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Wednesday, May 21, 2008

Crisis management plan for Transmile

1.0 Background

Transmile Group Berhad started its operation in 1993. Transmile Group was listed on the Bursa Malaysia Securities Berhad (formerly known as Kuala Lumpur Stock Exchange) on 27 June 1997. The current chairman of the company is Tan Sri A. Razak Bin Ramli, who is also one of the boards of director for Hong Leong Tokio Marine Takaful Berhad (Dynaquest 2007, 307). The key strategic shareholders of TGB consist of Kuok’s Group, which is owned by the richest man in Malaysia with a majority of 19.6% shares, Pos Malaysia Bhd and Pos Malaysia & Services Holdings Bhd (PSH), which cooperatively hold about 17% of the shares (Leong and Joyce 2007).

The company’s business activities are providing air transportation and related services and lease of aircraft. Leasing out aircraft to clients are the primary business of the company, which consist of DHL Worldwide Express, United Parcel Service and Air Macau. Other than that, the company also involved in the provision of air freight, aircraft engineering and maintenance services (Transmile Group 2006). Due to the business nature, the company successfully acquired the “Third Freedom”, “Forth Freedom” and “Fifth Freedom” rights from the governments of various countries. These rights are also known as the company’s “secret weapon” (Dynaquest 2007, 307). These rights can greatly increase capacity utilization and efficiency. The “Fifth Freedom Rights” is also called as a connecting flight. It is the right to carry passengers from one's own country to a second country and from that country to a third country. An example of this could be Emirates Airlines flights originating in Dubai, then going on to Bangkok, and then from Bangkok to Sydney. Currently, the company comprises of three B737s, four MD-11 and nine B727 aircraft in its fleet (Transmile changes strategy to turn around 2008).

Over the years, the company has been doing some activities. One of the example is that the company helping the Tsunami victims which occurred in 2005 to airlift the donated supplies to the affected places. The company is transporting the supplies free of charge and it cost the company RM190, 000 for each return journey. Another example is that Transmile Group sponsoring a racing car for the Porsche Carrera Cup Asia Racing Series which is held during 2003 (Transmile n.d.).

2.0 Current Issue

In May 2007, Transmile shares saw a massive selldown following the company's announcement concerning the reliability of its unaudited consolidated results for the financial year ended 31 December 2006. Company's auditors are not able to satisfy themselves on the fairness or validity of certain transactions. Consequently, the company commissioned a special audit relating to the matter. The Securities Commission had charged three former executives of Transmile Bhd, including its founder, with giving misleading financial statements. The three are ex-chief financial officer Lo Chok Ping, ex-executive director Khiudin Mohd and founder Gan Boon Aun, who resigned as chief executive officer in June 2007. False statements and documents on revenue, property, plant and equipment and payments to third parties reported by Moores Rowland Risk Management Sdn Bhd in a special audit (Fong 2007). Transmile is foresee as a good long term prospect company but management cause serious losses to company. In future, this might scare off new and current shareholders and potential customers.

3.0 Situation Analysis



* Acquired “Third Freedom”, “Forth Freedom” and “Fifth Freedom” rights.

* International freight services, chartering, aircraft leasing and general freight services.

* Good records in the past (eg. Helping Tsunami victims by transporting the supplies free of charge.)

* New MD, Liu Tai Shin, members of the audit committee

* Management not working towards the benefits of the organization – unethical act of audit.

* More branches throughout Malaysia

* Internal collision after fraud case.

* Current customers might terminate contract.



* Cooperate with DHL, Worldwide Express, United Parcel Service (UPS), Pos Malaysia Berhad, Nationwide Express, Citylink, BaxGlobal and Nippon Express.

* Kuok Group, Pos Malaysia and Capital Group International as major shareholders.

* Serve the right booming economy at the right time. For example routes from Vietnam, China to consumer countries like North America and Europe

* Competing with other courier service provider. Eg. MASKargo

* Customers or shareholders lost their trust on the company.

