Australia and Malaysia Need to Negotiate Expanded Bilateral Agreements

[flee 5]

The Australia-ASEAN market facing the biggest constraint is Australia-Malaysia. Malaysia Airlines (MAS) and AirAsia X are eager to expand in Australia but face frustrating limitations which inhibit further expansion to Australia’s four major cities.

Malaysia is the second biggest Southeast Asian market for Australia after Singapore, whose carriers enjoy unlimited access to Australian destinations. Malaysia is the sixth largest international market overall for Australia and the largest market not served by an Australian carrier, which provides somewhat of a disincentive for the Australian side to negotiate a new bilateral. But more service from Malaysian carriers would have a positive economic impact, particularly for Australia’s tourism sector.

Full analysis:

http://centreforaviation.com/analysis/australia-needs-to-negotiate-expanded-bilateral-agreements-with-malaysia-and-the-philippines-105756

[Mohd Azizul Ramli 2]

The routes to Australia have always been a MH forte. When MH announced their intention of purchasing 6 A380s back in 2003, it was undeniable that the aircraft is destined to serve the airline's flagship Kangaroo routes. LHR and SYD looked solid to secure the A380s. It was smooth sailing for MH, having almost a complete monopoly on the Malaysia-Australia market despite some short-lived little competitions from OS and JQ, until 2 November 2007 when D7 first took off to OOL.

 

D7 changed the game completely. Routes to Australia become much sought after. D7 has since launched services to all major Australian gateways with the exception of BNE. It was a big cheer when D7 is finally awarded the much protected SYD route on 2 April 2012. It is reported that the airline will commence ADL soon too.

 

In the mean time, another foreign player, EK, entered the foray on the KUL-MEL route.

 

Then as more A380s arrived, SYD and MEL were heavily lobbied to be assigned with the aircraft. But when the final A380 was delivered, MH came out with a rather shocking announcement that the A380s will not be deployed to Australia at all. Forum members became furious. MH is accused of being short sighted and lacking business senses.

 

Through routine debate in some related threads, an esteemed pro-MH forumer, Suhaimi Fariz, came out with an eye opening hard evidence:

 

 

Much to our dismay, the current flights operated by Malaysia-based airlines namely MH and D7 to SYD, MEL and PER have reached maximum capacity allowed by the existing bilateral. And it is then understood (although never being made public) that this is the very reason on why MH could not deploy its A380s to SYD and/or MEL even through the demand might warrant it.

 

CAPA is running an interesting article about this crucial matter:

http://centreforaviation.com/analysis/australia-needs-to-negotiate-expanded-bilateral-agreements-with-malaysia-and-the-philippines-105756

 

We are now pushing for the bilateral to be revised. Hopefully the relevant authorities will get this matter fixed fast for the benefit of the Malaysian aviation industry as a whole.

 

 

EDIT: This post was meant to be a thread starter but Flee beat me to it.

[Y. J. Foo 0]

If the amended agreement goes through will we finally see MH deploying A380 flights to SYD MEL?

[Mohd Azizul Ramli 2]

I did my own calculation, which I think is easier to comprehend than CAPA's:

 

 

With only about 908 weekly seats remaining under the bilateral, there is only room for 1 more daily 3/4 loaded B738/A320 flight.

[flee 5]

The CAPA article states that the EK seats are not included in the bilateral.

 

All these seats are provided by Malaysian carriers except for Emirates, which provides about 2,600 weekly seats as part of its daily Melbourne-Kuala Lumpur service. These seats, as well as the approximately 2,000 weekly seats to Adelaide from MAS and approximately 1,900 weekly seats to the Gold Coast from AirAsia X, are not counted under the cap set by the Australia-Malaysia air services agreement.

[sweekee 0]

I did my own calculation, which I think is easier to comprehend than CAPA's:

 

 

With only about 908 weekly seats remaining under the bilateral, there is only room for 1 more daily 3/4 loaded B738/A320 flight.

 

MH only operate 10 weekly flights on route KUL-PER

[Johan Z 0]

I did my own calculation, which I think is easier to comprehend than CAPA's:

 

 

With only about 908 weekly seats remaining under the bilateral, there is only room for 1 more daily 3/4 loaded B738/A320 flight.

 

in total? (excluding ADL, which was not included in the bilateral agreement) That's not much

[Josh T 0]

Maybe this is why MH is considering a 2nd weekly flight between PER and BKI or starting the once weekly PER and KCH flight.

 

If the bilateral agreement does get revised, MH will need to order a couple more A380s in order to send them to SYD and MEL at least once a day.

[Mike P 0]

in total? (excluding ADL, which was not included in the bilateral agreement) That's not much

 

ADL has been overlooked here, MH launched the brand new A330 to ADL daily and all A330 on the Australian routes.

[Kris Kim 0]

Maybe this is why MH is considering a 2nd weekly flight between PER and BKI or starting the once weekly PER and KCH flight.

 

If the bilateral agreement does get revised, MH will need to order a couple more A380s in order to send them to SYD and MEL at least once a day.

 

MH would need 1 A380 each for MEL & SYD rotations, however they would only need 0.5 of a frame if combined with a LHR or CDG rotations, but it does depends on which of the 2 daily flights MH choose for both MEL and SYD, the proposed MEL A380 flight was the late night departure exMEL, which didnt have a long layer compared to the afternoon departure flight which had around 6.5~ Hours rest.

