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Malaysia Airlines to undergo major overhaul
N. Nithiyananthan, Kuala Lumpur, December 8, 2011

MALAYSIA Airlines (MAS) unveiled yesterday a plan to revamp its loss-making operations, which involve a multi-prong strategy to streamline the flag carrier’s network, reduce costs and win back customers.


"We are in a very, very deep crisis," said MAS group CEO Ahmad Jauhari Yahya. "Malaysia Airlines needs to make hard and unpopular decisions simply to survive."


As part of its overhaul, MAS will cut loss-making routes – mainly longhaul– and redeploy aircraft to profitable regional and domestic alternatives.


Buenos Aires, Johannesburg, Cape Town and Dubai will be axed in early 2012 (TTG Asia e-Daily, November 11), while Rome and Frankfurt are under consideration. On the other hand, frequencies to Manila, Jakarta and Tokyo will be boosted.


A new premium full service carrier will also be introduced by the second half of 2012, offering flights to ASEAN destinations and key cities in South Asia and greater China (TTG Asia e-Daily, October 21). In the long term, the new airline will run all the domestic and regional services currently operated by MAS.


“We intend to create a separate management structure to focus on the unique customer needs of regional premium travellers,” said Ahmad Jauhari.


Meanwhile, cooperation with AirAsia and AirAsia X for greater efficiencies under the Comprehensive Collaboration Framework is expected to save MAS up to RM100 million (US$31.9 million) a year.


Developments expected to help win back customers and reduce fuel costs include the delivery of 23 new aircraft next year, including five Airbus A380s starting from July 1, and MAS attaining full membership in the oneworld alliance by September 2012 (TTG Asia e-Daily, June 6).


“MAS can reach out to destinations not covered, via networks of other airlines. Also, this alliance has a gap in South-east Asia, and MAS can play a role to fill it,” said Ahmad Jauhari.


With these measures, MAS is hoping to cut losses to RM165 million in 2012, and turn a profit by 2013. The airline’s nine-month cumulative loss for the first three quarters of 2011 was RM1.25 billion.

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