* Increase in fuel price.

* There will be a possibility that the major shareholder might release their shares due to the fraud case.

* MASKargo recently securing a contract from DHL, Transmile may lose contracts from DHL.

4.0 Objective & Goals

4.1 Objective:

Ø To implement organization fairness and transparent in rebuilt investors, customers and employees trust and confidence.

4.2 Goals:

Ø Get investors to inject more capital into the company for working capital.

Ø Ensuring customers continue doing business in future without terminate current contract.

Ø Reducing the employee’s turnover rate in the organization which impact from the crisis.

5.0 Research

There are 3 phase for our research method. The first phase shows how the analyzing of the situation takes place and the gather all the information into a report. By doing so the situation can be analyze in a more in depth manner. Determining the key target public is the most important part of the research. We can create any strategy and tactics but without knowing to whom we want to channel does plan to, is just pointless. SWOT (strength, weaknesses, opportunity and threats) analysis will be conducted in order to see if the current mission and goals meet the current strategies, is the company on the right track, do they need any modification. After doing the SWOT analysis then we can create or set objectives and goals that we will achieved with our public relation plan.

The second phase is more about the development of strategic plan. This phase is where all the information from the phase first being properly analyzes so that it can be used to tailor to our strategic plan. Information is broad; we have to carefully select the information that can be use. After the all the information has been gathered, brainstorming of ideas for creating an action plan will take place. Brainstorming is conducted so that ideas can be thrown around and everyone has the right to give or voice out their opinion.

The third phase is the implementation of the strategic plan. This phase will be the phase that the entire strategic plan that had been developed in the second phase is implemented. Appointment of crisis communications team will be the first activity in this phase. It is because the crisis needs to be handle as fast as possible. Then spoke person for Transmile will be appointed. The person would be the communication manager of the company. The reason we choose this person is because as the communication manager, he or she has already establish relationship with the clients, employee and investors. Therefore the confidence and trustworthiness is already there. The key audience will be communicated with the communication channel by using communication channel the key audience will be well informed. We will be using the two-way symmetric models. It is a two ways and balanced communication. Suggestion of after crisis will be the last activity. This suggestion will be used for the planning after the crisis has passed.

6.0 Key Target Publics

6.1 Investors:

It is essential for Transmile to focus on investors as well as its current shareholder wealth because they are the main source of capital for Transmile to do business. Without capital, it is difficult for Transmile undertake and provide service for customers. The crisis had an enormous impact on Transmile as investors started to be more cautious and suspicious of information provided by the company which covered in news, reports, and financial statements. Thus, it shows that investors had loss confidence on the company.

This group was targeted through mass media actions for instance television, prospectus, newspapers, campaign and website. In addition, there will be an annual dinner for investors to show appreciation in their confidence in investing in Transmile.

6.2 Key Accounts:

Customers are where revenue is generated and also company depends on for survival. Without revenue, company does not exist and therefore Transmile needs to protect from customers terminate the current contracts because customers had distrust, lost integrity, and doubt about Transmile’s ability to deliver the services.

It was recommended that corporate visit communication with customers will be an effective way to show Transmile’s genuinely sincere communication. Furthermore, followed by updating customers on Transmile situation thru email and fax. Campaign are organized to help customers increase sales will be provided. There will be an annual dinner for customers whereby to show gratitude for not terminate the contracts.

6.3 Employees:

One of the important key public is employees, it is them who made Transmile to operate and run the company services. When such crisis occurs, employees had the mind set of the company might goes bankrupts this will effect employee’s work ethic has decreased and not motivated consequently increase turnover rate.

Any recent information or changes in policy, employees will be reaching out through email as well as monthly staff meeting where senior managers or CEO to have a dialogue and discuss to solves employee’s problems.

