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Malaysia Airlines PART1

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Malaysia Airlines System (MAS) Sistem Penerbangan Malaysia





1 May 1947 (65 years ago)(asMalayan Airways)

Commenced operations

1 October 1972 (40 years ago)


Kuala Lumpur International Airport

Secondary hubs

Kota Kinabalu International Airport Kuching International Airport

Frequent-flyer program

Enrich Grads

Airport lounge Alliance Fleet size Destinations Company slogan

Golden Lounge Oneworld[1] 91 61 exl. code-share and subsidiaries Journeys Are Made by the People You Travel With

Parent company

Penerbangan Malaysia Berhad (Government

Holding Company) Headquarters Sultan Abdul Aziz Shah Airport Subang, Selangor, Malaysia Key people Tan Sri Md Nor Yusof (Chairman) Ahmad Jauhari Yahya (Managing Director) Mohd. Rashdan Mohd. Yusof (Resign) [2] Revenue Net income Website MYR 13.654 billion (2011) MYR$ -2.524 billion (2011) www.malaysiaairlines.com

Malaysian Airline System Berhad (MYX: 3786), doing business as Malaysia Airlines (abbreviated MAS), is the flag carrier of Malaysia. Malaysia Airlines operates flights from its home base, Kuala Lumpur International Airport and with a secondary hub at Kota Kinabalu and Kuching. The airline has its headquarters on the grounds of Sultan Abdul Aziz Shah Airport inSubang, Selangor, in Greater Kuala Lumpur. Malaysia Airlines operates flights in Southeast Asia, East Asia, South Asia, Middle East and on the Kangaroo Route between Europe and Australasia. It operates transpacific flights from Kuala Lumpur to Los Angeles, via Tokyo. Apart from the airline the group also includes aircraft maintenance, repair and overhaul (MRO), [3] and aircraft handling. Malaysia Airlines has two airline subsidiaries: Firefly and MASwings. Firefly operates scheduled flights from its two home bases Penang International Airport and Subang International Airport. The airline focuses on tertiary cities. MASwings focuses on inter-Borneo flights. Malaysia Airlines has a freighter fleet operated by MASKargo, which manages freighter flights and aircraft cargo-hold capacity for all Malaysia Airlines' passenger flights. MASCharter is another subsidiary of Malaysia Airlines, operating charter flights using Malaysia Airlines' aircraft. After recovering from past losses, Malaysia Airlines is keen on merger and acquisition (M&A) activities: particularly airlines in the Asia Pacific region.[4] Malaysia Airlines was ranked second with score 88 in Aviation Week's Top Performing Companies which measures financial viability of an airline.[5]

1 History

1.1 Malayan Aviation History

o o o o o o o o

1.2 Beginnings 1.3 Incorporation 1.4 Expansion 1.5 First period of unprofitability 1.6 Second period of unprofitability 1.7 Recovery from unprofitability 1.8 Third unprofitability 1.9 Business Turnaround Plan

2 Corporate information

o o o o

2.1 Head office 2.2 Subsidiaries 2.3 Financial highlights 2.4 Branding

2.4.1 Corporate image

o o Malaysia Airlines cabin staff

2.4.2 Corporate logo

2.5 Alliance 2.6 MHbuddy social networking service

3 Destinations

o o

3.1 A380 Milestones 3.2 Codeshare agreements

4 Fleet 5 Services

o o

5.1 Airport lounge 5.2 Cabin

5.2.1 First Class 5.2.2 Business Class 5.2.3 Economy Class 5.2.4 'Baby ban' and 'Child-free zone'

5.3 In-flight entertainment

6 Frequent-flyer programs

o o

6.1 Enrich by Malaysia Airlines 6.2 Grads

7 Accidents and incidents 8 See also 9 References 10 External links

[edit]History This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challengedand removed. (December 2012)
In 1987, Malaysia Airlines commenced operations after the airline changed its name from Malaysian Airline System. The airline began in 1947 as Malayan Airways, being renamed Malaysian Airways after Malaysia gained independence. After that, it changed its name once more to Malaysia-Singapore Airlines and thereafter ceased its operation. It was then divided into Malaysia Airlines and Singapore Airlines.

An Airspeed Consul, the first aircraft type operated by Malayan Airways.


