I applaud Datuk Idris Jala’s cost cutting measures at MAS. I applaud his efforts to innovate and increase the company’s revenues. I applaud his efforts in turning around the company. And I welcome changes to the way things are done at MAS.

BUT I have huge reservations to the latest initiative launched two days ago on the new airline fare structure. I understand the need for MAS to stay competitive. I understand that the 4 new airfare structures introduced by MAS is a covert method of more perfectly price discriminating passengers to increase total revenue. Theoretically, by charging 4 different prices for the same air route, MAS will be able to more perfectly exploit the different elasticity of demands for different passenger groups and hence increase revenue.

BUT this is what I have to say. The new airfare structure is simply TOO COMPLICATED AND COMPLEX for the average customer to understand. And this might work against MAS.

Four different price structures is a little too much for the average consumer to grapple with. There are just simply too many subtle differences in terms and conditions.

A few years back Celcom also experimented with this system for its prepaid customers. It launched 3 different plans for prepaid customers – Celcom Xcel, Xceed and Xplore. Theoretically it seems perfect. It offers value to different segments of consumers and tends to increase Celcom’s revenue. But I’m guessing the intended result did not follow the standard Econs/Biz manual. I do not have the data to support my point here, but I’m guessing that the program was not as successful as the management had planned. Celcom eventually merged its 3 prepaid plans into what is now known as Celcom Xpax.

So MAS, I would like to say the following to the management. Consider the SUBTLE INTRICACIES of offering so many options to customers. Maybe the more savvy ones will spend more time researching about your different plans. But will time-constrained consumers be willing to spend time understanding your 4 new structures? Or will they just give up and fly SIA or fly budget AirAsia?

Look, I’m not saying all is lost. There is pretty much nothing MAS can do since it has already launched the airfare to much fanfare 2 days ago. What MAS must do now is to engage in an aggressive marketing strategy to SIMPLIFY the structures.

I was reading newspaper reports on the 4 structures and they are very vague. Failure to do a good marketing strategy will simply result in disastrous losses.

I am seriously wondering why MAS is taking a budget approach towards airfares when it already has FireFly to service to budget segment. Look where SIA is going? It’s taking the luxury approach and is posting remarkable profits year after year. It stopped flying economy class to New York and now only flies business class there.

MAS, your cabin crew is one of the best in the world. Make full use of it. KNOW YOUR MARKET. Don’t be sucked into a futile competition with AirAsia. Both of you are competing in different market segments. And most importantly, don’t do a Qantas.