Malaysia Airlines Implements Route Rationalisation to Stem Losses and Improve Regional Network
Subang, 14 December 2011 : Malaysia Airlines has embarked on a significant route rationalisation exercise as part of its Business Plan announced last week, to stem its losses anticipated this year and in 2012.
The route rationalization exercise takes effect early next year and involves the withdrawal from the following loss-making routes:
- Effective 6 January 2012: Daily flights Kuala Lumpur – Surabaya vv B737 route
- Effective 10 January 2012: Thrice-weekly Kuala Lumpur – Dubai vv A330 route
- Effective 12 January 2012: Twice-weekly Kuala Lumpur – Karachi – Dubai vv A330 route
- Effective 13 January 2012: Twice-weekly Kuala Lumpur – Dubai – Damman vv A330 route
- Effective 30 January 2012: Daily Langkawi – Penang – Singapore vv B737 route
- Effective 31 January 2012: Thrice-weekly Kuala Lumpur – Johannesburg vv B777 route
- Effective 1 February 2012: Twice-weekly Kuala Lumpur – Cape Town – Buenos Aires vv B747 route
- Effective 2 February 2012: Thrice-weekly Kuala Lumpur – Rome vv B777 route
Malaysia Airlines’ Group Chief Executive Officer Ahmad Jauhari Yahya said, “The withdrawal was based on our own independent internal profitability and yield analysis. This accounts for almost 12% of our passenger capacity and we estimate that the ongoing route rationalisation will improve loads, increase yields and have a profit impact of RM220-302 million for 2012.”
“The above route rationalisation is expected to have minimal impact on Malaysia's position as a top tourist destination in Asia as we will work aggressively with our code share partners. Through our existing arrangements with them, we will continue to promote connectivity between Malaysia and key international destinations as well as contribute towards the overall efforts by the various authorities to increase tourist arrivals to Malaysia. We also hope to return to these markets after we have stabilised our business,” he added.
Malaysia Airlines regrets for the inconvenience to passengers as a result of these changes and assures that it will honour all forward bookings ticketed to date on the affected routes. The Company will make alternative carrier arrangements, at its own cost, to ensure minimum discomfort to passengers.
The impact of the above rationalisation on Malaysia Airlines’ cargo operations is also expected to be minimal as the national carrier continues to maintain its key cargo destinations in the United Kingdom, Europe, Orient, Australia, Middle East, South Africa and the United States.
The rationalisation of these routes is also in line with Malaysia Airlines’ focus on moving to the `hub-and-spoke’ approach with KL International Airport (KLIA) as its premier hub of its global network. The national carrier will be reconfiguring its network through retiming of its existing frequencies to provide increased direct connectivity between KLIA and international destinations.
Concurrently, Malaysia Airlines will focus on the core ASEAN region, South Asia, Greater China and North Asia where the demand outlook is strong, fuelled by a burgeoning middle class and increased global and intra-regional trade. The national carrier will thus increase frequencies to key regional cities to benefit from the strong growth in regional demand.
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