Chronology of MASkargo

TAKING OFF.. 1970s


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.

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.

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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.

...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.

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The issue took on further urgency when the International Air Transport Association (IATA) predicted in 1991 that the Malaysian air cargo industry would register the highest growth rate in the world for the first half of the decade.

...With the conversion, MAS's air cargo revenue shot up to almost RM1 billion by 1995, a huge 87% increase over the previous year and catapulted the national carrier into the ranks of the world's top 20 freight carriers.

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By the turn of the new millennium, MASkargo was well established as a major player in air freight and over the next few years it was to enhance its standing to become one of Asia's top three cargo carriers.

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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.

1970s Milestones

April 3:
Malaysian Government registers Malaysia Airlines Bhd (MAL) as the company to operate the country's national airline in preparation for the split from Malaysia Singapore Airlines (MSA).
Nov 23:
The new airline is now known as Malaysia Airlines System (MAS).
Sept 12:
Cargo handlers urge MAS to introduce cargo flights between East Malaysia and Singapore, claiming commercial flights do not provide sufficient cargo space. They feel freighter services would grow into a "lucrative business".

MSA was then operating a dedicated air cargo service on that route with two Fokker Friendships carrying 9,000kg each week.
Sept 30:
MSA concludes operations.
Oct 1:
MAS takes off as an independent airline. Its inventory totals 19 aircraft including seven Boeing 737s, nine Fokker Friendships and three Britten Norman Islanders
The air freight business starts to come alive three months after the launch of MAS. With the volume of air cargo increasing by 15% monthly, MAS records more than 350,000kg of inbound and outbound freight this month.

The typical inbound cargo includes motor vehicle spare parts, machinery, clothing, frozen foods, pharmaceuticals and even day-old chicks. Outbound cargo mostly comprises batik, oil palm seeds, cocoa, assembled electronic components and the odd live monkeys.
March 30:
America's Trans World Airlines (TWA) links up with MAS in Hong Kong and Taipeh to provide an air freight service between the US and Southeast Asia.
April 1:
MAS launches flight service to Hong Kong. The MAS cargo office is then handling cargo for 13 other major international carriers at the Subang International Airport.
A new cargo complex is completed, adding another 10,000 sq ft of floor space to the 3,700 sq ft at the existing warehouse.
The volume of cargo passing through Subang exceeds 10 million kg, a four-fold increase from 1970.

Malaysia is among only a few countries to register growth in air cargo at a time when almost all others are experiencing a slump.
MAS begins expanding its staff strength including cargo handlers from 60 to 90 personnel.
MAS acquires new loading machinery as an increasing number of forwarding agents begin to set up base in Kuala Lumpur.
June 10:
MAS announces construction of new 85,000 sq ft cargo complex at Subang to begin in early 1976. It is scheduled for completion in 1977 to cope with the rapid increase in air freight.
Nov 4:
The first MAS Boeing 737 cargo aircraft arrives in Malaysia. It carries a cargo capacity of 12 tonnes.
Nov 16:
MAS launches dedicated cargo flight between Kuala Lumpur and East Malaysia. The Boeing 737 flies twice a week to Kuching and Kota Kinabalu.
Air cargo posts a phenomenal growth rate of 40% over the previous year.

MAS cargo revenue expands by 26% to reach RM33 million – 12% of total MAS revenue.
Jan 16:
The New Straits Times makes reference to 'MAS Kargo' in a story on the booming air cargo business. This is perhaps the first time any distinction is made between MAS and its sideline operations.
Aug 17:
Luxembourg-based all cargo carrier, Cargolux International announces plans to establish Kuala Lumpur as transhipment centre for air freight between Europe, Southeast Asia and Australia.

