Malaysian Airlines

[AFFF]

I've been trying to discover the reason why Malaysian withdrew from the MAN-KUL route, asked senior manager at MAN for the reason and got a vague answer which indicated the carrier was having serious financial troubles. Flown this route several times, loads always appeared healthy, so, does anybody know the real reason? Thanks in advance, AFFF.

[Andy_S]

Very simple. The loads may have been healthy, but the yields weren't. Majority of pax ex-Manchester were low yielding tourist traffic.

I'm not sure I'd go so far as to say MAS are in serious financial trouble, but they've certainly realised that they're living beyond their means. As a result, some international and domestic routes are being chopped, they're selling their KL headquarters and there are even doubts as to whether they'll go ahead with their A380 purchases. Sadly, as a recent passenger, I also get the impression that quality of in-flight service has deteriorated (been reduced?).

[Cyrano]

I'd certainly go so far as to say MAS are in serious financial trouble.
Their MD said in February:
On its current business assumptions, course and speed, MAS will likely fail, running out of cash in April 2006.
There is no question that MAS is in crisis within the increasingly challenging Asian airline industry. Today we have a cash and profit crisis. On current business assumptions, course and speed, we will surely fail unless we radically change the way we run our business.
To their credit they have been very open about the steps to be taken and even published a turnaround plan here (PDF) (http://hq.malaysiaairlines.com/mys/eng/about_us/investor_relations/MASWay_F.pdf).
Hopefully this will be successful, but it involves shedding routes, jobs, aircraft etc.
(Incidentally, AFFF, as has been said here numerous times, healthy loads don't mean the route is healthy. Any airline can deliver healthy loads by cutting fares. Load factors are only half the story - you need to know what the yield was too.)

[Captain Rat]

But as usual with Malaysia, the wonderfull government backed plan involving Air Asia operating nearly all the domestic routes, and MAS concentrating on the profitable internatinal routes (of which MAN-KUL wasn't) has started to fall apart. The government has again started to subsidise MAS so going back on its promises.

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From Malaysian Papers;


Fernandes: AirAsia is not the ‘bad boy’

By MEERA VIJAYAN

JOHOR BARU: AirAsia does not want to be branded as a “bad boy” and is willing to give up whatever routes to ensure that the state continues to prosper.

The budget airline’s CEO Datuk Tony Fernandes said the board of directors and shareholders did not want to be blamed for any slowdown of Johor’s economy when it takes over domestic routes in Senai airport next month.

“We don’t want to hold back any development,” he said, adding that AirAsia had no issues with MAS operating the Johor-Kuching or Johor-Kota Kinabalu routes if so desired.

However, Fernandes felt that perhaps certain people did not understand the struggle AirAsia had gone through the last couple of years in “single-handedly” building up so many routes for Senai.

In the last three years alone, AirAsia had pumped around RM60mil worth of investments into Johor.

“We are not the bad boys. We have done a tremendous amount and we have done it without any subsidies,” said Fernandes, commenting on the fact that MAS had been receiving subsidies worth billions for the last 35 years.

“It has been a very lonely battle for us,” he said, but was quick to add that the management of Senai airport had been “fantastic” in developing Senai.

Fernandes, however, said AirAsia still required government intervention and hoped to meet with Mentri Besar Datuk Abdul Ghani Othman at the soonest.

Commenting on the debates in state assembly that called for the Senai airport to be renamed as a domestic airport, Fernandes said AirAsia was working on starting international flights from Senai.

“We are currently waiting for approval to start flights into Indonesia

AirAsia to protest to Cabinet

By M.KRISHNAMOORTHY

PETALING JAYA: AirAsia will take its grouses to the Cabinet next week on the lifting of the floor price for Malaysia Airlines, which the low-cost carrier deems is unfair competition.

Its chief executive officer Datuk Tony Fernandes said he was shocked at MAS’ announcement of the lifting of the minimum prices and the three new domestic routes it was going to fly after Aug 1.


Fernandes: ‘At no point was it agreed for MAS to allow discounted fares’
“At no point was it agreed for MAS to allow discounted fares or supersavers, because the rationalisation process was to keep two different markets,” he told reporters.

“This is shocking and we are surprised that MAS is announcing this and not the Government, as agreed earlier. We hope to seek clarification from the Cabinet on these new routes and the subsidy of RM1bil.

“This is being paid by the taxpayers and we are not getting any subsidy when both airlines are listed on the stock exchange.

“We understand MAS has made a presentation to the Cabinet and we would like to give our side of the story for the betterment of the aviation industry in Malaysia.”

It was reported yesterday that MAS had been given permission to continue offering discounted fares on domestic routes, and the Government had also decided that the national carrier should also fly the Johor Baru-Kuching, Kuala Lumpur-Tawau and Kuala Lumpur-Sandakan routes which were deemed to have a high volume of business travellers.

Fernandes said MAS was not allowing AirAsia tocompete on a level playing field and the unfair competition may force it to tie up with two foreign carriers, which had approached AirAsia for interlining into Malaysia.

“It is unfair to subsidise MAS when we do not get the same rights like the national carrier to fly to Singapore and other international destinations,” he said, adding that AirAsia has only been given five exclusive domestic routes, which it had already started.

They are Johor Baru-Kota Kinabalu, Johor Baru-Kuching, KL-Sandakan, KL-Tawau and Kota Kinabalu-Miri.

“If MAS does not want to work with us, they can have all these five routes,” he said.

“The national carrier also has several advantages over us, like several international routes, a privelege we are not given.”

Fernandes explained that the Transport Ministry, MAS and AirAsia had met for two years and worked out details of a fair plan and it would be unfortunate to see the plan not working out as envisioned by the Government.

“The Government wanted two strong airlines, MAS and AirAsia, to work together for the progress of the aviation industry in the country, regionally and internationally, and the Government had no intention to see wasteful competition,” he added

[1DC]

We have used Malaysian business to Oz at least once a year, good service and good value(to me). My impression was that on the UK to KUL sector many of the business passengers were Malaysians on a freebie, no proof but that was just my impression..