Y.Bhg. Dato’ N. Sadasivan,
Deputy Chairman of Malaysia Airlines-Cum-Chairman of MASkargo,

Y.Bhg. Dato’ Sri Idris Jala
Managing Director, Malaysia Airlines,

YM Tengku Dato’ Azmil Zahruddin
Executive Director/Chief Financial Officer, Malaysia Airlines

Encik Shahari Sulaiman
Managing Director of MASkargo,

Distinguished Guests,

Ladies and Gentlemen,

Let me first thank Malaysia Airlines, especially its Cargo Division, MASkargo for inviting me to the Annual Megatonners Awards Presentation 2007. This is my first official function with MASkargo and I am very happy to be here.

The MASkargo Megatonners Awards is similar to the Oscars or Grammys whereby outstanding achievers in the record industry are awarded. In this case, MASkargo awards appointed freight forwarding agents, especially from the major domestic markets such as Kuala Lumpur, Penang, Johore, Sabah / Sarawak and Singapore who contributed significantly to the company’s performance throughout 2007.

I would also like to take this opportunity to congratulate MASkargo on being the host country for the biggest air cargo conference in the world, the International Air Cargo Forum & Exposition or ACF which will be held from 4 -6 November 2008.  I understand that this year’s conference would be the most participated ever since its inception 46 years ago. As of date, about 87% of the floor space for the exhibition has been sold out. I have great confidence that MASkargo will do a great job at playing host as Malaysia has excellent facilities and capabilities to hold an event of this magnitude.

This sort of network-related conference will not only have a direct impact on the country’s economy and trade but also boost Malaysia’s tourism industry. Malaysia is strategic in terms of location plus everything is affordable for all those coming from the Middle East, Europe, Australia, China and India. It serves as a good platform for everyone in the supply chain of logistics and cargo to mingle, network and discuss business.

Ladies and gentlemen,

This event also comes at the best of times as I would like to take this opportunity to congratulate MASkargo on being conferred ‘Preferred Carrier’ status by leading global logistics provider, DHL Global Forwarding and Schenker recently.

Not only that, MASkargo has also achieved the ISO 9001, ISO 14001 and OHSAS 18001 Certifications for Kuala Lumpur, Penang, Kota Kinabalu and Kuching.  On top of that, MASkargo recently also won the 2006/2007 Productivity Award under the open category for services by Malaysia Productivity Corporation (MPC).  The national cargo carrier was also awarded the ‘excellence in logistics for air cargo services’ by Techonology Business Review in October last year.

I was also told that MASkargo continued to maintain its position as one of the top three air cargo carriers in Asia, for the seventh consecutive year at the annual Air Freight and Supply Chain Awards or AFSCA in Singapore last month. As I know it is not easy to maintain such a reputation…so kudos to all of you!

Ladies and gentlemen,

The airfreight industry is facing such challenging times ahead. Spiraling fuel prices, reaching a fresh record over US$122 a barrel a few days ago, have resulted in the migration of cargo to sea, road or inter-modal modes.

The liberalization of the Asean market and depreciation of the US currency also pose a major threat to the freight business. Airlines are re-evaluating and redesigning their business models and route networks to get the most of this rapid change. Everyone is competing with each other to maximize their profits while reducing cost. Airlines are flying to routes which have high yield.

On the upturn, the ongoing liberalisation and globalisation efforts in the aviation sector have radically transformed the region, opening up economies, increasing international consumer demand and fuelling the growth of the air cargo industry.

Industry research indicates that the world air cargo traffic is expected to expand at an average annual growth of 6.1%, over the next two decades, from a rate of 5.1% as experienced during the period 1995 to 2005, trippling current traffic levels. This is good news for all of us as it shows that there will be more cargo movement in and out of the country.

In Malaysia, an efficient and comprehensive air transportation network has been developed to cater to the high passenger and cargo traffic demand. The Kuala Lumpur Internatonal Airport was voted the world’s best airport for the 3^rd consecutive year; while the well-equipped Advanced Cargo Centre (ACC) is able to handle 750,000 tonnes of cargo per annum.

Ladies & gentlemen,

Being in the transportation industry sometimes puts us on the spot as lately we have been hearing of issues relating to the environment. Talks of climate change are a norm in every conversation. Airlines are condemned for carbon emission into the sky which results in pollution and global warming. Even IATA has signed a commitment to tackle this issue. It stressed the need for airlines to come up with more initiatives when it comes to fuel efficiency and other efforts to project environmental responsibility.

In this regard, I am happy to learn that Malaysia Airlines has an environmental plan in place which looks into waste management, fuel efficiency, carbon emission, energy and water conservation and fleet planning issues. Even the new 737-800 and A380 aircrafts ordered are fuel efficient and environmentally friendly.

Ladies & gentlemen,

I am glad to note that under the management of its new Managing Director, Shahari Sulaiman, MASkargo managed to achieve a profit before tax of RM131 million in spite of various industry challenges. This is in line with the second phase of the business turnaround plan set by MAS.

I am confident with the strong support given by all forwarding agents, shippers, government agencies and MASkargo, the government’s strategy in providing an intergrated, efficient, cost-effective, technologically- advanced and safe transport system to facitlitate trade, promote socio-economic development, enhance multimodalism and assisting Malaysia in achieving its vision to be an industrialized nation by year 2020 will be a resounding success.

With that, enjoy the evening and thank you very much.