This is a major boost to the MAS air cargo business.
Sept 27:
MAS announces growth of air cargo revenue for the financial year ended March 1977 to RM40.5 million. Total cargo lifted reaches 32.5 million kg, an increase in excess of 20% over the previous year.
Nov 1:
MAS launches cargo service to Sabah for delivery of goods to Tawau and Sandakan.
Sept 29:
The volume of air cargo handled by MAS continues to register double-digit growth. Total tonnage exceeds 35,000 tonnes.
Oct 8:
The Federal Government approves an allocation of RM43 million to upgrade the Senai Airport in Johor to turn it into a regional air cargo transportation hub.
Oct 16:
MAS introduces a new security system at the warehouse in Subang to prevent escalating theft of cargo.
Feb 21:
MAS loses RM6 million in cargo earnings due to a general strike affecting the entire national carrier.
April 15:
The number of cargo handling staff at Subang tops 150 to cope with the workload as MAS now handles cargo for 21 major airlines.
April 13:
MAS floats a proposal to incorporate a subsidiary company to handle ground services including air cargo handling.
Sept 11:
MAS announces it will introduce a computerised information system in January 1980 to speed up quick retrieval of air cargo. The system enables MAS cargo handlers to track consignments.

This is part of measures to modernise and upgrade its booming air cargo operations.

MAS will be the first in the region to introduce such a round-the-clock computerised system.
Sept 18:
Total air freight exceeds 40 tonnes, another 15% increase over the previous year.

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.

1980s Milestones

March 14:
MAS announces tie-up with US-based Flying Tigers, one of the world's largest air freighting companies.

Under the joint venture agreement, the Flying Tigers will operate two B-747 flights weekly between the US and Malaysia from July while MAS will handle ground services and the local market.

Sept 8:
Air freight operators complain to the Malaysian Government that the inadequate facilities at Subang are unable to cope with the average 40 shipments per day.
Sept 10:
Responding to the complaint, MAS offers the Customs & Excise Department at Subang a 6,000 sq ft area to clear the growing log-jam of air cargo consignments.
July 1:
MAS concludes purchase of two Boeing 747s to be delivered in May 1982. This is also a boon to MAS Kargo in efforts to cope with the rapid growth of air cargo.
July 11:
Bank Negara announces that freight charges by 1985 could reach RM4 – 5 billion due to escalating trade with countries like Japan.
July 26:
MAS announces a stop to air freighting live swine.
Aug 29:
International air cargo comprises almost two thirds of MAS's air freight. MAS considers scheduled cargo flights to international destinations.
MAS sets up a subsidiary company to provide a nationwide air cargo trucking service.
Feb 17:
The Department of Civil Aviation (DCA) announces that work will start in mid-1983 on a new multi-million ringgit air cargo warehouse at the Bayan Lepas International Airport in Penang.
Feb 26:
MAS releases forecast that total volume of air cargo for the financial year ending March 31 will reach 52,000 tonnes.
Nov 21:
The number of freight forwarders with offices at Subang reaches 16, four times the number for 1974.

The New Straits Times publishes a story on the new 150,000 sq ft MAS cargo complex, which is scheduled for completion in 1985.

The complex will be able to handle an annual capacity of 160 million kg with enough space for cargo from four jumbo freighters at any one time.

Aug 2:
The Government announces plans for a new cargo complex in Penang. It floats the idea that the complex may be operated by the private sector.
March 30:
Revenue from air cargo hits the 20%-mark of total MAS revenue.

MAS predicts this figure will rise dramatically once the upgrades and expansion of warehouses at five airports are completed.

May 23:
The International Civil Aviation Organisation (ICAO) forecast that Asia-Pacific would be the largest air cargo market by 1992. Currently, the region accounts for 25% of air cargo volume.
Sept 20:
MAS sets up subsidiary company Pengangkutan Kargo Udara MAS Sdn Bhd to provide bonded trucking services.

Air cargo now brings in RM120 million, a significant jump from the RM50 million for 1980.

