By Stephanie Jacob
Christoph Mueller
Malaysia Airlines Bhd has said that its route optimisation efforts have started to show results, as revenue per available seat kilometre (RASK) improved year-on-year (y-o-y) in its first quarter.
The comments came in its first quarterly performance update since transitioning from the old Malaysian Airline System Bhd to the new company on Sept 1, 2015.
It said: “The negative trend of RASK was stopped and reversed.” And added that load factor has also improved. The airline said that demand out of China and North Asia showed promising growth signs, boosted by increased inbound tourism demand.
It said: “Capitalising on this, Malaysia Airlines has signed an agreement to operate 180 additional charter flights from China to Sabah. Moving forward, the airline will be introducing more charter flights from selected key cities in China beyond the airline’s network, on top of the existing 180, to meet the increased appetite for inbound tourism.”
Commenting on the first quarter of operations, group chief executive officer Christoph Mueller said: “It is very rewarding to see the new team of employees creating a truly new airline, entirely customer focused and commercially led. We still have a long way to go but existing and new partners believe in our success and Malaysia Airlines has been set on a path towards reclaiming its position as one of the world’s leading airlines.”
The airline said it is now moving into the next phase of restructuring via its recently announced partnership with Middle Eastern carrier Emirates. It said the partnership would help expand the airline’s global network and provide a larger range of travel options to customers.
Under the agreement, Malaysia Airlines will add its code on Emirates flights to Europe, the Middle East, Africa and the Americas. While Emirates will add its code on Malaysia Airlines flights to domestic routes in Malaysia, Southeast Asia and selected cities across the Asia-Pacific region.
In line with this, Malaysia Airlines will suspend its Paris and Amsterdam routes from Jan 25, 2016.
“The partnership with Emirates will enable Malaysia Airlines’ passengers to continue having access to these destinations, and many more, with the added advantage of better schedules and more frequencies. It will also make it much easier for travellers from all corners of the globe to visit Malaysia… This is one of the airline’s initiatives towards enhancing air connectivity with key priority markets overseas for increased tourist arrivals into Malaysia,” said the airline.
Malaysia Airlines also said it continues to pursue cost saving initiatives as this is imperative for the turnaround. It said: “Significant cost saving initiatives have been identified across the new aviation group, with its more than 10 subsidiaries. A focal point will be the renegotiation of uncompetitive contracts with suppliers.
“In a structured process, most vendor relationships will be retendered over the months ahead in order to reduce the number of suppliers and to consolidate purchase volumes for better discounts.”
It said that most of the aircraft leasing contracts are held by Malaysian Airline System Bhd which is currently in administration. The carrier emphasised that it will only enter into new leasing agreements at competitive market rates. And said that the process of contract renegotiation will continue into 2016.
Malaysia Airlines also said it filled key management posts during the quarter and has completed its management team. This includes the appointment of Omar Siddiq Amin Noer Rashid as chief financial officer; Claudia Cadena as chief human resource officer; Linda Yeow as head of corporate finance; Nik Azli Abu Zahar as executive counsel; and Paul Simmons as chief commercial officer.
The airline has also created the Malaysia Airlines Work Council, which is to be fully established by January 2016. The aim of the council is to provide a platform for staff to brainstorm ideas, voice concerns and ultimately work together with management towards a common goal.
The council will be made up of two elected representatives each from the separate employee groups which include pilots, cabin crew, engineers, ramp services and cargo handling among others. The airline said it hopes the council will help “begin a new and mutually cooperative relationship between management and employee groups”.
“We are working hard to change the structure of the airline fundamentally, from the inside out. This will involve looking at process, efficiency and tighter cost controls. Through diligent execution, we’ve scored some quick wins this quarter. There is still a long way to go towards putting in the foundations for sustainable long-term growth, but our progress in the quarter signals a positive trend in the right direction,” added Mueller.
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