounge as long as he likes.

That simply doesn’t make branding sense. Whilst the motivation for doing this is obvious, isn’t it a bit shortsighted? It was the last straw and I wrote this in my business class seat on an Emirates flight to London.

Sitting next to me was my wife and in economy were two of our kids. We spent about RM30,000 (US$7,500) on this trip but would have spent it on Malaysia Airlines. During the trip to London we met up with a group of about 20 Malaysian all of whom, bar two had flown in on Emirates.

Now I’ve flown the ‘world’s best airline’ it’s going to pretty hard for Malaysia Airlines to win back my business. Even my wife who travels more than I do and is a true patriot and blindly loyal to Malaysia Airlines admits it’s going to be tough to go back.

You could argue that not allowing me to use the lounge for 10 minutes has cost the airline perhaps RM250,000 a year from my family. Every year for the next say 10 years. That’s RM2,500,000 of lost revenue.

Of the group we met, 2 travelled first class on Emirates, 10 travelled business class and the rest economy. How much has that cost Malaysia Airlines? And it doesn’t take into account anyone who reads this or listens to my rants offline. Was it worth losing all that business over RM200? Of course not.

So what should Malaysia Airlines have done?

When the latest turnaround plan was developed, instead of the Chairman announcing there was no need to rebrand, there should have been a strong commitment to the brand.

The Chairman doesn’t understand what constitutes a brand and what is required to build a brand. He probably assumed a rebrand was a new name or logo or positioning statement implemented with a global advertising campaign pushed out across all media for as long as the budget would allow.

Whilst Malaysia Airlines is restructuring it's brand is being sacrificed
Whilst Malaysia Airlines is restructuring it’s brand is being sacrificed

Someone on the restructuring task force should have been able to educate the rest of the team on what constitutes a brand and its importance during the turnaround process. As mentioned already, emphasis should have been placed on delivering value to customers and not simply slashing costs.

More responsibility should have been given to those staff on the front line who were interfacing with the few customers still travelling on the airline.

The FFP should have been revamped immediately with personalized communications, ongoing engagement through unique dialogues to build an ecosystem of supporters willing to discuss the brand positively.

A concerted effort should have been placed on creating positivity about the airline. A transparent approach to building a new narrative, openness and humility should have been the foundation for any communications, not poorly thought out advertising campaigns.

Instead, with no one guiding the brand, much of the narrative around Malaysia Airlines has been negative, related to the 6,000 plus personnel that have been laid off and the replacement of modern aircraft with old, worn out planes.

Pictures appeared online of masking tape used to fix breaks in the business class cabins of old 737s on routes that had normally been served by much newer aircraft.

Unlikely to inspire confidence in the Malaysia Airlines brand
Unlikely to inspire confidence in the Malaysia Airlines brand

IMG_4538

Discussions and complaints raged about the lack of alcohol on flights of less than 3 hours and then the departure of the CEO after only a year or so of a 3 year contract generated more negativity. More recently, the new CEO made headlines for his comments about charges at terminals one and two.

Non stop negativity surrounding Malaysia Airlines is destroying the brand
Non stop negativity surrounding Malaysia Airlines is destroying the brand

Now I expect a lot of people reading this will say I’m being petty and besides, the airline is right. They need to have rules in place and if the front line staff were given freedom to make such decisions, it would be open to abuse.

Others will say that few airlines will let travellers into a lounge if they are not flying with the airline and they are probably right although many of them would let a frequent flyer use the lounge. Bbut that’s not the point because unlike the Malaysia Airlines brand, the majority of these airlines don’t have a broken brand.

But most importantly of all, branding today is about small steps, it’s about the small things that matter to customers. There is no more ‘big idea’ or other traditional mass media solution that speaks to everyone in the same way.

If you want to restore a broken brand you need to focus on many, many little things to make sure the brand get’s fixed quickly. Move the narrative away from negativity to positivity, from mass communictions to personalized collaboration.