Aviation History

Scheduled air passenger and mail services in Malaya commenced in 1937 when Wearne's Air Service (WAS) commenced operating services between Singapore, Kuala Lumpur and Penang. Wearne's Air Service was started by two Australian brothers, Theodore and Charles Wearnes.[6] The service commenced as a thrice weekly flight between Singapore and Penang The first flight, using an 8-seater de Havilland DH.89A Dragon Rapide took place on 28 June 1937[7] This inaugural flight departed Singapore from the then brand-new Kallang Airport which had just opened earlier in the same month on 12 June[8] Later a second D.H.89A enabled the expansion to daily services as well as the addition of Ipoh as a destination. The WAS services ceased with the onset of the Second World War Japanese occupation of Malaya and Singapore.

An initiative[9] by the Alfred Holt's Liverpool-based Ocean Steamship Company, in partnership with the Straits Steamship Company[10] and Imperial Airways, resulted in the incorporation in Singapore on 12 October

1937, Malayan Airways Limited (MAL). But the first paying passengers could be welcomed on board only some 10 years later. After the war, MAL was restructured to include just the partnership of Straits Steamship and Ocean Steamship. The airline's first flight was a charter flight from the British Straits Settlement of Singapore to Kuala Lumpur, on 2 April 1947, using an Airspeed Consul twin-engined aircraft.[11] This inaugural flight on the "Raja Udang",[12] with only five passengers, departed Singapore's Kallang Airport and was bound for Kuala Lumpur's Sungai Besi Airport. Weekly scheduled flights quickly followed from Singapore to Kuala Lumpur, Ipoh and Penang from 1 May 1947 with the same aircraft type.[13] The airline continued to expand during the rest of the 1940s and 1950s, as other BritishCommonwealth airlines (such as BOAC and Qantas Empire Airways) provided technical assistance, as well as assistance in joining IATA. By 1955, Malayan Airways' fleet had grown to include a large number of Douglas DC-3s, and went public in 1957. Other aircraft operated in the first two decades included the Douglas DC-4 Skymaster, the Vickers Viscount, the Lockheed L-1049 Super Constellation, the Bristol Britannia, the De Havilland Comet 4 and the Fokker F27. Over the next few years, the airline expanded rapidly, boosted by post-war air travel demand when flying became more than a privilege for the rich and famous. By 12 April 1960, the airline was operating Douglas DC3s, Super Constellations and Viscounts on new routes from Singapore to Hong Kong, and from Kuala Lumpur to Bangkok via Penang. Flights were also introduced from Singapore to cities in the Borneo Territories, including Brunei, Jesselton (nowKota Kinabalu), Kuching, Sandakan and Sibu. In 1957, the airline became a state-run stock corporation. With the delivery of an 84-seat Bristol Britannia in 1960, the airline launched its first long-haul international flight, to Hong Kong. When Malaya, Singapore, Sabah and Sarawakformed the Federation of Malaysia in 1963, the airline's name was changed, from "Malayan Airways" to "Malaysian Airlines" (though still abbreviated to MAS). MAS also took over Borneo Airways. In 1966, following Singapore's separation from the federation, the airline's name was changed again, to Malaysia-Singapore Airlines (MSA). The next year saw a rapid expansion in the airline's fleet and routes, including the purchase of MSA's first Boeing aircraft: theBoeing 707s, as well as completion of a new high-rise headquarters in Singapore. Boeing 737s were added to the fleet soon afterward.


An MSA Boeing 707 at Zrich-Kloten Airport. (1972)

The differing needs of the two shareholders, however, led to the break-up of the airline just 6 years later. The Singapore government preferred to develop the airline's international routes, while the Malaysian government had no choice but to develop the domestic network first before going regional and eventually international. MSA ceased operations in 1972, with its assets split between two new airlines; Malaysian Airline System (MAS)(now Malaysia Airlines), and Singapore Airlines. With the Singapore government determined to develop Singapore Airlines' international routes, it took the entire fleet of seven Boeing 707s and five Boeing 737s, which would allow it to continue servicing its regional and long-haul international routes. Since most of MSA's international routes were flown out of Singapore, the majority of international routes were in the hands of Singapore Airlines. In addition, MSA's headquarters, which was located in Singapore, became the headquarters of that airline. The initials MSA were well regarded as an airline icon, and both carriers tried to use them. Malaysian went for MAS by just transposing the last two letters and choosing the name Malaysian Airline System, while Singapore originally proposed the name Mercury Singapore Airlines to keep the MSA initials, but changed its mind and went for SIA instead. Acronyms for airline names later became less fashionable, and both carriers then moved on to their descriptive names.

