FACULTY OF BUSINESS ADMINISTRATION

ANALYSIS OF TRANSPORT INDUSTRY

(TPT536)

ASSIGNMENT 2:

CASE STUDY OF TRANSPORT INDUSTRY IN MALAYSIA DURING COVID-19

PREPARED BY:

NURUL ADLIN LINA BINTI AZZAHAR

2019201158

PREPARED FOR:

MADAM MARHANI BINTI MOHAMED ANUAR

SUBMISSION DUE:

28 DECEMBER 202

CASE STUDY OF TRANSPORT INDUSTRY IN MALAYSIA 

DURING COVID-19 PANDEMIC

The World Health Organization (WHO) has decided that the outbreak of COVID-19
is a world pandemic as it has affected people around the world including our country,
Malaysia. Covid-19 is an infectious disease that is caused by a newly discovered novel
coronavirus. Coronavirus disease (COVID-19) causes respiratory illness with symptoms such
as cough, fever and difficulty in breathing. It takes time for the swab test before it comes out
with the results either positive or negative. This outbreak started from one region in China
which is Wuhan in December 2019. Throughout the outbreak, we can see that many changes
happened in the world’s economic branch. Dozens of countries also shut down their
economic operations such as factories, shops and forgetting the transportation sector.

Malaysia is currently fighting the third wave that occurred in Sabah from the Benteng
Lahad Datu (LD) cluster, cases from Tawau prison and the Sabah election that was held on
September 26. Ever since the election, there was an increasing number of the cases of people
that came back from Sabah.  The first wave of Covid-19 cases in Malaysia arose on January
25 coming from Chinese tourists that entered Malaysia through Johor. The second wave of
covid-19 cases started from February 27 involving a religious gathering called the Seri
Petaling cluster. This cluster recorded a total of 3,375 cases which were declared over on July
8. Precautions were taken by our government in order to fight against the pandemic. This
pandemic also affected the whole transportation industry around the country. Many
operations have changed to cooperate with the new SOP and policy. The Ministry of
Transport has issued the SOPs for the transportation and logistics sector earlier in May. 
FIRST WAVE

During the first wave, the pandemic covid-19 not yet affects the transport industry
because the cases reported can be said at a safe level where the recorded cases is 22 people
and no movement order yet during that time. Transportation sector still operated during that
time and nothing much happened and affected the industry because the MCO has not lifted
yet.

SECOND WAVE

Travel restrictions give the biggest impact towards every transport industry in
Malaysia. In the airlines industry, they have lost about RM13 billion just this year with a
RM10.9 billion loss in the Malaysia-based airline involving Malaysia Airlines Bhd, AirAsia
Group Bhd and Malindo Airways Sdn. Bhd. While Airport Operators, Malaysia Airlines
Holdings Bhd. (MAHB) and Senai Airport Terminal Services Sdn. Bhd lost another RM2.1
billion. Since the second wave occurred, 4.315 million of passengers around the country were
affected by the cancelled flight made by the three local carriers in Malaysia and 1.211 million
passengers have postponed their flights adhering to the government’s restriction order. This is
the reality that is faced by both parties, our citizens and the airlines industry. People need to
cancel everything that they have planned before and some of the passengers that made a
refund is actually worth RM399 million.