Emirates is a classic example of an airline that understands branding. It spends a phenomenal amount of money building its brand. Not just through communications but in the experience and relationships.

I flew from London to Kuala Lumpur via Dubai and both sectors were full, despite the fact that a week before an Emirates 777 had been involved in a crash in Dubai.

Despite suggestions of a deeper issue at DXB, Emirates investments in its brand meant it had plenty of equity in the bank. Crucially, this meant there was little negative news to write about the carrier following the crash.

The event and the fall out was managed effectively and efficiently. Fortunately other than one brave fireman, there were no fatalities and the international media had little interest in building a story around the crash.

That’s one of the many benefits of real branding. The equity you have comes in handy when you need it. A week after the crash, it’s business as usual at Emirates.

Compare that to Malaysia Airlines, two years after the twin tragedies. It’s still struggling and continues to slash prices and the quality of the product.

Malaysia Airlines will return to profitability thanks to labour cuts, more old aircraft, new supplier deals and low oil prices. But unless it learns some harsh branding lessons and starts to invest in its brand, it is unlikely to stay profitable for very long and will struggle when it begins to increase fares.

Malaysia Airlines and the Malaysia nation brand


Place branding is a generic term for all the elements of a nation or country brand, cities, states and regions and even destinations within those areas. In South East Asia alone there are more than 600,000 destinations competing for investment, talent and tourists. In an effort to match their destinations to stakeholder requirements for value, smart places are developing brands that investors, talent and tourists embrace.

Our company Fusionbrand is working on a brand for one state government in Malaysia and in the past have worked with other state governments, tourism boards, enterprise zones and the Malaysia Tourism Board. It’s always a privilege when we win a destination or place branding project because such projects have a major impact on society.

Many nation brands are victims of the politicians need for quick wins
Many nation brands are victims of the politician’s need for quick wins

The Place Brand Observer heard about our work and got in touch with me in February and suggested an interview. The Place Brand Observer is a fantastic resource for anyone responsible for branding nations, cities, states and regions, public diplomacy and reputation management.

The site features insights into the industry, interviews with experts in destination branding from around the world as well as tutorials and case studies of successful branding of countries, regions, cities and destinations. It’s a meeting place for the brains and the brawn of the place branding industry. If you are involved in place branding or simply want to know more about the industry, I strongly recommend you sign up for their excellent news feeds.

You can read the full interview here . I thought it was a really good interview and we discussed data driven branding, country brands, Malaysia airlines and the link between the legacy carrier and the country. I hope you find the time to comment, good or bad!

The new Malaysia Airlines brand is to be launched this month


We’re into December 2015 and this is an auspicious month. But it is not just auspicious because of the holidays, it will be remembered as the month Malaysia Airlines launched its new brand.

You only need to look at recent images of the Malaysia airlines CEO Christoph Mueller to see how stressful it is cutting 7,000 jobs from a bloated workforce, reducing the number of suppliers from 20,000, (yes 20,000) to an industry average of around 2,500, renegotiating sweetheart deals such as the one with the caterer and changing the focus of the carrier from a global one to a regional one.

The strain is evident on the face of Malaysia Airlines CEO Christoph Mueller
The strain is evident on the face of Malaysia Airlines CEO Christoph Mueller

But there is plenty of good news for Mr Mueller and the industry. Global passenger traffic is up 6% this year and long term, Airbus predicts the Asia Pacific region will lead the world in air traffic by 2034 with 41% of all passengers.

Meanwhile, aviation fuel, which accounts for anything from 40% to 55% of an airline’s operating cost is down more than 40% year on year. And as this saving doesn’t appear to have been passed onto passengers, Malaysia Airlines could make a profit earlier than the predicted 2018.

So with huge reductions in the cost of operations, improved efficiencies and a new brand, things are looking up for MAB. But the road to the new brand has been uneven. Reuters announced in late May 2015 that a new name, livery and rebrand would be unveiled in June 2015. This didn’t happen.

