Taking Off.. The 1970s
The early 1970s marked the take-off of the air cargo business in Malaysia and Southeast Asia. Then, industrialization was spreading throughout the region at a time when airfreight was emerging as a commercially viable option with the coming-of-age of several carriers like Malaysia Airlines System (MAS). Before this, sea freight was the normal mode of transport for goods while air cargo consisted mainly of mail, frozen foods and live animals. Increasingly over the decade, this was to change as Malaysian manufacturers relied on air transport to export their computer components, electronic goods and apparel while importing raw materials and consumables. Even before the split from Malaysia Singapore Airlines (MSA) in 1972, local freight operators had already begun to draw MAS' attention on how lucrative the air cargo business could be. They highlighted airfreight's selling point – faster delivery at lower operational costs means faster and greater profits. By the mid-1970s, the freight operators' campaign "Fly it rather than sail it" was in full swing, as were such innovations as containerization of air cargo. Soon, airfreight – previously thought of as 'incidental' revenue – was overtaking passenger sales in profitability. By now, it was clear to MAS as well as other regional airlines that they would be running at a loss without cargo revenue. In the five years since MAS started operating as a truly national airline, the volume of air cargo had grown six-fold whereas passenger load had merely doubled. Based on such figures, airline industry players predicted that future expansion of airlines would be linked more closely to cargo than passengers. Accordingly, MAS set out to develop the Subang International Airport as a regional transshipment centre for all international flights and the Senai Airport as an air cargo centre for Southeast Asia. It invested millions in upgrading its cargo handling capacity at several airports, constructing a master cargo complex at Subang and expanding facilities at Senai and Penang. The airline also added to its cargo handling staff, purchased new equipment and acquired a Boeing 737 cargo aircraft. Additionally, MAS announced plans to add two B-747 jumbo jets and six B-737s to its aircraft inventory by 1981. Another event in 1977 expedited MAS' growing focus on its air cargo business. The Government announced an RM800 million deficit in invisible trade, with the bulk of this being international freight charges and insurance premiums. By the late 1970s, MAS began using the title 'MAS Kargo' in referring to its air cargo division. The airline also unveiled plans for high cargo capacity, packaging assistance, skilled cargo handling staff and sophisticated equipment – all measures to take the air cargo business into the next decade.