flee

Time to move on - MASWings returned to do a great job and the aviation industry is dynamic. The environment has changed and players also need to change. D7 does not have deep pockets nor taxpayer money to bail them out should they make losses. They have to work hard for their success. Lobbying the govt. is part of that hard work, unfortunately...

And Azran is tweeting: Of course, each side has its own points and focus. MH is a govt. department and works at that kind of pace. D7 is a commercial enterprise and cannot afford to wait for things to happen. They have to make things happen for themselves. Otherwise they will go out of business. Whatever it is, I am sure that all this is good for consumers, even those who do not travel on LCCs...

MH responds: AirAsiaX only interested in our routes says Malaysia Airlines Compete and collaborate to achieve what is best for Malaysia — Tengku Azmil Zahruddin

Lufthansa plans to operate its first Airbus A380 flights to Tokyo Narita and Beijing. The Star Alliance carrier, which will take delivery of its first A380 on 19 May, will operate the superjumbo jet between Frankfurt and Tokyo thrice-weekly from 11 June. From 26 August, thrice-weekly A380 flights between Beijing and Frankfurt will commence, says Lufthansa. Its third A380 destination will be Johannesburg. More: http://www.flightglobal.com/articles/2010/04/29/341252/lufthansa-to-operate-first-a380-flights-to-tokyo-and.html

Why do they keep bringing this up? D7 applied for rights to fly into SYD in 2009. The MoT has dragged its feet on this application. The AirAsia Group are quite used to this kind of inactivity by MoT. That is why they highlight it on the media from time to time. While KUL is currently not a major transit point (for business travel, at least) the AirAsia Group airlines (AK, D7, FD and QZ) are trying hard to establish their ASEAN network of hubs. They have a bigger picture to look at and they want to make ALL ASEAN capitals major transit points. They are not waiting for governments to invite airlines - they are trying to do it themselves because they think that it is a win-win situation for the country, airport and airline. D7 meanwhile is not sitting still even when SYD is not approved. They have increased frequencies to both PER and MEL to double daily. They have increased frequencies to TPE and they are launching services into India soon. So D7 is basically doing what most well run businesses should be doing - fire on ALL cylinders.

100%? I beg to differ - I can at least confirm what he said about KUL-BKI is absolutely true. Before AK, frequencies were lower and fares were higher. And here is another traveller's experience (Malaysian Insider comment):

Minister's response is political gobbledeegook - no new info! We all know that the Ministry has been stalling its decision for over a year already. I guess the Minister's personal political battles in the MCA has distracted him from his real job! As for QF and JQ alliance, it is only on the maintenance and logistics issues.

Waiping, Thanks for sharing a piece of history - now MASWings can fly with confidence and at lower costs. It shows in their performance numbers too - more passengers, better on time performance, more profitable! As for your equipment, it should not be lens or flash. You need both, but which one you buy first is the decision you have to make! Keep shooting!