Malaysia Airlines offered unpaid leaves to over 13,000 of their employees because
their revenue plunged by 96 percent from 9.29 billion previously to RM118.86 and they also
have introduced a salary cut since the beginning of the MCO.  AirAsia has to bear with a new
breaking record net loss RM992.89 million in this second quarter of the year compared to the
same quarter last year which only RM17.34 million. In addition, AirAsia Group Bhd.
affiliate, AirAsia X Bhd, they recently declared that they must raise their money to restart
their operation. The retrenchment of 10 percent of their 24,000 employees has been
confirmed by the both companies. This problem really worries the airlines industry as they
believe that it will take between 12 to 10 months to recover. Market research and trend
analysis of this industry showed that people were hesitant to use the services until the end of
the year 2020. However, it still depends on the restriction made by the government. They
made changes from time to time so our citizens must be aware of the order. 
 After the increasing cases of the Seri Petaling cluster, the second wave has started and
the MCO has lifted. People were restricted to go out for work or non-essential business. They
got the order from the government to work from home and go out to buy only their necessary
needs. In the rail industry, people often use the train that links KL Central to the Kuala
Lumpur International Airport (KLIA) which is Express Rail Link (ERL) because it is the
easiest way for them to get there. As discussed in the previous paragraph, the airline industry
gets the biggest impact during this pandemic, so the rail industry also gets affected.
Passengers must cancel their trip including the tickets that they bought to ride ERL or
reschedule and decide for other trips. In order to adhere to the government implementation,
Express Rail Link Sdn Bhd has decided to suspend all its rail services during the Movement
Control Order period. Even after the MCO, they reduced their trips from 237 per day to 78 to
mitigate the spread of Covid-19 in public places. The operating hours for the operation of
passenger railway services such as KTMB (ETS, Intercity & Komuter) and Rapid Rail
(MRT, LRT, Monorail) also have changed from 5.00 a.m. to 12.00 midnight.

Other than that, the announcement was made by the Senior Minister of Defence on
March 23, public transport such buses like GoKL and Smart Selangor in this country will
only be allowed to operate during the fixed time from 6.00 a.m. to 10.00 p.m. and 5.00 p.m.
to 10.00 p.m. daily from March 25 while for taxi and e-hailing services, they can continue to
operate as usual following the guidelines given to them. For the private vehicles, there is no
prohibition for them to move but only to buy daily necessities. However, during the MCO
period we can see that the usage of vehicles is decreasing in line with the effects of the
pandemic except for courier services in our country such as Ninja Van, Jnt, Pos Laju and
many more. This is because the demand from online sellers increases drastically. People were
staying at home and bought everything online as they were encouraged to get their things
only to minimize interaction between people.

THIRD WAVE

In the third wave, our government started to loosen the Standard Operating Procedure
(SOP) created during this pandemic in order to help the transport industry in our country to
get back on the right track. For example, they open back the border between each state so that
our people who need to travel through airlines or buses can use the services and help them to
gain back their revenue. Ever since the border was open, our people did not miss the
opportunity to go back to their village and the traffic on the highway started to seem full of
the movement of vehicles.

MEASURES TO OVERCOME

One of the measures to overcome the problem in the airlines sector is by applying
bank loans in their operating countries as intended to ease their high cash flow. This is to
avoid the possibility of the carrier from shutting down and their employees will lose their
permanent job. As our government has opened the border and loosen the SOP, they need to
find ways to tackle and win their customers back to use their services by promoting with
different and attractive ways. They also must make sure that their customers’ safety is
protected during this pandemic so that people can put their trust to use their services.

Our government has introduced the 2020 Economic Stimulus Package to assist the
airline industry as much as other tourism-related industries in the form of waiver and
deferments of payments. For example, temporary deferment of monthly income tax
instalment payments for six months from April to September 2020 was granted for businesses
in the tourism sector. RM500 million is also allocated to provide a temporary 15 percent
discount on electricity bills for the same period to those in the tourism sector including
airlines through the stimulus packages.

Other than that, the company in the rail industry may reduce the cost for the daily
public transportation to attract more people to use back their services. Governments also must
play their roles to help the company by creating initiatives and provide funds for them to ease
their burden and improve their income back. Attract more customers to use rail services in
their daily life. For the courier services, they may hire more people to deliver the goods to the
customers so that they can encounter the endless parcels from the online sellers. This also can
help those people that has lost their job due to the Covid-19. This at least can improve their
financial to for living.
CONCLUSION

In conclusion, the pandemic Covid-19 clearly affect every industry in transportation

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Star. https://www.thestar.com.my/news/nation/2020/10/14/turning-the-tide-on-

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