Revenue Passenger-Kilometers, in millions

Year 1975 1979 1981 1990 1995 2000

Source:Air Transport World

Traffic 1633 2825 4290 11909 22558 37939

Boeing 737-200 of MAS at Brunei International Airport in 1987.

Malaysian Airline System took all domestic routes within Malaysia and international routes out of that country, as well as the remaining fleet of Fokker F27's. It began flights on 1 October 1972 and soon expanded, including introducing flights from Kuala Lumpur to London. In that year MAS operated flights to more than 34 regional destinations and six international services. In 1976, after receiving its DC-10-30 aircraft, MAS scheduled flights reached Europe, with initial flights from Kuala Lumpur to Amsterdam, Paris and Frankfurt. An economic boom in Malaysia during the 1980s spurred growth at Malaysia Airlines. By the end of the decade MAS was flying to 47 overseas destinations, including eight European destinations, seven Oceania destinations, and United States destinations of Los Angeles and Honolulu. In 1993 Malaysia Airlines reached South America when the airline received its Boeing 747 aircraft. MAS became the first airline in Southeast Asia to serve South America via its flights to Buenos Aires, Argentina. Malaysia Airlines also flew to Mexico City between 1994 and 1998 with fifth-freedom rights to carry passengers between Mexico City and Los Angeles, en route to Kuala Lumpur.


period of unprofitability

Prior to the Asian Financial Crisis in 1997, the airline suffered losses of as much as RM 260 million after earning a record-breaking RM319 million profit in the financial year 1996/1997. The airline then introduced measures to bring its P&L back into the black. For the financial year 1999/2000, the airline cut its losses from RM700 million in the year 1998/1999 to RM259 million. However, the airline plunged into further losses in the following year, amounting to RM417 million in FY2000/2001 and RM836 million in FY2001/2002. With these losses, the airline cut many unprofitable routes, such as Brussels, Darwin, Honolulu, Madrid, Munich and Vancouver. The airline recovered from its losses in the year 2002/2003. It achieved its then-highest profit in the year 2003/2004, totaling RM461 million.


period of unprofitability

Regional services flown by Fokker F50s, such as this one, were once operated at a substantial loss.

In the year 2005, Malaysia Airlines reported a loss of RM1.3 billion. Revenue for the financial period was up by 10.3% or RM826.9 million, compared to the same period for 2004, driven by a 10.2% growth in passenger traffic. International passenger revenue increased by RM457.6 million or 8.4%, to RM5.9 billion, while cargo revenue decreased by RM64.1 million or 4.2%, to RM1.5 billion. Costs increased by 28.8% or RM2.3 billion, amounting to a total of RM 10.3 billion, primarily due to escalating fuel prices. Other cost increases included staff costs, handling and landing fees, aircraft maintenance and overhaul charges, Widespread Assets Unbundling (WAU) charges and leases.[14] The Government of Malaysia appointed Idris Jala as the new CEO on 1 December 2005, to execute changes in operations and corporate culture. Several weaknesses in airline operations were identified as the causes of the RM1.3 billion loss. These included esclating fuel prices, increased maintenance and repair costs, staff costs, low yield per available seat kilometre ("ASK") via poor yield management and an inefficient route network. Under the leadership of Idris Jala, Malaysia Airlines launched its Business Turnaround Plan in 2006, developed using the Government-linked company (GLC) Transformation Manual as a guide. The most substantial factor in the losses was fuel costs. For the period, the total fuel cost was RM3.5 billion, representing a 40.4% increase compared to the same period in 2004. Total fuel cost increases comprised RM977.8 million due to higher fuel prices and another RM157.6[14] million due to additional consumption. In the third quarter, fuel costs were RM1.26 billion, compared to the RM1.01 billion in the corresponding period in 2004, resulting in a 24.6% increase or RM249.3 million.[14] Another factor for the losses was poor revenue management. MAS substantially lagged its peers on yield. Some of this gap was due to differences in traffic mix,[15] with less business traffic to and from Malaysia than to and from Singapore, but much of it was due to weaknesses in pricing and revenue management, sales and distribution, brand presence in foreign markets, and alliance base. Malaysia Airlines has one of the lowest labour costs per ASK at USD0.41, compared to other airlines such as Cathay Pacific and Singapore Airlines at USD0.59 and USD0.60[15] respectively. However, despite low labour costs, the ratio of ASK revenue to this cost was, at 2.8, much lower than Singapore Airlines, where the ratio is 5.0, and slightly higher than Thai International Airways[15] There are other factors listed in the Business Turnaround Plan of Malaysia Airlines, all leading to the net loss of RM1.3 billion in the year 2005.


