Malaysia Airlines: no cuts to Australian, UK or European flights

Malaysia Airlines: no cuts to Australian, UK or European flights

Malaysia Airlines expects that its Australian flights will not only remain under the government’s recovery plan but will be earmarked for future growth, while new destinations will also be targetted.

The ‘Kangaroo Route’ from Australia to London and Paris via Kuala Lumpur will also continue to be a solid earner for the airline.

A senior MAS executive told Australian Business Traveller that the airline would maintain its current schedule until at least the middle of next year, when the new parent company of the nationalised airline would begin operating.

Read: Malaysia Airlines shareholders approve nationalisation plan

“Right now it’s status quo, there will not be any consideration of cuts, but I’m very sure that overall network size will not change significantly” Mr PK Lee, Regional Senior Vice President of Malaysia Airlines, told Australian Business Traveller in Kuala Lumpur.

“The contribution from Australia and New Zealand to the UK and European long-haul market is very important to MAS, and we need that Kangaroo Route to continue to grow.”

Australia is the airline’s largest market outside of Malaysia and while MAS has added larger aircraft and more regular services to Australia, Lee says there is still room for further expansion.

“There are opportunities where we can develop more of the business travel market, whether that is in business class or economy, to give us a better balance in terms of higher average fare and higher revenue per passenger.”

“Australia is a very important contributor to our network. We have added 34% capacity into this market this year and we are winning more business, so I don’t see a reason why we cannot continue to grow.”

Lee says that the forthcoming review of the MAS network will also encompass “new markets and new opportunities” beyond the current route map.

“We are on a constant search for opportunities – if there is reason for us to grow, we definitely will.”

Also read: Malaysia Airlines eyes Airbus A350, Boeing 787

PREVIOUS | Malaysia Airlines will consider cutting some international and regional routes and closing some of its airport lounges as the struggling airline works to ‘right-size’ itself.

However, the airline – which is expected to be fully nationalised by December 31st as it embarks on an ambitious five year turnaround plan – says that some of the more profitable international routes could also be expanded.

State-owned Khazanah Nasional, which will likely become MAS’ sole owner by year’s end, has said it will “rationalise the network to be principally regionally-focused, with strong global connectivity through MAS’ oneworld alliance and other code-share partners.”

While this would not mean widespread demolition of  Malaysia Airlines’ international network, a senior MAS executive says that “dropping routes is certain”.

“We will continue to be a premium carrier with a strong focus on regional (flights) but also on selected long-haul destinations that are doing well commercially” Mr PK Lee, Regional Senior Vice President of Malaysia Airlines, told Australian Business Traveller in Kuala Lumpur.

Lee added that routes closer to home would also come under the bean-counter’s gaze.

“It’s not just long haul – we will review the performance of every route, even short haul.”

At the same time, Lee suggested that “a route which is performing well could be expanded with more flights or more seats.”

Some lounges may close

The airline’s membership of the Oneworld alliance will also come into play in the ‘new’ Malaysia Airlines, potentially resulting in the closure of many MAS airport lounges outside of Malaysia.

Sydney’s MAS Golden Lounge was shuttered in March this year, with passengers directed to the first class and business class lounges of Oneworld partner Qantas.

While Malaysia Airline pays Qantas a ‘lounge access’ fee for each passenger, this is still cheaper than running a dedicated lounge to support its own flights.

“It’s only logical that we do not duplicate the cost structure where we have Oneworld partners operating lounges” Lee suggested.

“I believe that these are some of things we need to consider for international out-station lounges to optimise our whole structure."

David Flynn travelled to Kuala Lumpur as a guest of Malaysia Airlines.

Follow Australian Business Traveller on Twitter: we're @AusBT

David Flynn
David Flynn is the editor of Australian Business Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.
 

19 comments

  • watson374

    watson374

    7 Nov, 2014 09:31 am

    I think MH needs to find a better term than 'turnaround plan'. They've gone through so many turnaround plans that Malaysians are convinced their national carrier is merely going around in circles.

    I'm sure they'll pull through.

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  • Al Glidden

    AlG

    7 Nov, 2014 10:09 am

    Closing a lot of their lounges would make sense to me, if a Oneworld partner has a good enough lounge at a certian airport why should MAS also have their own?

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  • watson374

    watson374

    7 Nov, 2014 10:28 am

    It is a legacy from when they were a non-aligned carrier. Now that they are oneworld, they can leverage partner lounges in ports like SYD and HKG, but before they joined, they preferred to run their own lounges rather than contract it out.

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  • TheRealBabushka

    TheRealBabushka

    7 Nov, 2014 10:35 am

    Prediction of cities to be axed (alphabetical order):

    • Cochin (Air Asia natural destination/turf)
    • Darwin (Or maybe lower frequency)
    • Kathmandu (Questionable yield - Air Asia natural destination/turf)
    • Krabi (Primarily leisure market - Air Asia natural destination/turf)
    • Kunming (Air Asia natural destination/turf)
    • Medan (Questionable yield - Air Asia natural destination/turf)
    • Phuket (Primarily leisure market - Air Asia natural destination/turf)
    • Seoul (If there is a sizeable Korean manufacturing presense in Malaysia, people from that industry would probably fly Korean Air) 
    • Siem Reap (Primarily leisure market - Air Asia natural destination/turf)

    Then there is the whole heap of domestic routes, which MH should really exit. But can it?