The company did change its name from Malaysia Airline System Bhd to Malaysia Airlines Bhd and this was reported by some quarters as a rebrand but it’s not. It’s actually the company’s fifth name change and besides, the company continues to be known as Malaysia Airlines.

In late July 2015, it was reported that M&C Saatchi had won a four-way pitch to ‘refresh’ the brand and was going to be working on the ‘refresh’ with Prophet, a predominantly US centric brand consultancy with a regional office in Hong Kong.

Only six months earlier, Lara Hussein the head of M&C Saatchi is reported to have said, “I don’t think re-branding is the answer. To change the name, image or logo would appear to be superficial and not trigger any change in perception.” She’s right of course, to change the name, image or logo would be superficial, but that’s not a rebrand.

Most recently, the CEO of Malaysia Airlines stated, “The entire brand needs a ‘refresh’ and will be like a start up with a new culture, values and ideas.” That’s more like it.

He also admitted that the airline had “fallen behind in the past three years and the rebrand would be much more than a new name and coat of paint”. He said the focus would be on ‘making the customer experience change’. OK, now we’re getting somewhere. All the talk of logos, image and refreshes was beginning to concern me.

Let's hope the new cabin upgrades include domestic business class
Let’s hope the new cabin upgrades include domestic business class

According to Mueller, from December 2015 the airline, “will begin installing new cabin seating and improving inflight entertainment, customer service and on time performance. New technology, lounge concepts and catering would be introduced and the uniforms may change.”

Now we’re cooking with gas and I’m excited because this is more like branding and these changes are long overdue. Some of the planes I’ve flown recently, from the B737-800 to the A380 have looked tired and the business class lounge at KLIA is more like a cafeteria.

He’s banking on the new product improvements to renew customer confidence and trust in the brand. But while these upgrades are important, it will take more than a new lounge, new seating and new equipment to revive the brand. After all, these changes will only bring the brand back up to speed with the rest of the industry.

The current snack offering to Malaysia Airlines business class passengers on the A380
The current snack offering to Malaysia Airlines business class passengers on the A380

Branding success in the aviation business comes with a number of small successes at key touch points in the customer journey. And these successes are built on delivering value on the customer’s terms.

Nowadays that journey begins not with an advertisement but with the customer discovering the brand, most often online or, in the case of the lucrative but undervalued existing customer during the relationship that the airline builds with the customer once they have finished their journey.

Emirates A380 business class. It's all about the experience
Emirates A380 business class. It’s all about the experience

At every step of the way, those experiences involve interactions with personnel that know how to represent the brand and deliver that value.

Having been a customer of Malaysia Airlines for over 21 years, and having flown nearly 100 times on the carrier since MH370 I can say, with some authority that the majority of staff don’t understand branding and the role each of them has in the success of the brand.

It’s not their fault because years of mismanagement have inculcated the ‘tidak apa’ (Don’t care) culture across the organisation. It’s not that the airline or its people are bad, it’s just that it has been driven into the ground in an attempt to milk it for every penny. And this has created a sense of every man for himself.

The mismanagement has created an organizational culture that lacks the required values. All of its processes, attitudes and systems have evolved to do the bare minimum required to get by. Recently, in an attempt to try and stem the hemorrhaging with the layoffs and supplier renegotiations, morale has hit rock bottom and the company is hanging even further over the precipice.

So will the rebrand make a difference? We’ll have to wait and see. My concern is that it is going to be advertising and promotion driven. A ‘big idea’ will be created and pushed out across the world in a massive advertising blitz that will make a big splash before being lost in all the noise.

We’ve seen this approach before and it doesn’t work. In an era when delivering value to customers has become the norm, Malaysia Airlines’ seems to be struggling to come to terms with the new branding order.

Numerous personal experiences, countless anecdotes and negative reviews, comments and discussions on and offline talk about the airline not caring or negative interactions with staff.