from unprofitability

Under the various initiatives, launched together with the Business Turnaround Plan, Malaysia Airlines switched from losses to profitability between FY2006 and FY2007. When the Business Turnaround Plan came to an end, the airline posted a record profit of 851 million Ringgit (265 million dollars) in 2007, ending a series of losses since 2005. The result exceeded the target of RM300 Million by 184%.[16]

Route rationalising was one of the major contributors to the airline's return to profitability. Malaysia Airlines pared its domestic routes from 114 to 22, and also cancelled virtually all unprofitable international routes (such as Kuala Lumpur-Manchester, that required a 140% load factor to break even). Apart from that, Malaysia Airlines also rescheduled all of its flight timings and changed its operations model from point to point services to hub and spoke services. Additionally, the airline started Project Omega and Project Alpha to improve the company's network and revenue management. Emphasis has been placed on six areas: pricing, revenue management, network scheduling, opening storefronts, low season strategy and distribution management. Malaysia Airlines has been involved in discussions for new aircraft purchases, using its cash surplus of 5.3 billion Ringgit to eventually purchase 55 narrow-body aircraft and 55 wide-body aircraft.[17] Despite these achievements, critics continue to deride the carrier for lagging behind its competitors in the region. This notion is not helped by the fact Malaysia Airlines has not made substantial investments in customer service, especially compared to Thai Airways or Singapore Airlines. On 22 December 2009, Malaysia Airlines announced the purchase of 15 new Airbus A330 aircraft, with options for another 10. Expected to be delivered between 2011 and 2016, they are intended to operate on mediumhaul routes to eastern Asia, Australia, and the Middle East. The airline's plans are to run Airbus A380 planes, which will be introduced into service in 2012, on long-haul routes, A330s on medium-haul routes, and Boeing 737 aircraft on short-haul routes. Under this plan, it is unclear where Boeing wide-bodies currently in the fleet would fall.[18]



In 2011, Malaysia Airlines recorded a stunning net loss of RM2.52 billion due to rising fuel costs and mismanagement which was the largest in its company history. The company ceased operations to Surabaya, Karachi, Dubai,Dammam and Johannesburg in January, and ceased flights to Cape Town, Buenos Aires as well as Rome in February.


Turnaround Plan

On 28 February 2013, Ahmad Jauhari Yahya, the group Chief Executive Officer, reported a net profit of RM51.4mil for the fourth quarter, reversing the net loss of RM1.3bil a year earlier. MAS' improved financial performance last year was mainly attributable to its route rationalization programme, which saw an overall 6% reduction in available seat kilometre (ASK). This was matched by a marginal 2% reduction in revenue to RM13.76bil in 2012 and seat factor holding at 74.7%. The reduced ASK also helped MAS register a corresponding 13% decrease in expenditure.[19]



Malaysia Airlines is listed on the stock exchange of Bursa Malaysia under the name Malaysian Airline System Berhad. The airline suffered high losses over the years due to poor management and fuel price increases. As a result of financial restructuring (Widespread Asset Unbundling)[14] in 2002, led by BinaFikir, Penerbangan Malaysia Berhad became its parent company, incorporated in 2002, in exchange for assuming the airline's long-term liabilities. On the operational side, the Government of Malaysia appointed Idris Jala as the new CEO on 1 December 2005, to execute changes in operations and corporate culture. Under his leadership, Malaysia Airlines unveiled its Business Turnaround Plan (BTP) in February, 2006, which identified low yield, an inefficient network and low productivity (overstaffing). The airline headquarters building in downtown Kuala Lumpur was sold.[citation needed] The new corporate headquarters is now at the MAS Complex on the grounds of Sultan Abdul Aziz Shah Airport in Subang, Selangor.[20]

