Activity # 8 Project Selection

Assuming that you are the originator of a business project from a company under the industry
assigned to you (see below), make a business project proposal using the following information
and explain your answer:
1.Name and nature of company
2.Project Name
3.Project Type
4.Availability of Funds
5.Decision Criteria

Air Malaysia Airlines Berhad (AMAB)

Nature of Company
Air Malaysia Airlines Berhad (AMAB), formerly known as Air Malaysian Airline System Berhad,
is a significant airline based out of Kuala Lumpur International Airport, Malaysia. While Kuching
and Kota Kinabalu have secondary airports, they serve a wide range of destinations in Asia,
Oceania, and Europe. Air Malaysia Airlines is one of the world's most well-known airlines and a
member of the One World Airlines Alliance. The tertiary cities are the emphasis of Air Malaysia
Airlines. Enrich Platinum and Enrich Gold, qualifying one-world and code-share partner
members, and Air Malaysia Airlines First, Business Class passenger’s Open drinks and catering
are available at the Golden Lounges. Qualified passengers enjoy full reciprocal rights in lounges
run by approved partners, and there are Golden Lounges all around the world to choose from.
Business centers, food catering, sleep rooms, and child-care centers are among the amenities
available at the lounge. There are three main types of cabins on Air Malaysia Airlines flights:
first class, business class, and economy.

Project Name
Purchased a New Aircraft

Project Type - Independent Project

Aircraft selection
Several potential fleet aircraft and manufacturing sources are being considered and evaluated,
including the following:
• Airbus Industry ATR72, A-300, A-310, A-320
• Boeing 717, 737-500, 737-700 • Bombardier Canadair Regional Jet CRJ
• British Aerospace BAe 146-300, BAe 146-200QC*, Avro RJ85, RJ100, RJX85, RJX100 •
Embraer ERJ-145 • Fokker 100 • Saab 2000
• Also, in an all-freighter configuration, the BAe 146-200QT** and BAe 146-300QT**

* QC = "Quiet Convertible" version allowing quick-conversion from passenger to full-freighter

configuration; only five of these - the complete production run - currently are in service worldwide.
** QT = "Quiet Trader" all freight versions, of which in service there are 13 in the 200 version and 10
in the 300 version. With the exception of the turboprops ATR72 and the Saab 2000, all aircraft under
consideration are pure jets.
Given the strong "jet preference" among the flying public (for instance, Continental Express in the
U.S. estimated that its load factors increased 33 - 50 percent when it switched from turboprops to jet
aircraft, and similar results have been documented elsewhere, including in Europe), the overall
greater speed and reliability, reasonably close operating costs (especially given the additional flights
that can be operated daily), and the longer range offered by jets, the preferred aircraft type is a pure
jet. It remains only to decide which is the "right" pure jet for the fleet.

A number of key factors have mitigated toward the BAe Avro RJ family of regional jets rising toward
the top of the list as the probable aircraft of choice for the new airline. Among those factors are the
following:

1. Relatively low per-seat acquisition cost.

2. Relatively low per-passenger-mile costs, given their added capacity over smaller regional jets, and
high reliability factors in the newer versions (for instance, Aegean/Cronus Airlines of Greece, which
operates six RJ100s on a very active daily schedule, has averaged above 99.6 percent departure
reliability with its RJ fleet).
3. Complete pilot and maintenance inter compatibility between the various members of the family
(RJ70, RJ85, RJ100, and now the new RJX family as well), giving added flexibility in flight and
maintenance operations and reducing training and simulator costs.
4. Four-engine configuration which gives it an added safety factor (while also increasing operating
costs, however).
5. Spacious, comfortable cabin interiors that offer the only seat, aisle, and overhead bin dimensions
available in a regional jet that are equivalent to those on standard-size jets.
6. The option of flexible cabin and seating configurations that allow for varying the number of seats
provided for various classes depending on demand, the number of seats abreast, types of seat
coverings, the number of seats provided on a given flight, and so forth.
7. Availability of the aircraft from various sources on both lease and purchase bases.
8. The possible option of obtaining advantageous British export financing.
9. Ability to service the aircraft in many locations on the projected service network and the availability
of major overhaul capabilities at the manufacturer's own facilities in the U.K.
10. Widespread passenger and industry acceptance of the Avro regional jets both within and outside
Europe.

Seating capacity is an important consideration both from the point-of-view of capacity, load factors,
and per-passenger-mile costs, but also from the point-of-view of "scope clauses" in pilot union
contracts.
In Europe, any airliner with 100 or more seats falls under the far more highly compensated
"mainline" airliner contracts in place in the industry. Planes with 99 and fewer seats are considered
"regional airliners" for contract and union purposes, carrying more economical compensation
packages.

On the lower end of the spectrum, market conditions make it very difficult to run profitable operations
in Europe with a 70-seat regional jet, which is considered suitable only for certain niche markets.
Consequently, the core of the regional-jet segment in Europe falls in the range of 85-100 seats and,
in fact, this segment comprises nearly half the airliners in use in Europe today. Either the
RJ85/RJX85 or RJ100/RJX100 series (or older BAe 146) fall squarely into this size segment.
Either the RJ85/RJX85 or RJ100/RJX100 (the fuselage and cabin configurations are the same for
both series, with the major change being in the more advanced and more powerful Honeywell
AS977 engineers on the RJX series) is able to offer seating up to 99 seats (the 100 can offer a
maximum of 112 seats configured with optional six-abreast seating), although the 85 series requires
six-abreast seating to reach the upper capacity limit.