20 July 2016
Malaysia Airlines is on the right track of a turnaround and there is no need for further retrenchments this year while business and marketing activities will be stepped up over the next six months.
Pricing flexibility will also be adjusted and new routes will be added to lift the overall passenger load.
Newly appointed chief executive Peter Bellew said during a joint media interview that the national flag carrier recorded net profit during the first quarter of this year although second quarter sales might be affected by the fasting month.
"Long term booking prospects vary. While demands still run strong in northern Asia, performance is relatively weak in Southeast Asia and Australia due to oversupply."
Bellew said Malaysia Airlines would still register net losses this year but the current situation is far better than anticipated with the company on track to meet the turnaround target by 2018.
"The existing employment strength is reasonable and there is no need for further retrenchments. We may even hire again in 2017 or 2018 if load factor and routes increase."
Bellew also said the company was not currently in a rush to rebrand itself, and would instead focus on service enhancement to provide value-for-money products and services for the consumers.
"We have been relatively quiet lately but the next six months will see us reinforcing our commercial and marketing activities."
Increasing load factor
Bellew added that Malaysia Airlines would change its medium-high pricing policy in the past, and would sell off 15% to 20% of available seats at affordable prices before progressively upping the fares to make up for the current under-70% load factor.
"If we want to increase the load factor to 85%, we will need more flexible pricing policy."
That said, Bellew was not worried about lower profits as a result of the price-slashing campaign which he said would help achieve a balance between maximized load factor and costing.
He also said the airline planned to move six or seven new routes to klia2 next year a bid to reduce the airport handling cost.
"Cost difference between KLIA and klia2 is up to US$8-8.25, which is unprecedented in the aviation industry.
"If the fee at klia2 is not increased next year, we will begin to provide some of our services there. This will help us save more than RM100 million a year."
On the government's proposed RM6 billion restructuring fund, Bellew believed it was sufficient and there was no need for the government to inject more funds into the company.
As for the maintenance, repair and overhaul (MRO) deal with Lufthansa, Bellew said negotiations were going on smoothly and positive results could be expected in weeks.
In the meantime, following the introduction of Airbus A350 into service beginning next year, Malaysia Airlines is looking into providing premium economy services to its passengers while retiring the existing A380 through disposal or wet lease.
Original Source: www.mysinchew.com