The answer should be in 1800 t

The answer should be in 1800 to 2000 words

Malaysian Airlines has been unprofitable since 2010. In addition, it suffered two air disasters in 2014, which adversely affected passengers’ volume and profitability. As a result, Malaysian Airlines, has failed to reach its BEP since 2010. In attempt, to turn the business around, a new chief executive director (CEO) has been looking for ways of boosting its profitability and lowering costs. The new CEO came up with the following drastic strategies:

  • Reducing workforce from 20,000 to 14,000
  • Reducing the number of flights and the size of the fleet
  • focusing on domestic and regional routes
  • stopping some long-haul, loss making routes, e.g. its only US route from Kula Lumpur to Los Angeles
  • Renegotiating some contracts, including some of those with airports

The new CEO believes that these steps are necessary to achieve break even and to save the business.

Required:

Using the information given above and the relevant literature in the subject area, what advise will you give the new CEO? Your advice should take into consideration the relationship between fixed costs, variable costs and profits together and underline the essential components to be considered by the CEO in making short term as well as long term decisions.

The answer should be in 1800 to 2000 words

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