Malaysian Insider interview: http://www.themalaysianinsider.com/index.php/malaysia/61503-give-us-sydney-not-pyongyang-says-airasia-x By Lee Wei Lian KUALA LUMPUR, April 28 — The government’s efforts to protect Malaysia Airlines is hurting the country’s economy as it is discouraging more connectivity, says AirAsia X which is involved in a tussle over rights to fly to Sydney and other key cities. In an interview with The Malaysian Insider, AirAsia X CEO Azran Osman Rani said that he was told not to “disturb” Malaysia Airlines and consider flying to 34 cities not served by the incumbent including North Korea’s capital Pyongyang, Peshawar in Pakistan, Dili in East Timor, Almaty in Kazakhstan, Mahe in the Seychelles and Darwin, Australia. Azran said that such thinking is bad for the country as Malaysia’s connectivity to key cities such as Beijing, Tokyo and Sydney is being compromised which will impact tourism, the second highest source of foreign exchange, as well as business as corporations take connectivity into account when deciding where to locate regional headquarters. “You are spending so much money on Malaysia Truly Asia (tourism campaign) and does she (the minister of tourism) want the plane to fly to Pyongyang or Seoul?” said Azran. “Does she want the plane to fly to Sydney or Darwin? Does she want the planes to fly to key markets or small peripheral markets that we can’t even spell?” He said that competition was good as it would grow the overall market and said that since AirAsia X started flying to Perth and Melbourne, traffic increased by 66 per cent and 48 per cent respectively while on the Kuala Lumpur and Sydney route, which it does not have rights to, traffic dropped by 27 per cent. “The funny thing, the absolute irony is, the absolute irony – do you know where Malaysia Airlines is strongest?” said Azran. “It is domestic and Asean where they have the most competition from AirAsia. Look at their financial results. They are most profitable in domestic and Asean.” “We seem to be paralysed, not being able to make what should be a very clear decision on how we are going to catch up to our regional rivals and yet we wrestle with what seems to be ‘Oh we have to protect national interest,” said Azran. “Malaysia Airlines is not national interest. National interest is the Malaysian economy. But we still can’t make that distinction.” He also said that some 110,000 Malaysians were flying to London indirectly via other cities while some 80,000 Malaysians were flying to Sydney indirect. “The number of Malaysians going to Sydney via Singapore is growing phenomenally, more than 15 per cent per year,” said Azran adding that flights from Kuala Lumpur to Sydney via Singapore were cheaper than flying from Singapore to Sydney. “Go to the Singapore Airlines website. What they quote KL-Sydney via Singapore is cheaper than what they quote for buying a ticket from Singapore to Sydney alone. Why do Malaysians take that option? It is cheaper, they have a choice of three flights a day, they fly the A380. It hurts our country because we are being hollowed out,” he said. “Passengers flying to London are now being hubbed out of the middle east because the middle east carriers realise Malaysia has untapped demand. The number of Malaysians travelling indirectly to London is bigger than the direct flights to London.” He suggested that the government look at Singapore which stressed connectivity and choice which ultimately benefitted Singapore Airlines. “For all of Singapore Airlines successes, just about every flight that Singapore Airlines flies out of Singapore, there are alternative choices, there are other airlines that fly those routes,” said Azran. “Despite all the innovations and service quality that Singapore Airlines is known for, it is one of the most cost efficient airlines and it is 15 per cent more efficient in terms of unit cost than regional peers. So it has a cost advantage and it has a quality advantage which is a winning proposition. If Singapore Airlines were to fly to Australia, it has to compete head to head with Qantas, British Airways and Emirates, with Qatar. If it goes to Europe it has to compete with Lufthansa, British Airways, Air France.” “In contrast, Malaysia, you have an airline that flies a lot of routes that doesn’t have direct competition. It’s no surprise that Singapore Airlines has learned to innovate its business model. What the Singapore government has said is that what is important is the connectivity that Singapore as country is depending on, not ‘oh, we have to protect Singapore Airlines.’” Touching on other matters, Azran said that AirAsia X would not be able to mount more flights to Europe or fly to the US until the new A350 jets are ready starting 2015. Asked about whether long-haul budget airline is going to start flights to Paris after reportedly being given the rights by the French government, Azran said that he has yet to receive confirmation of the rights. “It has yet to land on my desk,” he said. “Until it does, we cannot initiate detailed plans.” Asked about complaints on airline review websites about AirAsia X food by Australian customers, Azran said that it was because the food on flights coming from Australia came from Australian caterers who were unable to replicate certain tastes. “No matter how hard they try, they just can’t replicate the sambal taste of Malaysian caterers,” he said. He also said that the AirAsia website will also be overhauled for a better customer experience and to enhance revenue and that he is looking at introducing new innovations to the AirAsia X menu but declined to elaborate. Excerpts of the interview: Q: What is our national policy? A: That’s the problem. The national policy framework and the decision making framework isn’t clear. It should have been crystal clear, which is — what is in it for the country? But the problem we have and one of the issues we have in this country is the dichotomy of government as policy maker vs government as shareholder. Because therein lies the conflict. Am I interested in the economy and interested in consumers or, ‘I am a shareholder of a GLC so I am looking out for the interest of the GLC’ at the expense at the expense of consumers? That is the fundamental problem. Today, if you still have policy makers, i.e. senior civil servants on the boards of these companies, you can see why there is a conflict. Then if you are on the board of the company, you want to see it succeed. The easiest way to be successful — protect lah. You can raise high fares, you don’t have to change and transform yourself, you can generate profits. But those are artificial profits, if you don’t go through the rigours of being more efficient. Q: What have you proposed to the government? A: The proposal is very simple. You have to allow airlines routes. You have to allow competition. The funny thing, the absolute irony is, the absolute irony – do you know where Malaysia Airlines is strongest? It is domestic and Asean where they have the most competition from AirAsia. Look at their financial results. They are most profitable in domestic and Asean. When you look at their latest results, domestic is a lot more profitable. Remember in the days before AirAsia? MAS was losing money on domestic routes. They needed hundreds in millions in subsidies. Now because of AirAsia and lower prices, suddenly domestic is profitable. Why? Because you have to be a lot more efficient. And guess where they want to expand. If you look at their expansion plans — where are they adding flights? Perth! Where are they cutting back flights? Sydney! It (KL-Sydney) used to be 14 times now it’s 12 times a week! Perth they are adding flights! How do you explain that when we come in, more competition and they decide to add flights? Because when there is competition, the market grows. We grew the Perth total market in 2009 by 66 per cent. If you look at Malaysia Airports data, 2009 vs 2008, last year was 166 per cent that of 2008. Sydney — it was minus 27 per cent! So what gives? Melbourne is up by 48 per cent. Q: You’ve suggested allowing competition on routes? What have they said? A: You can even say (that we should be given) routes where we are far behind Singapore and Bangkok. Doesn’t that make sense? So that’s basically what we’re saying is allow us to address segments where Malaysia is strategically behind Singapore and Bangkok. That should make sense. The response has been frankly muted because they can’t seem to reconcile what is good for the country and the need to protect Malaysia Airlines. And we really need to address Malaysia Airlines and say – what is so problematic that you can’t accept competition? And the only argument that they raise is that when AirAsia X was first raised, it was meant to be complementary to Malaysia Airlines and not competition. Does that mean you don’t want competition? Does Singapore Airlines say ‘eh – I don’t want Qantas flying, I don’t want BA flying, not at all.’ Most of Singapore routes are flown by another carrier. They don’t complain. They get better. Just ask Malaysia Airlines, if competition is so bad, how come you are better now in Asean and domestic where competition with AirAsia is really intense? It used to be KL to Kota Kinabalu, someone would have to pay RM800 and maybe about six to seven flights a day. Now between AirAsia and Malaysia Airlines, they have 18 flights per day. It has tripled the number of flights, fares have come down, and Malaysia Airlines is profitable. So isn’t that a win-win-win? Good for the customer, trade and airlines. Q: A lot of the public would tend to agree with you but what is going on with the decision makers? A: The decision makers are struggling because number one, it’s unfortunate that you have senior members of the cabinet who have experience in the aviation sector who have opted to take a stance that competition between Malaysia Airlines and AirAsia is not good. We’ve had the opportunity to present to the economic council members and cabinet and to be fair, a lot of them see the clear rationale. But don’t listen to AirAsia X, ask the minister of tourism (Datuk Seri Dr Ng Yen Yen). She has to deliver on her KPIs. She has growth targets to meet. Where does she want her planes to fly? You need planes because you can spend RM100 million on campaigns but you will get zero extra tourists if you don’t have flights. So you are spending so much money on Malaysia Truly Asia and does she want the plane to fly to Pyongyang or Seoul? Does she want the plane to fly to Sydney or Darwin? Does she want the planes to fly to key markets or small peripheral markets that we can’t even spell? It was positioned to us that AirAsia X does not bring tourists, we only bring transit passengers. Complete nonsense. Go to Tourism Malaysia websites, look at their 2009 numbers, inbound traffic. They look at bona fide tourists. Where are the biggest growth countries? Australia grew by 25 per cent. Now, Malaysia Airlines reduced their flights (to Australia) in 2009. So how did we get 25 per cent growth in inbound Australia tourists if it was not AirAsia X as no other airlines flies there? China grew, Taipei grew, UK grew, basically where AirAsia X flies. Korea — minus 15 per cent, Japan minus 7 per cent. So where we don’t fly, the market shrank. Does competition really hurt Malaysia Airlines? If competition is really bad, and we just taking away passengers away from them, why are they adding flights to Perth? Why are they now having direct flights to Brisbane? Q: One of the arguments is that Malaysia Airlines has to shoulder the burden of flying to unprofitable domestic destinations in the interior. A: That is separate. That is under MAS Wings. That is completely sheltered. There is a specific programme for that. Their choice of international travel has nothing to do with that. The sad thing is that we look at a narrow view – that it is Malaysia Airlines and it is national interest. We need to look at the big picture and say we are falling further and further behind Singapore and Bangkok. Korea — 64 flights a week from Seoul to Bangkok. Six airlines compete. Guess how many flights a week from Seoul to KL? 12! Where do you think Korean golfers want to spend their weekend? They will go to Bangkok because it is easy and flights are cheaper. And now there is opportunity because Thailand is struggling because of political instability so let’s grab the opportunity. Q: Is that why they finally allowed you to fly to Seoul? A: I think so and also because we told them that 2010 is a critical year because it is the 50th anniversary of diplomatic relations, the president of the republic of Korea is going to visit Malaysia. That helps but this is a decision that was more than a year… to decide on something that is very obvious in terms of benefit to the country. Q: Do you think that this signals a change, that they will now give you Sydney? A: I am optimistic. Number one, we are very confident that when we start flying to Seoul, people will see the benefits very clearly on both sides. We should see a reversal of the trend of negative growth in 2009 to a positive growth in 2011. And that should pave the way. Because the facts are overwhelming, it is just a matter of time. If you are trying to protect Malaysia Airlines, you are going to run out of excuses very soon. Q: I do get comments from visitors to KL that they only see Malaysia Airline planes on the tarmac and none from other countries. A: Why? That is a very good question. You know, we used to have British Airways flying here. We used to have Virgin Atlantic. We used to have Air France. We used to have All Nippon Airways. We used to have Northwest. Why? Because, they have all been lured by Singapore and we have sat down and instead of saying ‘this is a national crisis [bangs table] and we need to be better at marketing and more aggressive’, we thought ‘oh good — less competition for Malaysia Airlines.’ Q: Do you really think it is a crisis situation? A: I think it is a crisis situation, absolutely. Because the stakes are so high now. We can’t afford for the tourism sector to falter. We can’t afford for trade..Malaysia is one of the few countries where trade is bigger than GDP. We need international trade. How are we going to get international trade if we don’t have connectivity. Indirectly, the number of flights also affect decisions about where businesses should locate. That’s why most people locate in Singapore rather than KL. Because it is more convenient. A lot of economic activity comes when you have connectivity. When Khazanah National did a study, they identified that the aviation sector has a 12 times multiplier effect on the economy. For every one ringgit of revenue that an airline generates, there is twelve ringgit of impact to the economy because travellers have to use ground transportation, catering and maintenance. Q: Do you have a breakdown of how many transit passengers you carry? A: It’s not numbers we carry directly but we have numbers from government statistics that we carry anywhere from 35 to 40 per cent transit passengers on long haul flights, especially Australia. What’s interesting is that the Malaysia Airlines number is higher which is not surprising as from here they have flights going to India, to Rome, Frankfurt, Amsterdam. Malaysia Airlines numbers are closer to 45 to 50 per cent. Frankly transit also helps the economy. They still buy stuff, they still fill up the plane. Changi’s transit is more than 50 per cent. Dubai’s transit number is 80 per cent. Q: What other innovations are you looking at for AirAsia X? A: Without going into specifics, one of the new things for AirAsia as a group that is huge this year is a migration to a next generation booking engine. When that gets done, we’ll be able to introduce a whole range of new things that we are currently constrained from doing because of IT. Q: Are you happy with the progress of the new LCCT? A: I haven’t seen progress. I think it is important that a commitment was made by Malaysia Airports to get it ready by 2011 and that is about as tight as we can possibly manage. Originally it was mid-2011 and now it is end-2011. Anything beyond that will be painful. Already we are struggling with parking space. The wide body AirAsia X planes, sometimes we have to park them way on the other side of the airport and tow the plane here which takes up a lot of time and cost. As we add more planes, that exacerbates the problem. Q: What other European cities are you eyeing? A: It all depends on the planes. If we were to use existing planes, that means we have to make one stop in the Middle East. If we do one stop in the Middle East, for that same plane we can go three flights a week to Zurich or Manchester as opposed to seven flights a week to Sydney. That means you can carry 40,000 passengers a year or 110,000 passengers a year. You fly double the distance but not double the revenue. We lose out if we are told to fly to European countries until we get the A350. We’ve done our part. More than 50 per cent of AirAsia X flights are to new airports — Gold Coast, Hangzhou, Tianjin, Chengdu. We’ve pioneered a lot of routes. Q: Do you plan to take up any of the 34 cities that have been offered to you? A: No plans to take it up. It makes no economic sense. Does Maybank tell Hong Leong bank to go to South America so there is less competition?