7.0 Communication Strategy

Since the crisis occur suddenly hence, to overcome the crisis it is necessary to act fast, frequent and transparent to the target audiences to minimize further damages on Transmile. The vast media channels to reach out with the audiences create an opportunity where information can be perceived promptly. Moreover, the communications with the key target audiences have to be done repeatedly, this to ensure the information is received and also it adopt the concept of “two-way symmetric” where is the ideal way of communication enlighten by Grunig and Hunt. This because it can achive mutual understanding between Transmile and the target public where every information is transparent. It is believed to be a win-win solution where both parties will obtain benefits from the strategy (Johnston and Zawawi 54).

To begin with, Transmile need to appoint executives to form a crisis communications team who will be call on in time to make decisions and determine policy. Appoint PR manager as primary contact between the team and the public. Then, appoint a deputy to serve as the backup for the primary. The team must inform employees, especially top and middle managers, about the crisis procedures by meeting and email to ensure everyone acknowledged. Additionally, it is also a task to select the appropriate spokesperson to represent Transmile on giving out information and answering inquiry by audiences. Apart from that, creating press materials to communicate and response the crisis to all key audiences ensure it is done successfully (Johnston and Zawawi 321).

The features of communication strategy consist of:

7.1 Investors:

As Transmile is currently is under the spotlight of media due to sharply fall in share price, it is expected investors would keen to know about Transmile current situation. Subsequently, crisis management team needs to gather reliable information and to be question by media.

By sending out prospectus for investors to make sure investors are aware of Transmile current situation. Thus, will made them feels that Transmile current management is concerning to restructure there management. Feedback or question will be asked by investors if there is any doubt thru email or fax.

Any finding or updates will be published as soon as possible to reach to the audiences via television, newspapers as well as Transmile’s website under investor’s relation.

Campaign in KLCC will indirectly help to boost investors attention on Transmile as this will let public interested in update themselves on company current situation. This can slowly but surely building trust and confidence of investors towards Transmile.

An annual dinner will be held especially for Transmile’s investors to show appreciation in placing confidence on company new management to restructure the management and it’s business.

7.2 Key Account:

Corporate visit will increase the communication along with relationship between Transmile and its existing customers in return by hoping customers will still believe and confidence that Transmile can deliver it’s services. However, regular updates via email or fax should be made to notify customers on any changes in policy or situation regarding on Transmile.

By making a huge campaign venue campaign which offer customers such as DHL, United Parcel Service, Pos Malaysia and etc to place their booths in promote their service will in return benefits Transmile as these customers are using Tramsile services.

To show gratitude for customers not terminate the contract, annual dinner will be held to capture customer’s hearts subsequently will tie the relationship with customers when doing business in future.

7.3 Employees:

Some employees tend to be more indirect in communication with their manager, thus email will be the best way in getting employees dilemma.

Meanwhile, some problem is inefficient to solve by using email, thus CEO or managing director should have a dialogue and discuss with employees by held meeting once a month. By this way, if employees identify any error occur such as the crisis happened, action will be taken immediately to avoid same mistake repeated.

After the crisis has passed, compile a post-crisis summary report. It should include the cause of the crisis; ensure broad media coverage; the strategies in the crisis communication process; ways to implement those changes and explain changes in Transmile policy and procedures. By clearly stating the information in detailed, ultimately public will have the perception that the crisis is cause by former management but not Transmile.

8.0 Implementation

q The first steps is try to gather the important facts, quickly evaluate the situation, and prepare to respond to key audiences in an open and honest manner.

q Top management is advised to take necessary actions to quickly resolve the situation without jeopardizing the integrity of Transmile, employee, and customers.

q It is important to be transparent and disclosed the situation to investors and publics by television and newspapers in Malay, English. Chinese and Indian language for two weeks time frame.

q Investors will receive prospectus from their mail box within three weeks.

q Major campaigns where customers can be place their booths to promote their services kick off from May 24, 2008. Ensure publics aware that Transmile sponsor for the campaign.

q Marketing managers will be sent to for corporate visit to explain Transmile situation and confirm to key account that the company is capable to deliver its services

q Employees will have meeting with CEO or Managing Director once a month.

q Web page will be design and start to lunch within one month which will be maintained frequently.

q Transmile will undertake a major rebranding as a step to reintroduce its new image which takes about one month in design new logo and change of collateral example such as letter head and name card.

q Annual dinner for investors will be held in the second quarter of years followed by dinner for customers.

q When short-term threat solved, Transmile had to start rebuild the goodwill over the long term.