Sept 27:
Penang suggests an air cargo link between the island and the west coast of Canada.
Oct 26:
The Flying Tigers, which operates two weekly cargo flights between the US and Malaysia, requests for a third flight to meet the rising volume of air freight.
Dec 5:
The Government announces plans to build an 'air cargo village' at Subang.
April 30:
Bank Negara reports that net freight and insurance payments has exceeded RM2.27 billion. In response, the Government calls on greater private sector participation in the air cargo business.
Aug 13:
MAS opens its first-ever mechanised cargo warehouse at Petagas in Kota Kinabalu.
MAS is privatised by the Government and goes public with listing on the Kuala Lumpur Stock Exchange (KLSE).
March 1:
The new cargo complex at Subang begins operations with a capacity to handle 300,000 tonnes of cargo annually.
May 3:
MAS forecast that air cargo revenue will reach RM167 million for the 1986/87 financial year with the introduction of B-747 flights to Los Angeles, Tokyo, and Europe in July.
Nov 2:
The New Straits Times publishes a story ranking Subang's MASGO – a computerised cargo reservation, information and documentation system – as the most advanced in the region.
March 19:
MAS reports yet another year of positive growth for its air cargo business, with revenue surpassing RM220 million for the 1987/88 financial year.
May 19:
MAS announces plans to introduce two Boeing 747-400 Combis to its fleet.

This would increase its international cargo capacity by 30% and help boost cargo revenue past the RM400 million-mark by 1989.

Sept 22:
MAS releases news for the construction of an ultra-modern cargo terminal at Penang. Work is expected to commence in 1989 with completion the following year.

The terminal will be equipped with an elevated transfer vehicle (ETV).

Oct 19:
The number of air cargo staff at Subang now totals 365 personnel.
July 15:
MAS proposes that Penang's air cargo complex be designated as a Free Trade Zone (FTZ), a first for Southeast Asia.
Aug 21:
MAS' cargo revenue is forecast to reach RM266 million for the financial year 1989/90.
Sept 15:
MAS reveals that it could soon start operating dedicated freight services to international destinations.

Leveling Off... The 1990s

The cargo division of MAS entered the 1990s faced with many of the same constraints from the previous decade as the air freight business continued to expand at breakneck pace. MAS was put under considerable pressure from the Government and the nation's industries to provide adequate cargo space for their growing exports. The issue took on further urgency when the International Air Transport Association (IATA) predicted in 1991 that the Malaysian air cargo industry would register the highest growth rate in the world for the first half of the decade. The national carrier's dilemma was simple. It had limited landing rights for most international destinations and could only schedule full freighter services by correspondingly reducing passenger or combi flights. While negotiating for more traffic rights worldwide, MAS responded to the situation by tying up with other airlines and cargo carriers to operate joint freighter services. They included Air France, US-based World Airways, Dutch carrier KLM, Richard Branson's Virgin Atlantic Airways and Srilankan Airlines. Finally in September 1991, MAS launched its first international all-cargo service to Dubai and Amsterdam with an MD-11. Despite a temporary halt a year later, this proved to be the vanguard of MASkargo's full freighter flights in the years to come. These later flights were undertaken by B747-200Fs, which were originally passenger aircraft converted into freighters. With the conversion, MAS's air cargo revenue shot up to almost RM1 billion by 1995, a huge 87% increase over the previous year and catapulted the national carrier into the ranks of the world's top 20 freight carriers. Even so, this only represented 35% of total air freight business in Malaysia. There was still plenty of room for MAS to grow and greater emphasis continued to shift to air cargo operations. By now, the air freight business was independently operated by MASkargo Sdn Bhd, which had been incorporated as a wholly-owned subsidiary of MAS in 1994. During the mid-90s, the persistent shortfall of cargo space at Subang was given little attention given the impending move to the new Kuala Lumpur International Airport at Sepang. When the national carrier shifted operations to KLIA in 1998, MASkargo could easily handle up to 650,000 tonnes a year at its ultra modern and handsomely equipped Advanced Cargo Centre (ACC). Unfortunately, the opening of the new airport came in the wake of the Asian Financial Crisis that deflated almost every regional economy for the rest of the decade. The Malaysian economy, however, started to come around by mid-1999 and this was reflected by the recovery of MASkargo's business for the year. MAS closed the decade on a high with the announcement that it would venture into total logistics operations with MASkargo extending its services to include land transport to complement its air operations. For the airline industry, this was an unprecedented development. It set the stage for MASkargo to welcome the new decade with renewed confidence.

