MH to discontinue ARN/EWR - is it a good idea?

[Izanee 0]

From Bernama.com:

 

September 20, 2006 12:20 PM E-mail this news to a friend Printable version of this news

 

US & Swedish Cargo Agents Worried Over MAS' Route Discontinuation

 

By Manik Mehta

 

NEW YORK, Sept 20 (Bernama) -- Cargo agents and general sales agents of Malaysia Airlines (MAS) operating in the United States and Sweden are worried over the airline's plan to discontinue service from Kuala Lumpur to Newark via Stockholm.

 

Cargo agents and GSAs from Sweden and the USA at the recently held Air Cargo Forum in Calgary, Canada, said that the service would be discontinued from mid-January 2007.

 

Some U.S. cargo agents present at the Calgary event were privately saying that it did not make any "business sense" to discontinue the service to Newark which is a lucrative market for passenger and cargo traffic.

 

At present, MAS transports cargo to Stockholm and Newark in the belly of passenger planes flying to these destinations.

 

Some agents said that the decision was "myopic" while it may initially contribute to a moderate savings, in the long run it would be a big loss for MAS not to fly to the east coast of the United States.

 

"This could possibly be a fatal decision, particularly in the age of globalisation when everybody wants to be in North America. Look at Singapore Airline, Thai Air, Emirates and others who are scrambling to the east coast and increasing their flights. Should MAS decide to come back later after realising it had been a mistake to withdraw from the US, it would have lost its foothold in the market which has so many competitors. I cannot understand the rationality behind the MAS decision," said one agent who requested anonymity.

 

The Port Authority of New York and New Jersey, which manages the two airports, is closely watching MAS' moves.

 

A spokesperson of the PANYNJ said that her organisation was "monitoring" the situation and "would do all that was possible to retain Malaysia Airlines".

 

The Swedes are even more worried.

 

Stockholm airport, for example, has been courting the Malaysian authorities since a year in behind-the-scene activities, offering all kinds of facilities if MAS decided not to give up its Stockholm stopover en route Newark airport.

 

Mats Sigurdson, the director of Aviation Marketing of Sweden's LFV Airport Group, which is responsible for 17 airports in Sweden, including Stockholm, was perplexed at the reasons for MAS' discontinuation of the Stockholm-Newark route.

 

In an interview given to this correspondent in Calgary, Sigurdson explained why MAS should use Stockholm to fly to the USA in the West or to Kuala Lumpur in the East.

 

"If you want to go to Kuala Lumpur via Europe from the United States, it would take you an additional six hours from other European airports. MAS is a prestigious customer for us, and we would like to retain it at Stockholm," he said.

 

But Sigurdson said that he was surprised that his organisation was not yet informed about the planned discontinuation of the Stockholm-Newark service, although he knew for a fact that Swedish travel and cargo agents had been notified about the planned stoppage of the service effective mid January 2007.

 

"Swedish travel agents were informed about the discontinuation and told to re-book passengers flying to Kuala Lumpur from January 14 next year," he maintained.

 

Sigurdson and his colleagues visited Kuala Lumpur last November when he had informally come to know from third parties about the move to stop the Stockholm service.

 

Indeed, the Swedish side has also been talking to the Malaysian ambassador in Stockholm to use his good office to stop MAS' withdrawal from the Stockholm route.

 

The Swedes are waiting for a response from the Malaysian side to open up the dialogue.

 

The Swedish side has agreed to provide incentives such as reduction of start and landing fees, passenger rates and other charges.

 

"We have even agreed to renounce our standard passenger fee of 111 Swedish krones," he said.

 

"We are, of course, not happy to lose a prestigious airline such as MAS. However, we are wondering why Swedish agents were informed and not the Swedish aviation authorities or the airport which is, in fact, directly affected by the decision," he said.

 

"Speculation is a source of uncertainty. It is therefore better for both sides to talk directly to each other rather than rely on third party speculation. We are always open to discussing further with Malaysia Airlines and other Malaysian authorities."

 

Malaysia, he added, is a popular destination both for Swedish leisure and business travellers, and there is good potential to develop the cargo business both from the United States and Sweden.

 

He also pointed out that because of the well-established feeder service from Stockholm airport to as far as the Baltic states, Malaysia Airlines could develop a the well-knit distribution service in Northern Europe and the Baltic region.

 

After all, he claimed, Thai Airways has been doing well and is also increasing the number of flights from six to seven a week.

 

Besides the Swedish tourism industry, Swedish businesses and industry were also interested to retain MAS at Stockholm.

 

-- BERNAMA

 

[Mohd Idham 0]

hhmm..I think LAX route one just enough for America route..no need to EWR anymore..

[H Azmal 0]

hhmm..I think LAX route one just enough for America route..no need to EWR anymore..

I'd be interested to know your justification for that.

 

Are we going back to the 1970s? I don't understand the rationale of pulling out of the gateway to the Eastern US. And as is obvious from this article it's not like that there is no demand for services there. Of course, I'm not the one handling the finances so I wouldn't know. Still, I think it's a big shame when all other carriers from this region are already flying there and we're actually retreating.