9.0 Materials

Media Campaign:

¨ Media releases

¨ Newspapers

¨ Webpage

¨ Television

¨ Campaign in KLCC

Communication documents used for corporate visit:

¨ Reliable fact about Transmile

¨ Communication strategy

Internal communication documents used for employee discussion:

¨ Communication strategy

¨ Communication policy

¨ Reliable fact about Transmile

¨ Frequently asked questions document

Direct mail (and also Transmile’s website):

¨ Prospectus

¨ Reliable fact about Transmile

¨ Frequently asked questions document

10.0 Budget


Implementation Date


Television Advertisement (2 weeks)


production cost

RM 50,000.00

air time cost

RM 75,000.00

Newspaper (Print advertisement) bussiness page (2 weeks)


Advert design

RM 5,000.00

Purchase advertisement page for 4 news paper (malay, english. Chinese and indian language

RM 100,000.00

Prospectus Catalogue (for investors)


Booklet Design (3 weeks)

RM 5,000.00


RM 10,000.00

Campaign (Joint with marketing department) (2 to 3 months)


Venue (KLCC)

RM 30,000.00

Event management includes:

RM 350,000.00


RM 9,000.00

Audio Visual

RM 15,000.00

Corporate Visit (for 5 major key account)



RM 20,000.00


RM 10,000.00

Food and Beverages

RM 3,000.00

Staff Communication (1 year)


Monthly Staff Meeting

RM 1,000.00

Web Page (1 month)



RM 1,500.00


RM 5,000.00

Maintanence (per month)

RM 150.00

Branding (Joint with Marketing department) (2 to 3 months)


Rebrand Transmile (below the line design):

RM 100,000.00

Logo design

Design cost

Change of collateral example: letter head and name card

Annual Investors Dinner for the Second quarter of the year



Venue, Food and Beverages and Service

RM 37,500.00

Annual Customers Dinner for the Second quarter of the year



Venue, Food and Beverages and Service

RM 37,500.00


RM 864,650.00

11.0 Result

By spending RM864, 650.00 will greatly overcome the crisis issue within 3 years. After take into consideration of the account, it is identified that there will be no problem for Transmile to folk out this sum of money to compensate the crisis and to achieve the objective.

It is expected that Transmile will be able to continue and operate their business as usual after the goals are meet. Firstly, Transmile share price expected to regain. Secondly, Customers will continue in dealing business and revenue is expected to grow after second years. Thirdly, employee’s turnover rate will reduce.

12.0 Evaluation Process

Evaluation determines the effectiveness of our strategies. Will our strategy achieved the objective and goals. The evaluation are seen by 3 parts; investors, customers and employees. The way we evaluate the effectiveness of our public relation plan is by looking at the changes in investors, customers and employees perception towards the company.

When investors confident towards Transmile have been regaining, they would pump in capital for Transmile to use for their operation. Therefore the company value will increase. Investor’s activity will be monitored to ensure that they have enough information about the company.

Revenue is generated by selling the service to customers. Confident of customers must rise up so that they would trust to use Transmile service. Therefore when the revenue stops from dropping down and starts to increase, it shows that our public relation plan is effective.

In our public relation plan, employees are one of our key public. They are the heartbeat our Transmile. Our public relation plan is effective when employee turnover rate is reduced. At a crisis like this employees tend to jump ship. It is their natural habit to run when a company is in trouble.