     

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  • watson374

    watson374

    7 Nov, 2014 10:45 am

    There is a sizeable Korean expat community in Malaysia. I really wouldn't axe ICN (it's only one daily flight), but I agree on all the rest.

    I think that domestically and regionally, they should abandon J on the 738s and remodel the operation along the lines of NZ - all-Y, but with extra-legroom seats reserved for premium pax. Trying to compete with SQ's widebody regional fleet is asking to stay in the hole they've been stuck in since the seventies.

    They also need to zero in on what AirAsia doesn't do anymore, which is to fly extensively ex-BKI (East Asia) and ex-PEN (India). This is where those NZ-style narrowbodies will come in useful.

    Thoughts, TRB?

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  • moa999

    moa999

    7 Nov, 2014 11:03 am

    I don't think dumping J on 738s is smart - there are people who pay for this which helps your yield, and it is a point of differentiation against the LCCs -- of which there are more and more of througout SE Asia

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  • watson374

    watson374

    7 Nov, 2014 11:17 am

    The problem that arises is that passengers that need to connect through KUL often prefer to connect through another hub (e.g. SIN). I think there is a need to chase nonstop pax from other ports in the country.

    Perhaps not remove J, but definitely rethink short haul.

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  • TheRealBabushka

    TheRealBabushka

    7 Nov, 2014 11:32 am

    Yeah I agree.

    Although I'm not privy to the numbers. Numbers don't lie - So if you have a skilled team who reviews the numbers and a tight framework has been developed for escalation and decision-making, then I'm sure their rationalisation exercise can be robust on-going.

    However I think this is where things have fallen down. It's fine to slash routes but its not a means to an end. Do you have the appropriate framework and team-culture to be nimble and proactive?

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  • Chris O'Neill

    happyflyting

    10 Nov, 2014 07:53 am

    Hi Watson, I agree: 

    I travel to India twice a month in J class on A330+738 with MH. Price point is good, but often last minute fares are only a few hundred bucks short of SQ on wide-body and 180 degree lie flat. It doesn't make sense to fly outdated (even on A330) and squashed in 738 for $5,600 on MH, versus 777 or even A380 on SQ for ~$5800. 

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  • J Dee

    J Dee

    7 Nov, 2014 04:37 pm

    I've flown MAS between KL & Seoul on a number of occasions & each flight has been close to/full, with the majority of passengers being Korean.

    My last fligh was something of a circus as cabin staff were still trying to get a number of Korean passengers seated while the aircraft was taxing for departure. I couldn't decide if they were arguing about seats, trying to change seats or just chatting with friends. Fortunately, everyone was seated by the time we took off.

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  • crosscourt

    crosscourt

    9 Nov, 2014 10:42 pm

    I was on MH from Kathmandu to KL and I can tell you it was totally full in Y and in J 2 empty seats, one next to me and one across aisle. thats sounds like a good service for them. then i was on MH from KUL to PVG, only one in J, me, and only 20 in Y on a 777. Tinkering needed there ...

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  • sagidec

    sagidec

    7 Nov, 2014 11:11 am

    Golden Lounge in question:

    - LHR - perhaps BA lounge if they shift to work with BA when they launch LHR-KUL flight...

    - MEL, PER, SIN - perhaps use QF lounge 

    Previous talks about route rationalisation that I read about - FRA, IST

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  • watson374

    watson374

    7 Nov, 2014 11:21 am

    Axe all the Australian lounges, but the Singapore one needs to stay as MH operates from T2 and the QF lounge is in T1.

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  • Peter Loh

    PeterLoh

    7 Nov, 2014 03:33 pm

    I believe MAS, SIA, Silkair and Firefly all codeshare on each other between Singapore and Malaysia (but not beyond), so access to the KrisFlyer lounges at SIN might not be so ridiculous (as much as I hate those lounges).

    Having said that, operating the SIN lounge should be a bit cheaper and make more sense than other lounges outside Malaysia due to the relatively high traffic to KL as well as Kuching.

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  • abudhabi1

    abudhabi1

    9 Nov, 2014 10:12 am

    ADL uses Qantas Lounge so should the rest of the nation.

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  • Chris_PER

    Chris_PER

    7 Nov, 2014 11:24 am

    Can imagine Perth - KotaKinabalu to be axxed.

    CDG / FRA / AMS likely to be axxed, leaving LHR the only European destination.

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  • TheRealBabushka

    TheRealBabushka

    7 Nov, 2014 11:44 am

    I dont think MH will do a Qantas on that count.

    If thoes sectors are underperforming you would not have an AMS/KUL service by KL, FRA/KUL service by LH or a CDG/KUL service by AF.

    Unlike QF, MH is not an end-of-the-line carrier. There is still an opportunity for hub-connections. The key is to identify the key connection citites.

     

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  • watson374

    watson374

    7 Nov, 2014 12:41 pm

    Those are the connection cities. That's why they fly there. AMS has historically been a great 'gateway' for MH.

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  • Alex

    bbc_au

    8 Nov, 2014 05:43 pm

    Etihad will be pleased - finally a Melbourne lounge location becomes free?

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21 Jul, 2019 10:50 am

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