Well there will be 3 more A333s arriving this year and SYD is still not approved. So they have no choice but to explore other routes.

MALAYSIA Airlines Cargo Sdn Bhd (MASkargo) is exploring the viability of freighter flights into the US via China, with its newly signed US-based wet lease operator. The new agreement is with US-based Southern Air for four classic freighters. MASkargo is expected to make a firm decision, by the end of June. The last time the air cargo operator had a freighter service into the US was in 2001. "The yields are better in China and it's closer, therefore operating costs are much lower. We would also be able to share some capacity with KL," MASkargo managing director Shahari Sulaiman told Business Times and Berita Harian last Friday after attending the company's MegaTonners Awards Night. With a US-based wet lease operator, MASkargo will not have the hassle of getting its airplanes Federal Aviation Administration (FAA) approved, as the aircraft would already be complying with US regulations. "The market has improved since we left it. The (local) industry has been waiting for this for many years," Shahari said. The new wet lease, replaces a wet-lease contract for two 747-400F freighters and three 747 classic freighters provided by Air Atlanta Icelandic, which expires at the end of this month. "We managed to negotiate a much more flexible deal, with better utilisation of aircraft," Shahari said. The aircraft comes with the nose door, making it easier for loading of large or irregular shaped cargo, and has higher net carrying capacity, or payload capability. The airplanes have also undergone major maintenance checks and high-time engines replacement before entry into service, to ensure that flights will be more consistent with less service disruptions. The new lease agreement expires at the end of the year. Source: http://www.btimes.com.my/Current_News/BTIMES/articles/pmk/Article/#ixzz0mAzV4dku

