RISK MITIGATION B. OPERATIONAL (cont’d.) Cyber Threats These arise from different information system channels that bring about threats such as ransomware, phishing, data leakage, hacking and inside threats. These threats can cause significant damage and losses to the Group. The Group mitigates these risks by having a dedicated information security team that focuses on detecting, containing and remediating cyber threats. The Group adopts a robust information security system that revolves around the ISO/IEC 27001 process and methodology to secure its information systems. Regular security assessments, penetration tests and source code reviews are performed on the systems to ensure cyber resilience. Safety Threats Increasing exposure to operational safety hazards and risk as the Group increases routes, flights and passenger volumes. The Group mitigates this risk through a robust Safety Management System that is emphasised through the Safety Review Board (“SRB”) which ensures that rigid safety targets are obtained through the safety and quality standards. The Group places emphasis on digital tools that capture data for safety risk analysis promoting continuous improvement. The Group is subject to routine mandatory Safety Audits for its operating licenses. The Group has completed all IATA Operational Safety Audits with the relevant certification for Malaysia, Thailand, Indonesia and Philippines. C. FINANCIAL Covid-19 Pandemic The aviation industry has been hardest hit due to closure of international borders and the drastic reduction in flights as well as passenger volumes. This has created operating cash flow challenges and losses that could lead to insolvency. The Group mitigates this risk by cost reduction and cost avoidance exercises to manage the loss in revenue. Further to that, the Group has sought additional funding through several corporate exercises to keep it as a going concern. Fuel Price Fluctuations in fuel price have a significant impact on profitability as fuel comprises a key component of the business’ operational costs. The Group mitigates this risk by actively monitoring and managing its exposure to fuel price volatility through various hedging strategies. The Group treasury department has a team that monitors and manages its hedging strategy. Foreign Currency Translations Unexpected depreciation of the Malaysian Ringgit could have a significant impact on the cost of financing and business operations. This holds particularly true of the exchange rate with the US Dollar. The Group mitigates this risk by actively monitoring and managing its exposure to foreign currency volatility through various hedging strategies. The Group treasury department has a team that monitors and manages its hedging strategy. C O R P O R A T E G O V E R N A N C E A N N U A L R E P O R T 2 0 2 1 1 8 1
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