Malaysia Airlines to focus on Asia this Year
Malaysia Airlines (MAS) will strengthen it presence in the Asian region this year in order to further grow its business and revenue in the aviation sector. Group Chief Executive Ahmad Jauhari Yahya said while MAS was located in the centre of the aviation industry’s future growth hub, the airline remained cautiously optimistic of a challenging operating environment in years to come.
“Although increased demand will be driven by emerging markets, a host of low-cost carriers now offer value-for-money travel and increased competition, thereby putting pressure on yields of all airline players. “In addition, rising fuel costs, demand shocks and seat over-capacity continue to bring challenges,” he told Bernama. Against this backdrop, Ahmad Jauhari said Malaysia Airlines continued to accelerate implementation of its business plan.
“Our corporate turnaround is premised on a recovery plan, implementing game-changers and building on its strong foundation to ensure sustainable profits for the future. “Turnaround initiatives are focused on increasing revenue and yields through aggressive marketing and promotions, and better capacity management,” he added. Simultaneously, he said, the airline group was actively lowering its costs through improved cost management and driving productivity for better efficiencies system-wide.
“We have suspended our non-profit routes like Buenos Aires, Argentina, and replaced it by adding our frequency to our popular routes like China and Philippines. “We have also expanded our direct flight destinations and to date, the Los Angeles route is the only destination in MAS that transits in Tokyo,” Ahmad Jauhari said.
A key element in Malaysia Airlines’ turnaround is a funding plan designed to strengthen its balance sheet, increase working capital and provide a solid funding platform for delivery of new, fuel efficient aircraft, he said. The airline has embarked on a fleet renewal plan, so essential, to maintain its relevance in a competitive market.
“The more technologically efficient aircraft reduces the fuel bill (currently equivalent to 38 per cent monthly) and enables Malaysia Airlines to offer a heightened level of products and services to guests at better yields,” he added. The growth of the world aviation sector is expected to come from the Asian region in line with strong annual Gross Domestic Product growth prospects from the countries of South Asia, China and Asia Pacific between 2011 – 2030.
A reflection of the positive growth of the Asia Pacific market can be seen in the new aircraft orders. The International Air Transport Association projected the outlook for 2013 to be moderately better than 2012. It said economic growth and world trade growth is expected to increase at a slightly faster pace in 2013. Air traffic volume in Asia Pacific is expected to see strong growth in 2013 as the cargo business recovers.
For MAS, its first A380 aircraft entered service in July 2012 marking the start of the airline’s change, Ahmad Jauhari said. “Customer response in all three classes (first, business and economy) to the 5-star product and service onboard the A380 service on the Kuala Lumpur-London route has been very encouraging,” he said. Average passenger load from July to October was 88 per cent with passengers commenting positively on the wider seats, quieter aircraft interior and overall more comfortable and enjoyable travel experience.