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Mohd Azizul Ramli

MAB Signed Partnership with Emirates Effective 1 February 2016

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With such a small fleet of 15 A333s and 4 leased A350s in 2017 (to replace the A380s), MAS will not even be a makor regional player in the market.

CM was brought in to stop the heavy losses and turn MAB into a profitable business. He is only starting the first part of that brief. MAB's business needs to be stabilised first, hence the cuts. Once the business has stabilised, expansion on a sustainable basis can then the carried out. Just look at what happened at JAL and Qantas - they have turned around from making big losses. Now, after cutting their aircraft and staff, these two airlines are making profits again.

 

MAB has to be careful though - it has to turn around quickly. Some of our ASEAN neighbours have very ambitious planes, e.g. Vietnam Airlines. They might become a threat to MAB in the coming years.

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MH/EK agreement is something that was unforeseeable/unthinkable just months ago, yet now it happens. What next?

 

CM was brought in to stop the heavy losses and turn MAB into a profitable business. He is only starting the first part of that brief. MAB's business needs to be stabilised first, hence the cuts. Once the business has stabilised, expansion on a sustainable basis can then the carried out. Just look at what happened at JAL and Qantas - they have turned around from making big losses. Now, after cutting their aircraft and staff, these two airlines are making profits again.

 

MAB has to be careful though - it has to turn around quickly. Some of our ASEAN neighbours have very ambitious planes, e.g. Vietnam Airlines. They might become a threat to MAB in the coming years.

 

Nothing is cast in stone and CM won't stay with MH forever. If GLC corporate culture is any reference, next CEO or 2nd CEO after CM may render MH/EK agreement to the back burner.

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It would be very difficult for MAB to return back to its previous european routes and even some of its australia market once it is truned around and show some profitability. This is because in the interim other MEA airlines will be further entrenched into the Malaysia-Europe routes and esp for Emirates. Then there are other asian ailines who will be picking up the slack from MAB. It will be a real struggle for MAB to grow itself in the medium and long haul.

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So be it. What important is to run a PROFITABLE operation.

 

There's no point flying to 1000 destinations on big aircraft for pride and glory if it makes billion of losses year after year. Aren't we all tired of MH's old shenanigans?

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It would be very difficult for MAB to return back to its previous european routes and even some of its australia market once it is truned around and show some profitability. This is because in the interim other MEA airlines will be further entrenched into the Malaysia-Europe routes and esp for Emirates. Then there are other asian ailines who will be picking up the slack from MAB. It will be a real struggle for MAB to grow itself in the medium and long haul.

Do you remember the days when BA, SQ, QF, LH, PA, etc. ruled the skies and there was no such thing as the ME3?

 

There was also once upon a time when all Malaysia had was MAS - a big, monopolistic and expensive airline to fly on. But look at what we have today? So much more choices from airlines which never existed in 1972.

 

It just proves that everything is dynamic and nothing remains static or entrenched. What goes around. comes around. I read that JAL is now looking to expand its routes to the US. It is expanding again and they are re-evaluating their network. Philippine Airlines has expanded its international destinations tremendously the past three years.

 

Yes, MAR is 100% correct - focus and running an efficient and profitable business. Do the basics right and do it right the first time. When a business is profitable year in, year out, management will not have to do fire fighting but plan its strategic moves to improve it.

 

Once MAB is consistently profitable, like Emirates, SIA, etc. - there should be no problems flying to super duper prestigious destinations. In fact, its customers will start demanding that once their confidence in the airline is restored.

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So be it. What important is to run a PROFITABLE operation.

What is even more important is to run a sustainably profitable sustainable operation :)

Recall, it wasn't that many years ago that the airline was able to announce record breaking (quarterly) profits resultant of someone's "Business Turnaround Plan - The MAS Way"

And even before that, there were the heady days of Mr 019 when it seemed ..... well, even the sky wasn't any limiting factor back then :)

Edited by BC Tam

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I almost forgot - when MAS and SIA started out in 1973, their fleets were much smaller that what MAB has now. Over the years, more aircraft were added. Airasia started with two old planes - they have grown to today's size because they were consistently profitable. Profits are the lifelne of every commercial entity - a company without profits won't last long.

