Malaysia Airlines Soars to Record-Breaking RASK
The values that define Malaysia Airlines—genuine, efficient, progressive—extend well beyond the brand. For Malaysia’s flag carrier, these words also reflect its continuous drive to deliver meaningful growth in a competitive market while providing exceptional travel experiences for its customers. PROS Revenue Management, the leading airline revenue management solution in the world, helps Malaysia Airlines cut through the complexity to capture market share and achieve record-breaking results.
Navigating Fierce Competition
Malaysia Airlines typically flies 40,000 guests daily to destinations around the globe. With a focus on Southeast Asia, it has opened more of Malaysia’s destinations than any other airline and has consistently earned numerous awards along the way. It is behind the scenes from Malaysia Airlines’ Kuala Lumpur base, however, where the best in revenue management science and technology are being used to take the airline’s performance to new heights.
“PROS has been a real differentiator for us,” says Izham Ismail, Group Chief Executive Officer for Malaysia Airlines. “The PROS solution helps us confidently forecast demand to achieve better capacity management.”
Intense competition among both low-cost and full-service carriers coupled with a generally price-sensitive population makes operating in this region particularly challenging. To outmaneuver these complexities and set a course for meaningful growth, Malaysia Airlines relies on PROS Revenue Management solution to deliver revenue-optimal offers in an ever-changing marketplace.
“We operate in a tough environment where yields are always pressing downward,” Izham says. “With the PROS solution, we have made remarkable improvements in our performance despite the challenges of overcapacity and notoriously thin margins.”
Simplifying Revenue Growth in a Complicated Network
Efficiently navigating hundreds of markets while maximizing revenue for every seat on every flight requires unimaginable precision. The PROS solution provides that level of control through groundbreaking algorithmic forecasting and proprietary network optimization science.
The PROS solution sorts through tremendous amounts of data, simplifying everyday decision-making and helps Malaysia Airlines’ team of 30 demand, flight, and pricing analysts deliver the best offers at any given point in time while minding relevant factors like competitors’ moves and shifting customer demand.
“Our analysts use the system every day to forecast current market trends and behaviors to more accurately predict what passengers want,” says Dersenish Aresandiran, Global Head of Revenue Management for Malaysia Airlines. “This helps us determine the fare mix that maximizes revenue lift on every departure.”
By automating processes like drilling down into market behavior and quickly adding influences, analysts have more free time to focus on other valuable activities. As a result, the team can work much faster and with deeper insight into its markets.
Focusing on Science and Best Practices
As a strategic partner, PROS works closely with Malaysia Airlines. In 2019, PROS and Malaysia Airlines’ revenue management leadership team helped the airline revamp and strengthen its revenue management practices, reversing negative yield performance in the process. This collaborative effort involved helping Malaysia Airlines fine-tune its forecasting accuracy, ensure the proper data was accessible, and improve revenue management best practices with the introduction of several new projects.
“We have greatly benefited from the outstanding support of the PROS team,” Dersenish says. “By adopting smarter demand forecasting and revenue management practices, we have stepped up our dynamic fare management with proper benchmarking, which has contributed to positive yield performance.”
It didn’t take long to see performance improvements. Within a matter of months, the airline was able to generate revenue in new ways through improved fare valuation, algorithmic forecasting, and network optimization. This partnership proved to be game-changing, contributing to record growth the following year.
“The enhancements we made with the help of PROS were clearly transformative for us,” Dersenish says. “We have improved many processes thanks to a stronger approach to revenue management.”
Achieving Record-Breaking Results
“The relationship we have with PROS is very collaborative,” Izham says. “Working with PROS, we now apply more science and best practices in our revenue management approach, which has delivered measurable improvements to yield performance.”
In 2019, Malaysia Airlines achieved an 8.7% passenger revenue increase and a 7% yield increase over 2018. Results for every quarter improved, with Q2, Q3, and Q4 showing the highest recorded revenue per available seat kilometer (RASK) increase of the past five years. Every region was up year-over-year despite a 4% increase in available seat kilometers (ASK) and continuous yield pressure in the market.
“With smarter, more agile growth strategies, we can stay highly competitive by dynamically creating offers based on real-time activity,” Dersenish says.
Building on this Success
Malaysia Airlines plans to launch PROS cloud-based RM Advantage system in 2020 and become one of the first airlines to migrate to PROS most advanced cloud-based RM solution.
“We look forward to working with PROS in the future as we continue to evolve and strengthen our strategies to meet passenger needs while attaining our growth goals,” Izham says.
In addition to the many benefits of a SaaS-based environment, like flexibility and lower cost of ownership, the solution will introduce additional capabilities such as willingness-to-pay, a unique forecasting technique only PROS provides. This will enable the airline to capitalize on true dynamic pricing, address different types of demand to minimize revenue dilution, and provide even greater insight into what customers desire.
With its long history of solving the everyday challenges airlines face in capturing demand and achieving revenue goals, PROS provides Malaysia Airlines with a solution it can trust. Putting some of the world’s most advanced science to work, PROS is helping Malaysia Airlines elevate its revenue management performance, take full control of its markets, and thrive in an ever-changing competitive landscape.