1990s Milestones

March 19:
MAS announces that work on the RM26 million cargo complex in Penang will start by year-end with completion in mid-1992.
March 21:
The national carrier forecast cargo business to grow by an average 20% annually with a 25% growth rate for international routes.
April 10:
MAS reveals it will add a first-ever full freighter aircraft to its fleet by 1993 to meet the projected increase in air cargo traffic.
July 2:
The introduction of a B747-400 to the fleet increases MAS' cargo capacity by 50%.
Jan 27:
MAS sets up a committee to monitor passenger and cargo loads in view of the drop in global air travel due to the impending Gulf War. MAS reschedules any flight if load falls below 50%.
March 5:
The Cabinet directs MAS to look into setting up a separate freighter service with operations that can be independent of passenger flights.
March 14:
The Penang Government calls on MAS to expand cargo services following a 40% increase in airfreight between the northern state and Europe.
Sept 2:
MAS reveals it intends to convert one of its B747-200 passenger aircraft into a freighter to meet the demand for cargo space.
Sept 15:
MAS launches its international all-cargo service with a DC-10 freighter making an inaugural flight to Dubai and Amsterdam.
Oct 4:
A study by the International Air Transport Association (IATA) shows that Malaysia's air cargo industry is expected to achieve the highest growth rate in the world.
Jan 8:
MAS announces it will add a full-freighter B747-200F in September and four more by 1995. The first all-cargo Boeing will fly to Japan, the Gulf States, Europe and the US with cargo of up to 100 tonnes.

The airline also releases news that it will expand the cargo terminals at Subang and Penang.

Jun 19:
Officials from MAS and Air France – the second largest international air freight carrier – hold talks to finalise joint air cargo services.
March 31:
The Transport Ministry reveals the Government may allow more foreign airfreight companies to operate out of Malaysia to cope with the escalating demand for air cargo space.
July 5:
The Royal Customs & Excise Department signs a contract to computerise its facilities at the MAS Cargo Complex in Subang.
The Airfreight Forwarders Association of Malaysia (AFAM) writes several letters to MAS calling for greater security at the MAS Cargo Complex in Subang.
March 19:
A reporting team from local afternoon daily, The Malay Mail, enters the MAS Cargo Complex unimpeded, kicking off a public furore about security.
March 31:
Deputy Prime Minister Ghafar Baba orders security at the MAS Cargo Complex to be beefed up in response to the Malay Mail 'expose'.
April 22:
MAS announces it will replace its B747-200 with the larger B747-300 to fly its full freighter service for domestic routes following a 13% annual increase on local air cargo traffic.
June 9:
MAS becomes the second Asian carrier to be linked to the Spectrum service of electronic data interchange operator Cargo Community Network (CCN). The service provides data on cargo movement to subscribers.
Sept 1:
The MAS Cargo Complex in Subang is hit by a second heist of gold bars in just four months, once more revealing glaring weaknesses in security.
June 15:
MAS signs a pact with Malaysian Helicopter Service and its associate World Airways (WA) to lease cargo space on WA freighters and to provide ground-handling services to the US-based cargo carrier.
June 16:
MAS announces it will introduce a leased (McDonnell Douglas) MD-11 freighter to increase its airfreight capacity to Europe and the US. Air cargo to Europe is then flown on five B747-400 Combis and in the belly of a B747-400 passenger jet to US.
July 19:
MAS restarts its scheduled all-cargo flights to Amsterdam after a one-year suspension of service. The MD-11 freighter will ply the Amsterdam-Dubai-Kuala Lumpur-Penang-Taipeh-Anchorage-Los Angeles route.
Oct 17:
Cargo revenue for the year exceeds RM500 million.
Oct 24:
MASkargo Sdn Bhd is incorporated as wholly-owned subsidiary of MAS.
Dec 19:
MASkargo upgrades its cargo handling system with barcode readers and front-end intelligent workstations to provide customers with up-to-date information on cargo consignments.
Jan 6:
MASkargo stops bulk-breaking - or splitting bulk cargo into smaller parcels - at its cargo complex in Subang to ease congestion. Freight forwarders are told they would have to do it themselves.
Jan 20:
MASkargo implements a new system using a master airwaybill to release and transfer cargo to the Sungaiway Inland Clearance Depot. This move greatly reduces congestion at the cargo centre.
April 7:
MAS and Dutch national carrier KLM sign an MoU for two additional cargo flights each between Kuala Lumpur and Amsterdam.