In an era when customers not companies define brands, and they define those brands based on the economic, experiential and emotional value those brands deliver to them, the rebranding of Malaysia Airlines will be successful only if the firm gets to know its customers and staff are primed to deliver consistent, knowledgeable, exceptional, personalised engagement with each of the very diverse audiences.

It maybe that Mr Mueller doesn’t want to go this route. That the investment will be too much and his ‘start up’ will be a glorified low cost carrier masquerading as a national carrier. The ramifications of such a move on the Malaysia Nation brand will be substantial and only negative. Let’s hope that’s not the plan.

I prefer to remain positive. Today is December 1st 2015. The country and the world is watching and waiting for the new brand. I hope they get it right. My next flight on Malaysia Airlines is on December 8th. I’ll let you know if anything has changed.

Is it right for Malaysia Airlines to be selling insurance?


I’ve written a lot on this blog about the Malaysia Airlines (MAS) brand and much of what I have written has been negative and I’ve come in for a fair amount of criticism as a result of those posts.

But my intentions are honourable and I do know that a lot of people in MAS read my blog and take my comments in the way that they are written, as feedback not criticism.

They don’t seem to take any notice of the feedback but at least they are reading my comments. I’m publishing this post to see if I can get an explanation for the email I received from the airline recently.

There’s no need for a recap on the MAS situation except to say that earlier this week a story broke in Australia suggesting the Malaysian government lied about MH370 and later today there will be a high level meeting between Malaysia, Australia and China the three countries leading the search for MH370. Speculation is rife that the search will be called off. If this is the case, the media will be full of stories about MH370 and the downing of MH17. Probably not the ideal time for Malaysia Airlines to be trying to sell insurance.

Does MAS send the right message by selling insurance?
Does MAS send the right message by selling insurance?

Yet earlier this week I received an email from MAS encouraging me to buy insurance for my upcoming flight to Tokyo. My reaction was one of surprise. My initial thoughts were that it didn’t make sense for the carrier to be trying to sell insurance so soon after the tragic events of last year and just before a major announcement that could see acres of negative newsprint around the world. It also made me even more nervous about flying MAS.

Professionally, I couldn’t help but think that this was an ad hoc tactical effort that wasn’t part of a well thought out and planned out strategy. If I’m right it would suggest the marketing and communications departments at MAS continue to churn out poorly conceived tactical initiatives and are yet to develop a sustainable brand strategy.

I think the airline would be better off trying to rebuild it’s reputation with me and all the other people that have continuously supported the airline through the dark days of 2014 and 2015. But I could be wrong, maybe this is the right time for the airline to be selling insurance, what do you think?

A real time example of what’s wrong with the Malaysia Airlines brand


This is the biggest weekend of the year in Malaysia as families across the country go home for the end of Ramadhan Eid holidays. As Monday and Tuesday are public holidays, many people will have a nine day break.

For me personally I’m looking forward to some quality time with my family in Sarawak, one of the best kept secrets in Asia. I’m flying business class to Kuching about an hour and forty minutes flying time from Kuala Lumpur.

When I get to the airport they tell me my flight is delayed. Now I’m a little bit annoyed by this because I’ve been a member of their FFP since it began and they have my email address and mobile number so they could have let me know the flight was delayed. But hey, that’s a minor issue and besides, if it’s a technical problem I’d prefer them to discover it on the ground and not in the air. Incidentally when I checked in, there was no apology from the girl at the desk.

MAS is carrying out renovations to its lounge at KLIA so I am directed to a temporary lounge. When I get to the lounge I show my boarding card to the person at the counter who looks at it and hands it back. There is no mention of flight announcements. The greeting isn’t rude but it’s hardly enthusiastic.

I sit down and get online. The lounge is quiet, I’m in a good mood, and considering I’m at an airport and about to get on an MAS flight I’m relaxed and excited at the prospect of spending some quality time with my family in a beautiful place.