Malaysia Airlines Boeing 777 flight MH138 docked at Adelaide Airport awaiting departure

Following the Widespread Asset Unbundling (WAU) restructuring of Malaysia Airlines, Malaysian Government investment arm and holding company, Khazanah Nasional's subsidiary,Penerbangan Malaysia Berhad[21] is the majority shareholder with a 52.0% stake.[21] After Penerbangan Malaysia Berhad, the secondlargest shareholder is Khazanah Nasional, which holds 17.33% of the shares. Minority shareholders include Employees Provident Fund Board (10.72%), Amanah Raya Nominees (Tempatan) Sdn Bhd (5.69%), State Financial Secretary Sarawak (2.71%), foreign shareholders (5.13%)[21] and Warisan Harta Sabah (2.4%). It has 19,546 employees (as of March, 2007).[22] The Malaysian government reported that the government's holding company, Khazanah Nasional is keen on selling shares of Malaysia Airlines to remain globally competitive in an industry which is fast-consolidating.[4]



The airline has its headquarters and registered office on the third floor of Administration Building A at Sultan Abdul Aziz Shah Airport in Subang, Selangor, in Greater Kuala Lumpur.[23] The head office is located near Terminal 3 of the airport.[24] Previously the airline headquarters were on the third floor of the MAS Administrative Complex at Subang Airport,[25][26] in Subang.[24] Prior to the construction of the Kuala Lumpur MAS headquarters, the airline rented

space in the UMBC headquarters.[27] The airline had a permanent corporate headquarters in the Bangunan MAS,[28] a 34-36 story[24][27] building it owned alongJalan Sultan Ismail,[27] in the Golden Triangle.[24] The airline occupied 20 stories in the building.[24] The building was built for RM88mil. In 2005 The Star said that the building was "reported to be worth between RM300mil and RM350mil".[27] At one time before 2005 the airline chaiperson, Raja Tun Mohar, made an oral promise to Tun Abdul Razak of the Government of Malaysia that the airline would not sell its headquarters.[27] The airline had 600 employees in the building.[24] In 2006,[24] the airline moved its head office from the Kuala Lumpur building to the former headquarters in Subang,[24] in order to reduce inefficiencies and generate cash.[29] Channel News Asia stated that the airline had been "forced" to sell the former headquarters.[30] Idris Jala, the managing director, said that the sale could net RM3bil. In the event it did not, the airline would try to rent out the floors it occupied. The first phase was scheduled to occur from January to March of that year, with the chairperson, executive director, managing director, company secretary, corporate communication officer, and finance communication officer moving to the Subang facility. In June 2006, Phase II was planned as a move for the distribution, marketing, and sales divisions of the company, to Administration Block Three.[24] Around 2007 Permodalan Nasional Bhd purchased Bangunan MAS from the airline. The new owners planned to remodel the building, by installing a five star hotel apartment block and upgrade the offices to Grade A++. [31] The airline planned to relocate its headquarters from Sultan Abdul Aziz Shah Airport to Kuala Lumpur International Airport in Sepang, Selangor in Greater Kuala Lumpur in February 2012.[32]

Main article: Malaysia Airlines Subsidiaries Malaysia Airlines has diversified in to related industries and sectors, including aircraft ground handling, aircraft leasing, aviation engineering, air catering, and tour operator operations. It has also restructured itself by spinning-off operational units as fully owned subsidiaries, to maintain its core business as a passenger airline. Malaysia Airlines has over 20 subsidiaries, with 13 of them fully owned by Malaysia Airlines. [33] Some of the subsidiaries include:



Principal activities

Incorporated in

Group's Equity Shareholding

Malaysia Airlines Cargo Sdn. Bhd





GE Engine Services Malaysia

Joint Venture

Engine Overhaul



MASwings Sdn. Bhd.





Firefly Sdn. Bhd.





