Editing Malaysia Airlines (section)

===1997–2005: Financial crisis===
[[File:9M-MRE Malaysia Airlines Boeing 777-2H6-ER (cn 28412-115) (6935014952).jpg|thumb|Malaysia Airlines [[Boeing 777]] at [[Los Angeles International Airport]]]]
Prior to the [[Asian financial crisis]] in 1997, the airline suffered losses of as much as RM260 million after earning a record-breaking RM333 million profit in the financial year 1996/1997.<ref name="Malaysia Airlines: The Marketing Challenge After MH17 and MH370">{{citation|date=2015|title=Malaysia Airlines: The Marketing Challenge After MH17 and MH370|url=https://lumsa.it/sites/default/files/UTENTI/u1708/Malaysia%20Airlines.pdf|work=Università di Roma LUMSA|access-date=2024-01-31}}</ref> The airline then introduced measures to bring it back to profitable. For the financial year 1999/2000, the airline cut its losses from RM700 million in  1998/1999 to RM259 million.

The airline plunged into further losses in the following years, however, amounting to RM417 million for the financial year 2000/2001 and RM836 million for the financial year 2001/2002.<ref name="Malaysia Airlines: The Marketing Challenge After MH17 and MH370"/> With these losses, the airline cut many unprofitable routes, such as [[Brussels]], [[Darwin, Northern Territory|Darwin]], [[Madrid]], [[Munich]], and [[Vancouver]]. The airline recovered from its losses the following year, achieving its then-highest profit, totalling RM461 million.<ref>{{Cite web|url=https://www.thestar.com.my/business/business-news/2003/02/26/mas-continues-recovery-with-rm330mil-q3-profit|title=MAS continues recovery with RM330mil Q3 profit|first=PAULINE S. C.|last=NG|website=The Star|date=26 February 2003 }}</ref>

In the same year, MAS proceeded with its order of 6 Airbus A380 aircraft to envision a solution for the slot constraints the airline faced with few European routes and to maximise its presence on the [[kangaroo route]].<ref>{{Cite web|url=http://edition.cnn.com/2003/BUSINESS/12/09/malaysia.airbus.reut/index.html|title=CNN.com - Malaysia to buy Airbus A380s - Dec. 9, 2003|website=CNN}}</ref>

In 2005, MAS suffered yet another period of unprofitability, reporting a loss of RM1.3 billion. Revenue for the financial period was up by 10.3% or RM826.9 million, compared to the same period for 2004, driven by a 10.2% growth in passenger traffic. International passenger revenue increased by RM457.6 million or 8.4%, to RM5.9 billion, while cargo revenue decreased by RM64.1 million or 4.2%, to RM1.5 billion. Costs increased by 28.8% or RM2.3 billion, amounting to a total of RM 10.3 billion, primarily due to escalating fuel prices. Other cost increases included staff costs, handling and [[landing fees]], aircraft maintenance and overhaul charges, widespread assets unbundling charges, and leases.<ref name="losses">{{cite web |url=http://www.malaysiaairlines.com/masapp/pdf/financial_info/quarterly/PressRelease_dec.pdf |title=Malaysia Airlines reports end of year losses. |publisher=Malaysia Airlines |access-date=23 March 2008}}{{dead link|date=May 2020|bot=medic}}{{cbignore|bot=medic}}</ref>
[[File:Malaysia Airlines Boeing 747-400 Hibiscus SYD Monty.jpg|thumb|Malaysia Airlines Boeing 747-400 Hibiscus Livery in Sydney, 2007]]
The Malaysian government then appointed [[Idris Jala]] as the new CEO of MAS on 1 December 2005, to execute changes in operations and corporate culture. Several weaknesses in airline operations were identified as the causes of the RM1.3 billion loss. The most substantial factor in the losses was [[Aviation fuel|fuel]] costs. For the period, the total fuel cost was RM3.5 billion, representing a 40.4% increase compared to the same period in 2004. Total fuel cost increases comprised RM977.8 million due to higher fuel prices and another RM157.6<ref name="losses"/> million due to additional consumption. In the third quarter, fuel costs were RM1.26 billion, compared to the RM1.01 billion in the corresponding period in 2004, resulting in a 24.6% increase or RM249.3 million.<ref name="losses"/>

Another factor for the losses was poor revenue management. MAS substantially lagged its peers on yield. Some of this gap was due to differences in traffic mix,<ref name="BTP1">{{cite web |url=http://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/corporate-info/Business%20Turnaround%20Plan%20(BTP%201).pdf |title=Malaysia Airlines Business Turnaround Plan |publisher=Malaysia Airlines |access-date=11 February 2011 |url-status=dead |archive-url=https://web.archive.org/web/20110714023818/http://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/corporate-info/Business%20Turnaround%20Plan%20%28BTP%201%29.pdf |archive-date=14 July 2011 }}</ref> with less business traffic to and from Malaysia than to and from Singapore, but much of it was due to weaknesses in pricing and revenue management, sales and distribution, brand presence in foreign markets, and alliance base. Moreover, MAS had one of the lowest labour costs per [[available seat miles|available seat kilometre]] (ASK) at US$0.41, compared to other airlines such as [[Cathay Pacific]] and [[Singapore Airlines]] at $0.59 and S$0.60,<ref name="BTP1"/> respectively. Despite low labour costs, however, the ratio of ASK revenue to this cost was, at 2.8, much lower than Singapore Airlines, where the ratio is 5.0, and slightly higher than [[Thai Airways]]<ref name="BTP1"/> Other factors were listed in the later-revealed business turnaround plan (BTP) of Malaysia Airlines, all leading to the net loss of RM1.3 billion in 2005.