30 minutes later I get to that point in an airport where you feel like you need reassurance that everything is alright. So I go to the counter and ask about my flight. I’m told it is delayed (like I didn’t know that) and the staff member points to a time on the boarding card and mumbles something incoherent.

I don’t know about you but when I’m at an airport there are so many distractions, so many unusual assaults on the senses that I rarely pay attention to announcements however, a little later, I suddenly look up and realize I haven’t heard an announcement about my flight or for that matter any others. I ask one of the MAS staff in the lounge what is happening with my flight. She goes to the desk and comes back and tells me my flight has left!

I’m stunned and ask someone to explain what just happened. The explanation revolves around the fact that it is a temporary lounge and they don’t make announcements and anyway, there is a sign on the desk stating that there won’t be any announcements.

Now bearing in mind getting passengers to the plane is a fairly important part of an airline’s responsibility, the sign below can hardly be described as adequate, especially with all the other messages on the desk.

The pathetic sign stating there will be no flight announcements
The pathetic sign stating there will be no flight announcements

Understandably I’m not impressed. This is business class, there aren’t many people waiting and it wouldn’t take much effort on the part of the staff to inform the few passengers in the lounge that their flight was boarding. Furthermore, if one business class passenger is late arriving at the departure gate, how much effort does it take for the staff at the gate to call the business class lounge and ask if the passenger is there? Aren’t these the little things that help passengers justify paying more for a ticket?

For some reason I’m then sent to the flight transfer counter where I listen to a staff member explain my situation to other staff members who all look like the last thing they want to be doing right now is deal with this issue. No one tells me anything. Eventually after interrupting the conversation I learn that my luggage has been sent to lost and found and I have to go and get it and not to worry, I will be put on the next flight.

I then go back to the lounge and 10 minutes later another member of staff tells me that I have to go and get my luggage because he doesn’t have the authority put it on the next flight which is odd because someone had the authority to take it off the previous aircraft and send it to lost and found but most galling of all, he tries to nickel and dime me for RM150 penalty to change to the 5.55pm flight!

He’s not very happy with the fact that I’m not very happy but obviously is just following a procedure and not interpreting the situation as it is. I realise he doesn’t have any authority so ask him to send a supervisor to talk to me. He walks off to the desk and sits down. 30 minutes later he is still there and making no effort to update me so I have to go and find out what is happening. He tells me the supervisor will be here in 10 minutes.

25 minutes later I get up again and go and ask him what is going on. He says the supervisor will be there soon. As we’re talking the supervisor arrives. She manages to talk to another supervisor who agrees not to charge me the RM150 penalty. It has taken me a lot of effort to get to this stage.

But it doesn’t get better just yet. It transpires that I wasn’t put on the 5.55pm flight, I was put on the waiting list because the flight was full. No one told me this. I asked what time is the next flight, answer 6.30pm but it is also full. The next flight after that with seats is 7.30pm. By the time I board that flight I will have been at the airport for six hours.

So how is related to the problems at MAS?

Throughout this horrendous experience I felt that on the whole, with the exception of a couple of members the staff were sympathetic to my predicament and wanted to help. But the problem is they just didn’t have the knowledge or the skills to deal with the situation effectively.

Being told repeatedly that the lounge is temporary and therefore there won’t be any announcements is not good enough but it isn’t the fault of the staff. It suggests the company doesn’t understand the importance of the customer. Especially highly profitable business class passengers.

It’s great that you are renovating the lounge but it doesn’t mean you lower your standards in a temporary lounge. It might be temporary to you but to every passenger, it is still the lounge. It’s not like I’m paying less for my ticket because I am using a temporary lounge. Does it mean that when you lease an aircraft from another airline you lower your engineering or safety standards?

And besides we’re talking about the worst time in the airlines history. Shouldn’t every customer willing to spend money with the airline at this difficult stage be appreciated more?

