ASEAN KEY DESTINATIONS
Malaysia Airlines tries to regain lost market share
THERE will be no more staff and route cuts for Malaysia Airlines Bhd (MAS) but a period of refinement with lower fares for the economy class as the carrier tries to regain market share it has lost over recent years.
MAS will add six to seven new destinations next year, mostly flights into North Asia from KLIA2, Sabah and Sarawak, which will allow the airline to tap new segments of the market as it expands further into growth markets which are in the four-to-eight-hour flying radius.
With passenger loads below 70 per cent currently, MAS Chief Executive Officer Peter Bellew (pic) said in his first media briefing since his appointment as CEO over two weeks ago that “we need to aggressively push our product... that is our biggest priority now”.
“Most of the cost cutting is done, now it is about refinement. We have got better in our purchasing, handling cost is 50 per cent lower, catering cost is 20 per cent lower and fuel five to six per cent lower. It is getting much better. We need to be nimble and fly smarter,” he added.
MAS has cut 6,000 jobs and shrunk its network by 30 per cent.
He also does not see the need to change the staff uniforms now, a topic of controversy recently, although he did add that it would be done next year.
The focus ahead is to get high-paying customers to fill the front end of the cabin. Hence, all the cabin refurbishment and upgrades in service quality is under way. But at the same time, he wants to change the airfare policy to cater to the relatively price-conscious customer amid a competitive landscape so that he can also fill the back end of the cabin.
That is why he said that MAS would remain a full-service international carrier, competing with the likes of Cathay Pacific and Singapore Airlines, but offering “relatively lower fares”. Bellew feels this message had not been communicated well to the consumer and wants to change that.
“It is possible for us to address all market segments with fares. We can do it since we have a modern revenue management system,” he added.
MAS will continue to ride on its partnership with Emirates to offer long-haul connectivity besides London, where it has daily flights.
He said with the product enhancement and aircraft refurbishment under way, the airline will “look ten times better from now”, with a sharper focus on its business class product offering. MAS will become more “generous with our frequent flier points, especially for business travellers as we have not been doing that”.
For the economy class, MAS will still offer free baggage, food, no extra charge for using credit cards and seating, but it will change the pricing policy.
“We are putting more fares in the lower bucket and they will be available when you book. Previously, the fares started from medium to relatively higher, but now, we will have 15 per cent to 20 per cent seats on the relatively lower fares and work progressively. This is not something we did previously but what most airlines do. We are changing the airfare pricing policy to offer greater value,” Bellew said.
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