 

One of the reasons why Khazanah set up MAB as a 100% new company is so that they can build the business from scratch and not carry over the bad stuff from MAS. That company is a gone case, and it will be too difficult to fix it in a reasonable amount of time. With a new company, everything will be new. Let CM do his job and let MAB establish itself. Lets see where the will be in a few years.

Edited by flee

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One of the reasons why Khazanah set up MAB as a 100% new company is so that they can build the business from scratch and not carry over the bad stuff from MAS. That company is a gone case, and it will be too difficult to fix it in a reasonable amount of time. With a new company, everything will be new. Let CM do his job and let MAB establish itself. Lets see where the will be in a few years.

Therein, if I may opine, lie a few fundamentals as to why we should not compare JL's and QF's turnaround in fortunes with MH's attempt too seriously :)

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Aren't we all tired of MH's old shenanigans?

 

Respectfully - i'm not.

 

I've run the math, and depending on which collective a particular individual belongs to - you could end up worse or better. Note: You can also belong to multiple groups - and in fact, most of us likely do.

 

One particular collective i belong to "bargain hunter" - ends up much worse off with the restructure and tie up with EK.

 

The other collective i belong to "malaysian tax payer" - only ends a very tiny increment better off, certainly nowhere near enough to compensate for the "loss" incurred from being a member of the "bargain hunter" gang.

 

 

There are many ugly things coming that the bargain hunter in me doesn't like.

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CAPA's analysis on the partnership.

 

Malaysia Airlines has forged an extensive codeshare partnership with Emirates as it further restructures its long haul network. The flag carrier is suspending services to Amsterdam and Paris, leaving it with only two destinations outside the Asia Pacific region (London Heathrow and Dubai), and will rely on Emirates to provide offline access to continental Europe, Africa, the Middle East and the Americas.

Malaysia Airlines is increasing its focus on regional operations. It will reschedule domestic, and some short haul international, flights to connect better with Emirates, its own restructured network and other partners. Under the revised regional operation the carrier plans to open seven bases in secondary cities throughout Malaysia, enabling it to reduce costs, improve utilisation of its 737 fleet and launch new point to point routes.

The new, still unfolding, strategy at Malaysia Airlines repositions the flag carrier to focus on the Asia Pacific region, where there is rapid growth, and there are opportunities to feed partners. Malaysia Airlines is right to recognise that it is unable to compete effectively against Gulf carriers on long haul routes to Europe, making a partnership with a former rival the only sensible option.

 

Full analysis: http://centreforaviation.com/analysis/malaysia-airlines-post-restructuring-strategy-evolves-with-emirates-partnership-new-domestic-bases-256263

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"Malaysia Airlines will be suspending its Kuala Lumpur-Dubai route by 15 February and will re-accomodate passengers on its codeshare flights with Emirates," Mueller said.

 

http://www.theedgemarkets.com/my/article/malaysia-airlines-emirates-announce-codeshare

Mh don't even get to share a piece of cake and has become a ek ticketing agent, else it will be anti climax if one is transferred from ek to mh aircraft. Edited by KK Lee

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Soon MH will terminate KUL-AKL route ...... ?

 

If this ever materialised (which seems quite likely to be honest), it most probably will be replaced by a new EK DXB-KUL-AKL vv flight.

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So they won't even use their own metal to DXB??? Seems silly... Or perhaps this is the beginnings of a takeover by EK

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MAB is now really a General Sales Agent for Emirates with a more bigger commission than normal.

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"As part of its business transformation to return to profitability in 2018, Malaysia Airlines will now refocus its network more heavily on Asia and use airline partnerships to serve many of its long-haul markets outside the region."

Read more: http://www.theborneopost.com/2016/01/25/malaysia-airlines-emirates-alliance-seen-as-smart-move/#ixzz3yFEtHPbI

 

As in focusing on Asia routes by expanding with more frequencies or more Asian destinations?

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