MAS Aerotechnologies Sdn Bhd





MAS Golden Holidays Sdn Bhd


Tour operator



Malaysian Aerospace Engineering Sdn Bhd





MAS Academy Sdn Bhd


Flight school



Abacus Distribution Systems (Malaysia) Sdn Bhd


Computer reservation Malaysia system


Taj Madras Air Catering Limited





MAS Catering (Sarawak) Sdn Bhd





LSG Sky Chefs [edit]Financial


Holding company




Malaysia Airlines experienced its worst loss in FY2005, with RM1.25 billion losses. Since then, the Business Turnaround Plan was introduced to revive the airline, in the year 2006. At the end of the airline's turnaround program, in financial year 2007, Malaysia Airlines gained RM851 million net profit: a swing of RM987 million compared to RM134 million in losses in FY2006, marking the national carriers highest -ever profit in its 60-year history. The achievement was recognised as the worlds best airline-turnaround story in 2007, with Malaysia Airlines being awarded the Phoenix award by Penton Media's Air Transport World: the leading monthly magazine covering the global airline industry.[34]
Malaysia Airlines Financial Highlights.[35] Year ended/(Quarter Ended) Revenue (RM '000) Expenditure Profit/(Loss) Shareholders EPS after tax (RM '000) after Tax (RM '000) Fund (RM '000) (cents)

Malaysia Airlines Financial Highlights.[35] Year ended/(Quarter Ended) 31 December 2002 31 December 2003 31 December 2004 31 December 2005 31 December 2006 31 December 2007 31 December 2008 31 December 2009 31 December 2010 31 December 2011 Revenue (RM '000) 8,864,385 8,780,820 Expenditure Profit/(Loss) Shareholders EPS after tax (RM '000) after Tax (RM '000) Fund (RM '000) (cents) 8,872,391 8,591,157 336,531 461,143 326,07 (1,251,603) (133,737) 852,743 245,697 493,106 237,346 (2,521,325) 2,562,841 3,023,984 3,318,732 2,009,857 1,873,452 3,934,893 4,186,000 747,596 3,395,266 1,093,198 38.7 36.8 26.0 (100.20) (10.90) 58.05 14.62 28.64 7.2 (75.5)

11,364,309 11,046,764 9,181,338 10,434,634

13,489,549 13,841,607 15,288,640 14,460,299 15,503,714 15,259,027 12,782,086 12,288,980 12,978,396 13,409,127 13,653,894 16,197,154

From the late 1990s up to 2007, Malaysia Airlines used the Going Beyond Expectations slogan to brand itself internationally. With the rollout of the Business Transformation Plan in 2008,[36] the CEO of Malaysia Airlines rejected the idea of using MH's network or certain other features as its new branding strategy.[37] Instead, the new branding strategy slogan is MH is Malaysian Hospitality, to emphasise the hospitality of its cabin crew instead of the airline's network and cabin classes.

[edit]Corporate image This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged andremoved. (December 2010)
Malaysia Airlines introduced the Sarong Kebaya design on 1 March 1986[38] for female flight attendants. It was designed by the School of Fashion at Mara Institute of Technology (Malay: Institut Teknologi Mara) and later known as Mara University of Technology (Malay: Universiti Teknologi Mara). The batik material depicts the kelarai motif, which is a bamboo weave pattern. It appears in the background in subdued hues of the basic uniform colour. Superimposed on thekelarai motif is a mixture of Malaysian flora, such as the cempaka, jasmine and the leaves of the hibiscus. The geometric Sarawakian motif is used for the lapels of the baju, edges of sleeves and the sarong. On 1 January 1993, the colours of the batik were enhanced to complement the colour of the new uniform. The male flight attendants wear grey colour jackets.[39] The stewardess' uniforms are similar to those of the Singapore Airlines' Singapore Girls.

[edit]Malaysia Airlines cabin staff

Malaysia Airlines regional cabin staff, the airline received the "World Best Cabin Crew" award by Skytrax in 2011.

Colour Code of female flight attendants

Red Sarong Kebaya with yellow flowers with red background are for the Inflight Supervisors Sarong Kebaya with pink flowers are for Chief Stewardesses, Leading Stewardesses and Flight Stewardesses (see difference from the name tag)

Sarong Kebaya with magenta flowers are for the ground frontliners

Colour Code of male flight attendants

Grey Coloured Jackets with light grey vest and light blue shirts