Pegged at RM40 million, the business is about half what it was worth in the early '90s, say sources, pointing to the airline's battle to contain costs amid mounting losses.
Having forecast a further RM1.2 billion loss for 2006, sources say the carrier has also frozen new marketing spend in recent months -- which is expected to deter some agencies from entering the pitch. However a number of shops are likely to be invited, including TBWA, M&C Saatchi and Astana. It remains unclear whether incumbents Leo Burnett and Starcom, whose contract runs out in June, will defend the business.
The pitch has reportedly been instigated by the state-controlled airline's new managing director, Idris Jala, who was brought on board last December after previous MD Ahmad Fuaad Dahlan left the position after only a year. Idris has been tasked with bringing the airline out of the red, following increased competition from low-cost carriers and spiralling fuel prices. Sources believe MAS is looking for a new partner after long-term agency Leo Burnett lost several key staff last year, including the creative duo of ECDs Alex Lim and Chan Lee Shon, and Sue D'Cruz, head of Arc, Burnett's interactive arm.
"Recent MAS business and first class ads are a creative director's dream," said a source. "However, an airline in that kind of shape needs much more practical, promotional, price-sensitive advertising without the fluff.
"To some extent, the incumbent agency is also being used as a scapegoat. It is not an easy position to be in."
In a bid to drive down costs, MAS is considering selling off some of its assets, including its Kuala Lumpur HQ. It has also tripled the passenger fuel surcharge on tickets.