Edited September 21, 2006 by H Azmal

[Tamizi Hj Tamby 1]

EWR and ARN to be axed out by MH?

 

I don't think it's a good idea.As many asian carriers are racing to the east coast of USA,MH is deciding to pull out from the East Coast.

 

Just imagine,if any passengers who wished to go to the East Coast,were had to disembark at LAX,and later onboard other carrier.Is that way unpractical?

[Pieter C. 5]

Just imagine,if any passengers who wished to go to the East Coast,were had to disembark at LAX,and later onboard other carrier.Is that way unpractical?

 

Passengers can still use another routing with 1 stop between KUL and NYC, like EK via DXB or KL via AMS; agree, no change of planes for the MH ARN route, but still .....

[Izanee 0]

other airlines can make it work....why can't MH? SQ can do it...using lots of malaysian passengers i'm sure. you can't offer 3xweekly services when other airlines offer 3xdaily services. its just not gonna work.

 

i agree with what they say in the article - short term savings equal long term losses..

 

 

 

[Seth K 3]

other airlines can make it work....why can't MH? SQ can do it...using lots of malaysian passengers i'm sure. you can't offer 3xweekly services when other airlines offer 3xdaily services. its just not gonna work.

You can just say thia and that, but the job to be done is hard. Today, talked to some kids from Europe and US, 100% came here by SQ via SIN. This showed that the're market for MH everywhere, just they don't seem to grab the oppurtunity real fast, such as using newer aircraft and updated services(get rid of those 734 and 330 junk). They also can start add more frequencies especially to cities that pax final destination would be via KUL. Other than that, lower the fare cuz ain't nobody wanna pay more for less.

 

Regarding to the articles, if MH wants to stop ARN and EWR, go ahead, for cargo agents, their cries just because of money, they don't care how the airline doing, but just the money flow from MH. Well, MH certainly don't hv much cargo compare to other airlines fly to Sweden and New York

 

Just two cents

 

Passengers can still use another routing with 1 stop between KUL and NYC, like EK via DXB or KL via AMS; agree, no change of planes for the MH ARN route, but still .....

Looks like those the options for now for EWR/KUL bound pax...which I trongly believe most will go to SIN first

 

EWR and ARN to be axed out by MH?

 

I don't think it's a good idea.As many asian carriers are racing to the east coast of USA,MH is deciding to pull out from the East Coast.

Not sure about Asian racing to East Coast cuz they hv speed limit Just kidding, I think most Asian racing to West Coast........East Coast also boosting but West Coast got to be at rapid rate

[Leo 0]

I would say everything have 2 sides. Of cause as normal people we will say this it is bad as pax will lose connection toward the east cost of US. Too bad for us. But at another side airline with any route that can't bring profit, they will chop it down. They only think of profit, they will not think of pax limitation to travel to east cost of US is not their fault. If they can't earn money no one will give them compensate for their lost.

 

As for me, any route that can't bring profit for MH, chop it down. I support this idea as this is not the time to be proud to have MH fleet to be in NYC but at the expense of the company. When there is a demand then at that time MH fly back will be better.

Edited September 21, 2006 by Leo

[Isaac 0]

I think instead of suspending the route, they should re-route it to somewhere else, probably MUC or AMS, using 772 with daily flight.

[Keith T 2]

I think instead of suspending the route, they should re-route it to somewhere else, probably MUC or AMS, using 772 with daily flight.

 

Fifth freedom rights out of Europe are a bitch to obtain though.

[Ruiz Razy 1]

I think the biggest error was when the KUL - DXB - EWR route was rerouted via ARN instead of DXB. And to add things worse the timing from KUL!

 

And now EK is operating 3 flights daily to JFK! ... with high loads at the front end of the AFT ( premium pax.)

 

MH could still compete as MH flies to EWR. Plus EWR offers greater US / Canadian connections; which could easily be tied with CO.

 

In fact,MH could have operated daily with 772 or maybe 744/74E. 744/74E maybe a better option as 744 will normally be a better option than EK's 345.

 

 

ARN and other smaller EUR stations like VIE / MAD .....etc. could only work with MH on smaller size aircraft with lower operating costs...... this is where 787 coulod do the job. The flight operations could be seasonal during holidays only, similar to the KUL - BAH -KWU route.

 

 

[Isaac 0]

Fifth freedom rights out of Europe are a bitch to obtain though.

If my memory serves me correctly, MUC already gave their 'green light' for the 5th freedom rights to EWR when MH announced their plan to switch the EWR stop to EU from DXB along with VIE.

 

[Sanjay Thaker 0]

Not a good idea...flights between ARN and KUL are almost full all the time due to the lack of presence of SEA carriers there...besides THAI...however between ARN and EWR...there really isnt much of a need for a first class, hence the 772 being used most of the time...via DXB from what i heard the reason it was cancelled was because the UAE port authorities were giving them a hard time by increasing certain fees...and stuff like that (not sure exactly what) for their DXB-EWR-DXB flights...i think we cant really speculate that they made a wrong move or they're making a wrong move coz theres a lot more goin on between MAS and the foreign port authorities including Govts than we know of. For instance, when MH picks up pax from Indian airports and fly them via KUL to another city (eg: LAX), MH has to pay certain amount of loyalties to AIR INDIA. Yet they dont mind doin it, coz the pax load is still high and yes in addition, they also need to have AI's code incorporated in the flight..do you really think MH wants to have a code share with AI for flights to LAX? Maybe it brings a lil more pax..but they still can do it without AI's name..but..requirements remains requirements..

