MAS AIMS TO REDUCE OPERATING COSTS, SAYS MIDF RESEARCH

KUALA LUMPUR, Oct 7 (Bernama) -- Malaysia Airlines (MAS) aims to reduce its
operating costs to as low as 20 per cent over a low-cost carrier's cost base
over five years, according to MIDF Research.

"MAS would continue to implement cost control on redundant activities and
other unnecessary costs that had accumulated over time, weighing down its
profitability," it said in a research note Wednesday.

"MAS believes that at this level, it can charge 20 to 30 per cent above a
low-cost carrier's fare and consumers will snap at the bargain," said MIDF
Research.

Currently, the national carrier needed to charge 45 per cent more than the
average LCC in order to cover costs, MIDF Research said.

"In essence, MAS intends to improve revenue by convincing consumers to pay
30 per cent above a low-cost carrier's fares for a 5-Star Value Carrier," it
said.

MIDF Research said it did not expect further drastic reductions in operating
costs because MAS has maintained its goal of being a full-service carrier, which
necessarily incurred a high cost structure.

From 2006 to 2008, the airline trimmed operating costs by RM665 million
(US$1=RM3.4), RM738 million and RM936 million, respectively, it added.

-- BERNAMA