Climbing Out... The 1980s
Air cargo continued to grow as a business throughout the 1980s, with the most significant expansion taking place across the Asia-Pacific region where newly industrialized nations joined the major league in trade. Air freight was described as "the fastest offshoot of the airline industry" and by the mid-80s, the International Civil Aviation Organization (ICAO) was forecasting that Asia Pacific would become the largest air cargo market by the end of the decade. In 1972, the region contributed only 7% of the world's air cargo traffic but by 1982, it had shot up to 22%. Malaysia was one of the emerging trading nations consistently posting double- digit growth rates in air freight, with MAS the major player for inbound and outbound air cargo in Malaysia. Other major airlines including several dedicated cargo carriers like US-based Flying Tigers and Lebanese-flagged Trans Mediterranean also sought to capture a slice of the lucrative Malaysian market. At one stage, this phenomenon alarmed the Government enough that it began calling for greater private sector involvement in air cargo to offset net freight and insurance payments in the billions of ringgit. During this period, MAS was always playing catch-up with its limited cargo capacity on flights and in particular, insufficient storage space at almost all airports. This was especially the case at the Kuala Lumpur International Airport in Subang where air cargo annual throughput had grown from just 2,400 tonnes in 1970 to 76,000 tonnes in 1980 and was exceeding 300,000 tonnes by the mid-80s. In response, MAS added or expanded new facilities at all the major airports. These included a 150,000 sq ft cargo complex with capacity to handle 160 million kg annually at Subang and a new facility for Penang. Additionally, warehouses in three other airports – Kota Kinabalu, Kuching and Senai - were expanded. In total, these measures created an extra 300,000 sq ft of cargo space at the five airports. To meet the demand for cargo uplift, MAS also set about to enlarge its fleet. The first B747s arrived in 1982 and by the late 1980s; the national carrier had purchased B747-400 Combis that could boost its international cargo capacity by as much as 30%. This was still insufficient for MAS to cope with the escalating demand, even despite several pacts with other airlines and cargo carriers to operate joint freighter services. By the late 1980s, MAS began casting its eyes at dedicated cargo services to popular destinations for Malaysian exports like Japan, Hong Kong and Europe. It was a natural and above all, logical progression for the airline since air freight revenue was approaching one fifth of MAS' total income. For instance, air cargo brought in RM220 million for the national carrier in 1988, a figure that was four times the amount at the start of the decade. At around the same time, MAS mapped out a strategy to take the business to a higher level. A strategy that was characterized by "wide cargo sales and efficient ground handling support." As the 80s was drawing to a close for the dawn of a new decade, the MAS cargo sales department was already looking ahead.