Can Malaysia Airlines regain solid footing?

National carrier Malaysia Airlines has suffered a series of major setbacks in the last couple of years, forcing the airline to institute both an extensive cost-cutting drive and an overhaul of its senior management to regain its footing. Increased competition from low-cost carriers such as Air Asia and Jetstar, soaring fuel costs and reports of mismanagement have been blamed for the airline's loss of RM1 billion (US$268 million) in 2005. In order to avoid further losses in 2006, the airline's new managing director, Idris Jala, has all but frozen marketing spend and is thought to be on the lookout for a new advertising agency partner. Idris was appointed in December to turn the company around after previous MD Ahmad Fuaad Dahlan left having served only one year in the job. Idris is expected to shortly present a five-year plan to help the company, which operates one of Southeast Asia's largest passenger aircraft fleets with about 100 aircraft, return to the black. One of Idris' first moves has been to sell the airline's new corporate headquarters, a 34-story building in Kuala Lumpur's prime real estate district, and relocate back to its previous HQ situated just outside the Malaysian capital. These financial losses also led to the resignation of the company's financial chief of 28 years, Lee Cho Teng, whose position was filled by an executive director at the airline. Malaysia Airlines is heavily supported by the Malaysian Government, which, through various state entities, owns up to 90 per cent of the airline. The airline's last major branding campaign, 'Going beyond expectations', was launched by its agency, Leo Burnett, almost three years ago and is now viewed by industry insiders as passé. A number of the airline's recent business and first class campaigns also ran into some controversy for depicting a Western man with a Malaysian woman. In light of the airline's management and financial problems, it has also been criticised for not being sufficiently tactical in its communications at a time when it needs a stronger promotional focus in order to get seats booked.