 

I'll also mention here, if D7 & MH have used up all the given capacity, then how is D7 going double daily to MEL in October, its already loaded into their system, I believe.

[KK Lee 5]

The CAPA article states that the EK seats are not included in the bilateral.

 

Does it mean capacity is available for MH to send A388 to SYD?

[Waiping 12]

Guys I did a check just now and believe the BKI - PER route has been suspended, again.

[jahur 0]

Guys I did a check just now and believe the BKI - PER route has been suspended, again.

Once a week flight i check flights for MH121. Flight is still available for online booking up to september every sunday.

[KK Lee 5]

Once a week flight i check flights for MH121. Flight is still available for online booking up to september every sunday.

 

Once a week flight is only sustainable with holiday chartered.

[ingwen 0]

D7 to move next??

 

http://www.theage.com.au/victoria/airport-set-to-fly-into-the-big-time-20130421-2i8h6.html

[flee 5]

D7 to move next??

 

http://www.theage.com.au/victoria/airport-set-to-fly-into-the-big-time-20130421-2i8h6.html

D7's operations to Australia is doing very well. No real need to upset its current setup.

 

I believe they are working on starting flights to Adelaide and increasing frequency to Gold Coast at the moment.

[Kris Kim 0]

D7's operations to Australia is doing very well. No real need to upset its current setup.

 

I believe they are working on starting flights to Adelaide and increasing frequency to Gold Coast at the moment.

 

I agree, if D7 is doing great out of MEL, then it should stay, MEL charges are the cheapest of any capital city Australian airport. No need to make the passengers suffer and make them travel 2 hours to Melbourne CBD.

 

I for one would definitely avoid D7 if they were to fly out of AVV. MH & EK would be laughing and have a party if D7 shifts over.

[Kris Kim 0]

 

AirAsiaX, which had talks with Avalon in 2007, said it was now entrenched with Melbourne airport and is not looking to move. The airline has daily flights into Melbourne and Sydney from Kuala Lumpur and less frequent services to Perth and the Gold Coast. On Monday, the budget carrier also announced it will launch four flights a week between Darwin and Bali.

 

http://www.bordermail.com.au/story/1450902/eu-ban-on-cebu/?cs=34

 

D7 isn't going anywhere, they are happy at MEL!

[Mike P 0]

D7's operations to Australia is doing very well. No real need to upset its current setup.

 

I believe they are working on starting flights to Adelaide and increasing frequency to Gold Coast at the moment.

 

Before more capacities could be opened up, I don't think it could be materialised any soon.

[Johan Z 0]

Before more capacities could be opened up, I don't think it could be materialised any soon.

 

Gold Coast and ADL are not under the bilateral. So D7 and MH can increase their flights to these two any time.

[flee 5]

The original CAPA article above:

 

AirAsia X is limited to launching Adelaide and growing at Gold Coast

 

AirAsia X continues to focus on Australia, which to date has been the carrier’s most profitable market, as it rapidly increases its fleet. But the carrier will be unable to expand much beyond its upcoming northern hemisphere summer schedule, which includes 12 weekly flights to Melbourne, 11 to Sydney and seven to Perth. (Kuala Lumpur-Perth is being reduced from a current nine weekly flights, while Melbourne and Sydney are being increased from seven weekly flights.)

 

AirAsia X is now looking at expanding in Gold Coast, which it currently serves with five weekly flights, and launching service to Adelaide, which also falls outside the bilateral. The carrier has the capacity and is keen to significantly expand its Australia operation as it grows its fleet from nine A330s currently to 16 by the end of 2013 and 23 by the end of 2014. Ideally it would add capacity to Sydney, Melbourne and Perth as well as launch new routes from Malaysia and Thailand, where it is working towards establishing a second base and affiliate with Australia a key target market.

 

But constraints in the Kuala Lumpur-Sydney/Melbourne/Perth market could force AirAsia X to focus expansion on other Australian routes or outside Australia entirely. The airports and economies of Sydney, Melbourne and Perth would be adversely impacted.

 

The introduction and rapid expansion of low-cost services in the Australia-Malaysia market has stimulated demand and significantly grown the market, to the benefit of Australia’s tourism sector. Australia should recognise the value of additional flights and accept requests from Malaysian authorities to extend the bilateral.

[Kenn Leong 0]

Hi Guys,

 

I understand that MH is now flying A333 between SYD and KUL. However when I put in a dummy booking for March 2014 there is a flight daily that has the 777-200??? Have they changed their minds again?

 

Cheers,

K.

[Mohd Suhaimi Fariz 2]

Hi Guys,

 

I understand that MH is now flying A333 between SYD and KUL. However when I put in a dummy booking for March 2014 there is a flight daily that has the 777-200??? Have they changed their minds again?

 

Cheers,

K.

Probably an upgauge due to peak demand for that period.

[Kenn Leong 0]

ok thanks

[Mohd Azizul Ramli 2]

Probably an upgauge due to peak demand for that period.

 

Peak demand? But the seats number on the A333 is more than on the B772 (283 seats on the A333 vs 282 seats on the B772). Technically it should be a downgrade by 1 seat.