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Malaysia Airlines reports “steady progress” and changes A380 strategy
December 15th 2017
Malaysia Airlines Berhad (MAB) has said it “experienced a tough third quarter with stiff competition, rising fuel and adverse foreign exchange movements”. Read More » Nevertheless, compared to the same quarter in 2016, the airline reported 2% higher revenue available seat kilometres (RASK).
MAB said it would continue to focus on improving revenue and yields and also expand its network to include adding Kuala Lumpur- Yogyakarta following the launches of services to Chongqing and Surabaya from its home city.
“The third quarter continued to be challenging with overcapacity in the markets we are in. Our peers in the region seem to be showing trends of declining yields, putting pressure on overall RASK. I am happy to see MAB buck this trend by achieving improvement in both these areas. RASKs increased 2% on the back of an average fare increase. Despite higher average fares, load factors were not unduly impacted, remaining stable at 77.5%,” said MAB Group CEO, Captain Izham Ismail.
“We have seen some progress, but there is still a long way to go. We will be renewing our focus on yields with clearer customer segmentation and improved revenue management. Revenue is improving, but we need to step this up to address rising costs from fuel and foreign exchange volatility.”
For most of 2016 and this year, MAB has said it would replace its six A380s with an equal number of A350s on flights to London and that it would use the spare superjumbos to launch a hajj/umrah and wet-lease specialist carrier.
But this week the airline confirmed to Orient Aviation that it would maintain an A380 on one of its double daily Heathrow rotations during the busy summer holiday season. Additionally, it would roster the A380 on an ad hoc basis on flights to Hong Kong, Seoul, Tokyo, Melbourne and Sydney in lieu of A330s.
MAB intends to take out the A380 on its London service from early 2018 to the beginning of the summer peak. From January 15, both daily London flights will be operated with the carrier’s just-delivered A350-900.
The Malaysian flag carrier is desperate for larger aircraft to replace its narrow body B737-800s on regional trunk routes. The airline is on track to receive the first of six ex-airberlin A330-200s on lease from AerCap in early 2018. The -200s will fly to Shanghai, Hong Kong, Bangkok, Mumbai and Delhi.
MAB knows it must do better in customer service delivery, particularly its deteriorating on-time performance. “We acknowledge the customer experience needs to be improved in certain areas. Technical issues, severe weather, air traffic control delays and operational constraints led to a 3% reduction in on time performance [to 70%]. These issues are being addressed with a particular focus on operational efficiencies in engineering and ground handling. I am also personally paying close attention to the customer experience,” Captain Ismail said.
MAB completed an upgrade of its domestic and regional lounges at Kuala Lumpur International Airport in the third quarter and its flagship lounge in the international satellite terminal will reopen next month after a renovation.