[Keith T 2]

If my memory serves me correctly, MUC already gave their 'green light' for the 5th freedom rights to EWR when MH announced their plan to switch the EWR stop to EU from DXB along with VIE.

 

KUL-MUC-EWR would be viable if served daily - big business market there.

Not sure about VIE.

 

[Seth K 3]

KUL-MUC-EWR would be viable if served daily - big business market there.

Not sure about VIE.

KUL-VIE-EWR will work perfectly when Austrain pull out this March. Quite a lot of Austrian I saw here at KL, even my neighbor Austrian . MH from MUC to USA will hav a hard time because LH already have quite a lot of flights direct to most cities in US whereelse MH only to EWR plus other US airlines from varies cities to Germany vv. KUL-VIE will make tonnes of money and VIE>>EWR not quite sure

[Keith T 2]

KUL-VIE-EWR will work perfectly when Austrain pull out this March. Quite a lot of Austrian I saw here at KL, even my neighbor Austrian . MH from MUC to USA will hav a hard time because LH already have quite a lot of flights direct to most cities in US whereelse MH only to EWR plus other US airlines from varies cities to Germany vv. KUL-VIE will make tonnes of money and VIE>>EWR not quite sure

 

SQ FRA-JFK works very well though.

Big business market on the Germany-USA sector. VIE is a relatively small market.

But regardless of where they stop, the frequency needs to be at least daily to begin with.

Edited September 23, 2006 by Keith T

[Isaac 0]

Currently LH has 1x daily 343 (3-class) between MUC & JFK, and 1x daily Privatair flight (on behalf of LH in all Biz) also, if i'm not mistaken. I believe the O&D market between MUC & JFK is huge enough to sustain a double daily 343/772 size of aircraft.

 

If MAS offer a flight schedule similar to that of SQ (SQ's FRA/JFK), i'm sure MAS can get lots of high yield up front passengers.

[Seth K 3]

LH to USA cities:-

 

LAX

SFO

DEN

MIA

ATL

ORD

BOS

DTW

EWR

JFK

CLT

PDX

PHL

DFW

IAH

IAD

 

They cover two airports in New York

 

Edited September 23, 2006 by Seth K

[LeeCH 0]

Sometimes I cannot understand. How can SQ consistently fill up its A345 and B744 flights to the brim with many left stranded on standby lists and MH strugle to fill up its seats. It can only make SQ look even better and also help fill up even more seats on the SIN-KUL shuttle flights.

[KK Lee 5]

 

MH never had their departure or arrival time rights at EWR, and infrequency couldn’t attract premium travelers. Hence, never make money on this sector.

 

 

[Seth K 3]

MH never had their departure or arrival time rights at EWR, and infrequency couldn’t attract premium travelers. Hence, never make money on this sector.

Frequency has got to be the main problem for MH, some holiday seasons are short, so the vacation schedule is tight, pax will book on the day they plan or fly ASAP, with MH lack of this, there are other better options. For biz pax, they will book immediately on the seconds they want, the agent looking for short flying time and most definately the earlier flights Perhaps 787 will solve all this matter

[Isaac 0]

Frequency has got to be the main problem for MH, some holiday seasons are short, so the vacation schedule is tight, pax will book on the day they plan or fly ASAP, with MH lack of this, there are other better options. For biz pax, they will book immediately on the seconds they want, the agent looking for short flying time and most definately the earlier flights Perhaps 787 will solve all this matter

Agreed. A leisure traveller like myself will also choose to travel with airlines that offer daily flight when buying ticket. Unless the airline that with only few flights a week offer some really dirt cheap fare.

 

[BC Tam 2]

Sometimes I cannot understand. How can SQ consistently fill up its A345 and B744 flights to the brim with many left stranded on standby lists and MH strugle to fill up its seats. It can only make SQ look even better and also help fill up even more seats on the SIN-KUL shuttle flights.

Lee,

If it makes you feel any better, you're not the only un-understanding one amongst us !

Not only SQ at SIN I'm sad to say, some of us here in EM are quite receptive to travelling all the way to HKG to connect to 'rest of the world' rather than travel on MH via KUL. Even BWN on BI is an option.

Have I made it more difficult to comprehend life ?!!

[Pieter C. 5]

Perhaps 787 will solve all this matter

 

how do you mean exactly ?

 

[Sandeep G 1]

how do you mean exactly ?

 

heheh i'm as stumped as you are Pieter.. but maybe Seth is referring to the 787 as being an efficient aircraft for high frequency, point-to-point flights as advertised by Boeing??? But then I am reminded about MAS now firmly applying the hub-and-spoke model in scheduling..

 

Seth, do you mean to say that MAS should use the 787 to EWR?? I think the LR version is some years away. Why not the 772LR? or the A350XWB?