The attitude of the lounge staff was at best adequate. I got the feeling they were doing the job but nothing more. And having flown Malaysian Airlines for over 20 years I have to say I’ve felt this way for the last 12 – 15 years.

If the MAS brand is to survive, those that make the decisions on training have got to understand that the airline is not doing passengers a favour. Numerous reports released over the last 5 years point to service as being the main factor influencing consumer brand choices.

In every report I have read recently, the averages percentage of people who switch brands because of poor service is around 70% and goes as as high as 80%. It is universally accepted that customer service is critical to the success of a brand. That service comes from effective and timely training based on the changing needs of customers.

The issue is that what may have been considered acceptable customer service yesterday is no longer acceptable today. Moreover, as more and more companies raise the bar in terms of the quality of service they deliver, consumers expect more. Training needs to be updated and reinforced.

Nowadays, for an Asian carrier to thrive let alone survive, it has to have a culture not of customer service but of exceptional customer service. The ability to deliver exceptional customer service is the only way brands can build the loyalty that will differentiate themselves from other competitor brands.

Armed with the skills and tools needed to deliver exceptional customer service, staff will have the ability, confidence and enthusiasm to go the ‘extra mile’ when dealing with their customers.

Malaysia Airlines is a service product in a very competitive space. Despite the two very tragic incidents in the last 5 months numerous customers such as my family and I have stuck by them.

Right now it is tough being loyal to MAS and it isn’t made easier when they can’t even get the basics right. I, like many loyal customers don’t want any special treatment but I do expect a decent level of service.

As I write this, there is talk in the UK newspapers of a strategic review of MAS that may include renaming and rebranding the airline. I don’t know what they define as a rebrand but it’ll take more than a change of name to save MAS.

Malaysia Airlines needs to up its digital branding game


In 2012, online advertising spend breached the US$100 billion level for the first time. And forecasters are predicting double digit increases for the next couple of years.

But the types of ads are extensive, from pop-ups to banner ads, to text ads to display ads and so on. There is no consensus on what works the best and what doesn’t but studies suggest that interstitial ads (those that appear when you move from one page to another) animated ads and pop-up ads have the highest visibility, but have low click-through rates.

Whereas banner ads suffer from what the industry calls “banner blindness.” Which basically means that users have stopped seeing them.

According to one company in Australia, for every 1,000 people who see an online ad, only 1 will click on it and the average conversion rate for most sites is 2% which means that you require 50,000 people to see your online ad before you are likely to make a sale.

Another company, Digiday states that only 8% of Internet users account for 85% of clicks on banner ads and that 50% of clicks on mobile banner ads are a mistake.

But digital advertising will continue to grow especially as advertisers online can target their messages at the right segments, thanks to increasingly sophisticated technology. But with such low penetration, you need to get the content right so that when the 1 in 50,000 comes along, there is a good chance they will buy whatever it is you are selling.

I’ve had a go at Malaysia Airlines a few times and I’m probably not very popular with them which is a shame because I’m a big fan of the brand and in some areas, they are trying very hard to build a global brand. But I don’t believe the airline is demonstrating high levels of branding professionalism. Most recently I had a go at their latest advertising campaign. You can read that story here.

I’m sorry to say that I’m going to have another go at them. Earlier today I clicked on a link at the Malaysian Insider website and was interrupted by an interstitial ad for Malaysia Airlines. The ad (see below) featured an underwater image and an image of Penang. Obviously I was interested to see what they were doing so I clicked on the ad.

mas1

I was directed to the Malaysia Airlines site and was told it is under going system maintenance. Now I understand that sites need to be up dated all the time but not in the middle of a digital advertising campaign.

System update in the middle of a communications campaign? Not good for branding.

This type of schoolboy error can be fixed with a brand blueprint that is shared throughout the organisation and ensures the organisation works collaboratively, not in silos. Until they make such organisational improvements, Malaysia Airlines will continue to struggle. It really needs to up its branding game if it is serious about becoming profitable.