Selangor: Malaysia Aviation Group (MAG) has identified investment in its workforce, business diversification, and stakeholder collaboration as key strategies to strengthen its resilience against recurring crises in the aviation industry, stated its president and group chief executive officer, Capt Nasaruddin A. Bakar.
According to BERNAMA News Agency, Capt Nasaruddin highlighted that the aviation industry has faced more than 11 major crises over the past five decades, including geopolitical conflicts, fuel price shocks, pandemics, and supply chain disruptions. "There will always be another crisis. It's only a matter of time. The important thing is ensuring we are prepared to face it," he said during the Selangor Aerospace Forum.
MAG remains committed to investing in its 15,000 employees through training and skills development despite challenging market conditions. "We have never stopped investing in our people because they are our greatest asset," Nasaruddin emphasized.
He also noted that MAG has diversified beyond passenger operations by expanding its maintenance, repair, overhaul (MRO), cargo, and aviation services businesses to strengthen earnings. "Airline margins are very thin, averaging only about 1.4 per cent. That is why we have to grow other businesses that generate better returns," he explained.
Supply chain disruptions have had a significant impact, forcing Malaysia Airlines to cancel more than 10,000 flights in the fourth quarter of 2024, affecting over one million passengers. Additionally, rising geopolitical tensions have increased jet fuel prices, with every US$1 increase per barrel adding about RM51 million to MAG's annual fuel bill. "As an airline, fuel normally accounts for about 30 per cent of our cost structure. During the global supply crisis, it increased to almost 50 per cent, which is a huge impact for an industry where profit margins average only about 1.4 per cent," Nasaruddin shared.
To mitigate the impact, MAG has hedged about 36 per cent of its fuel requirements for 2026. Nasaruddin also stressed the importance of clear communication and close cooperation with stakeholders in managing crises. MAG regularly engages with employees while working closely with ministries, regulators, financial institutions, suppliers, aircraft manufacturers, and airline partners.
In his role as chair of the Association of Asia Pacific Airlines and a member of the International Air Transport Association board of governors, Nasaruddin noted that MAG collaborates with industry players to exchange information and coordinate responses to disruptions. "No single organisation can overcome a crisis alone. Success depends on collaboration between governments, regulators, airlines, suppliers, and industry partners," he concluded.