According to data from Official Aviation Guide (OAG) Punctuality League in Mar 2019, Malaysia Airlines punctuality recorded 83.1%, higher than AA’s 80.4%.
Flight punctuality has always been one of the key metrics in measuring the performance of an airline. A flight that depart or arrive within 15 minutes of its scheduled time is categorized as On-Time. As an effort to provide an overview on the airline punctuality at global level, OAG has been collecting flight data around the world on a monthly basis to measure the On-Time Performance (OTP).
Of the 345 airlines evaluated in OAG’s database, it is shown that the top performers can achieve 96% of on-time performance, while the underperformers can go as low as ±20%. Taking a closer look at the airlines that originated from Malaysia, OAG had evaluated five airlines, namely Firefly, Malaysia Airlines, Air Asia, Air Asia X, and Malindo.
The OTP of Malaysia Airlines, Air Asia (AA) and Air Asia X have been gradually improving over the last two years at the Compound Annual Growth Rate (CAGR) of 4.7%, 2.5% and 1.1% respectively. On the other hand, Firefly and Malindo’s performance were both declining with Malindo dropping at a rate that is twice as fast as Firefly.
Despite being impacted by negative images of high CAPEX, low margin and low-cost competitors all around, Malaysia Airlines achieves the highest punctuality among the airlines in Malaysia at approximately 83.1% of the time. Although Malaysia Airlines’ punctuality outperforms AA, AA actually operates around 19,000 flights compared to Malaysia Airlines’ 12,000 flights in March 2019.
From a relative market share* perspective, AA is one of the most popular airlines in Malaysia. It takes up about 48.7% of the market share followed by M at 31.3%. while the remaining airlines take up roughly about ±20%.
Running an airline is different from running a usual business. The improper management of routes & schedule planning as well as manpower planning could cause disaster in the business. The massive capital expenditure and fixed assets are another concern in an airline business.
To survive in this highly competitive industry, one must have a well-strategized business plan which outlines the business strategy that leverages on its strengths to create an economic moat that will enhance the business sustainability in the long run. Strong organizational structure, viable business and operation process as well as innovative marketing strategy are few critical facets that an airline will need to be focused on.
*The relative market share is calculated based on the total number of flights the five selected airlines in March 2019 as published by OAG.
