‘MAS may axe bleeding routes’

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‘MAS may axe bleeding routes’

Post by hlk on Mon 09 Dec 2013, 12:01

COST-CUTTING MEASURE: Flights to Europe, Middle East, South Africa and South America under scrutiny

Malaysia Airlines (MAS) may axe services to several unprofitable
destinations to cut costs, said group chief executive officer
Ahmad Jauhari Yahya.

He, however, did not say which routes MAS is reviewing.

It is learnt that routes to Europe, the Middle East, South Africa and South America are being studied by the key management.
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“If there are routes that are not performing, we will remove them from the network. We don’t want routes that are bleeding as it will drag down earnings.

“At the same time, we will review new opportunities. If we think there are profitable routes, we may fly there,” he told Business
Times in an interview last week.

He said if MAS were to remove any routes, it will work with its code-sharing partners to fly passengers there.

MAS has more than 25 code-sharing agreements with carriers such as Garuda Airlines and Cathay Pacific.

“For MAS, it is not just about reducing costs but increasing partnerships with other airlines and establishing new code-sharing agreements.

An airline cannot do everything these days. Partnerships and code-sharing are the way forward".

The loss-making carrier flies to some 100 destinations.

Last year, it cut eight loss-making routes, namely, Langkawi-Penang-Singapore, Kuala Lumpur-Karachi-Dubai, Kuala Lumpur-Dubai-
Damman, Kuala Lumpur-Surabaya, Kuala Lumpur-Johannesburg, Kuala Lumpur-Cape Town-Bueno Aires, Kuala Lumpur-Dubai and Kuala Lumpur-Rome.

Ahmad Jauhari said the carrier will increase flights to key regional cities so as to tap the strong growth in Asia.

“It is going to be an aggressive market and we are going to be as aggressive as possible to sell seats. But, at the same time, we will manage our costs. We will make sure our cost structure
is very sharp.”

MAS incurred a loss of RM830.25 million for the first nine months of 2013 and does not expect to make a profit for the full year.

Despite the loss, its cash position remains strong at RM5.4 billion.

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