I think that initially MH will be operating the A380 on the KUL-SYD and KUL-LHR routes. These are their high pax density routes and the most profitable for the new aircraft. If MH wants to increase the aircraft utilisation and to better compete with AK, they might consider doing some KUL-HKG or KUL-TPE sectors too. I can't see them using the A380 on the long South African and South American destinations. I am not sure if they can fill the plane!

Frankly I am not able to see how FY can compete with AK. They just do not have the economies of scale. Every time I check ticket prices for flights from SZB, FY ends up being more expensive. So I think FY should really think hard about this project. If they plan to use the same pricing model, then their fares will not be competitive. Still, I do like the idea that MH and FY should have roles to play. I think their model is closer to the SQ-MI relationship model. As such, it should not be inconceivable that MH surrenders all its B737 routes to FY while MH focuses on operating only the wide body fleet.

What new lens were you testing Norman?

In the US, Delta is busy buying up old MD-90s because they are cheap to buy - so less strain on financing. At the end of the day, it is the Total Cost of ownership that matters. So is it cheaper for Firefly to own/lease and operate old 734s or better to go for the high cost new 738s or A322s? Only they know the numbers...

I am not sure if RMAF gives names to its aircraft anymore these days. Does anyone know if the MiG-29s and Su-30s have names?

From Business Times: Source: http://www.btimes.com.my/Current_News/BTIMES/articles/anaj/Article/

Its good to have more airlines at KLIA/LCCT. More choice for consumers if there is more competition. Similarly, SZB should also open up to all airlines so that pax have a choice to fly from whichever airport they like.

As long as the affected pax find their service useful, then they have done their job. If we really want to condemn AK and/or D7, then we should also condemn those hotels, car hire companies, taxis and other travel operators who charge exorbitant prices for their products.

SYD is a shorter route - good for getting as many flight crew to chalk up the hours. MH will also be initially flying with one aircraft. So, it can keep a SYD daily schedule but won't be able to do that on the LHR run until it has two aircraft serving that route. So I guess MH does not have that many options when they only have one or two aircraft delivered.

Hero pilots tend to lose their jobs! Look what happened to the BA pilots who landed without any engines running...

I think D7 is more ready to launch SYD that any other route. Much work still needs to be done with Seoul and we will probably need to wait a while before we hear something concrete. Meanwhile, D7 is promoting their double daily flights to MEL.

KC, I feel for you! None of this would have happened had you flown using your previous routing... Its no fun getting stranded in unfamiliar surroundings and where language is also a barrier. Did you have travel insurance cover? Maybe you can rebook the flights to come back via US and claim that on the insurance.

Russians flew in for the Polish president's state funeral. Maybe they have very strong engines or they are not afraid, like the western Europeans are!

This has been discussed in A.net forum too. It is not clear cut as this is a 4 hour flight over tropical regions rather than a 12+ hour flight over the polar route. The Trent engines on the BA plane are a different model (higher thrust). However, I believe that RR has ordered similar modifications for the Trent 700's too. I wonder if the Cathay engines have been modified.