Kuala Lumpur is KLM's springboard to the Far East while Amsterdam is MAS' conduit to Europe.

May 23:
Cargo revenue for the year is forecast to grow by 87% to reach almost RM1 billion following the imminent conversion of two B747-200 passenger jets into full freighters.
June 1:
MAS forecast it will handle in excess of 350,000 tonnes of cargo this year.
Sept 15:
MAS reveals a budget of RM1.3 billion for facilities at the new airport in Sepang including RM400 million for cargo operations.
Oct 17:
MASkargo commissions first B747-200 special freighter. This development is set to move MAS inside the top 20 freight carriers in the world.
Nov 22:
TNT Express Worldwide Malaysia sets up a warehouse and distribution centre at the MAS cargo complex in Subang.
Jan 6:
MASkargo extends its freighter service to 3 new destinations – Adelaide, Melbourne and Frankfurt.
Jan 30:
A MAS B747-200 flies 94 horses from Buenos Aires to Kuala Lumpur, the largest transport of thoroughbreds by the national carrier.
May 7:
MAS announces it will build an RM400 million cargo centre at the new Kuala Lumpur International Airport in Sepang to boost the country's aspiration to become a major cargo hub for the region.
May 10:
Ministry of Finance approves the Penang Government application for a commercial free zone at the MAS cargo complex in Bayan Lepas. The airport is the first in the country to have such a facility.
June 20:
MASkargo launches a direct freighter service between Penang and Europe, making Bayan Lepas the second hub international hub for cargo services in Malaysia.
Sept 18:
MAS and Richard Branson's Virgin Atlantic Airways say they will launch a joint freighter service between London and Osaka/Melbourne via Kuala Lumpur to cater to growing air cargo traffic between Europe and Asia-Pacific.
Dec 11:
MAS releases news that the new KLIA's Advanced Cargo Centre (ACC) will offer a capacity of 650,000 tonnes per annum when it opens in April 1998.
Jan 21:
The Senai Airport makes final preparations to open a Free Trade Zone with a capacity to handle 100,000 tonnes of cargo annually.
June 24:
MASkargo makes the first of its three major moves to Sepang.
June 30:
The Kuala Lumpur International Airport opens with MASkargo based at the RM299 million Advanced Cargo Centre.
Dec 18:
MASkargo operates as full freighters two B747s, two B737s and one MD-11.
April 17:
MASkargo's revenue exceeds 20% of total MAS revenue for the first time.
April 24:
MAS announces it will venture into total logistics operations through MASkargo, which will also offering ground transportation of goods. This is unprecedented in the airline industry.
July 1:
MASkargo sets a new benchmark at its ACC in Sepang which ensures that freight forwarders obtain their cargo within six hours of arrival.
July 8:
MASkargo computerises its Material Handling System.
Aug 4:
MAS and Srilankan Airlines sign code-sharing agreement for passenger and cargo services.