MAS CEO prefers code-sharing over joining Alliance

[Pieter C. 5]

The following was published on the Dutch Aviation website Luchtvaartnieuws, and I'll translate this for you guys now:

 

06-11-2007

 

KUALA LUMPUR - The big question for MH is whether to join an Alliance or not. CEO Idris Jala will keep the door open a little, but forecasts joining an Alliance not feasible for the next 5 years. "Only if there will be sufficient efficiency, both operationally or financially, we will think about this, he said at a meeting in Kuala Lumpur.

 

For the time being, MH is looking more into opening more destinations by their own and the intensivying of code-share agreements.

 

The current destination in the US will stay the same till 2011 with the same frequencies. No changes to the South-American network will take place either, although MH is looking for expanding the route to Buenos Aires together with code-share partner South African Airways.

 

The same applies to the New-Zealand market. Here, MH will not change too much either to the network, although it will seek expansion of the current cooperation with the Australian company Virgin Blue to the NZ market.

 

New partners in Europe and Asia:

In principle no new European destinations will be added, but MH expects to announce another airline-partner shortly. It currently cooperates with KLM, Alitalia and Bmi.

The biggest expansion will take place in Asia, where talks of cooperating with a Chinese airline have almost been finalized.

Details of this will be announced in December 2007. After that, MH hopes to introduce a candidate airline for optimizing the number of flights to India.

 

In the Middle-East, the cooperation with both Gulf Air and Qatar runs according to plan, but there too, MH is looking for another partner to help to represent the airline better in that area, according to Jala.

 

so, guys, no ST for the time-being

IMHO, and just guesses are: Chinese airline will be CZ, European airline will be AF, Indian airline will be Kingfisher and M-E airline will be ME: what do you think ?

 

 

 

[V Wong 0]

... CEO Idris Jala will keep the door open a little, but forecasts joining an Alliance not feasible for the next 5 years. "Only if there will be sufficient efficiency, both operationally or financially, we will think about this...

 

 

I thought MH was lobbying hard for ST membership? What went wrong? Having been shunned, now changing the tune to appear as if MH is above joining any Alliance at the moment.

[BC Tam 2]

Well, you've got to give those other ST members a bit of time to attain "5 Star status with LCC costs" to address compatability issues with MAS. And 5 years is very generous, no ?

[Seng Lim 0]

These are some of the reasons I could think of:

To save face (after being rejected by ST for membership).

To save on the annual ST membership fees.

To save the hassle - code share agreement is easier & faster to enter.

etc etc

[Kenn Leong 0]

Actually i'm not too fussed with MH not being in Skyteam. Would prefer to be in Oneworld! But i guess it won't happen. Oh well......

[S V Choong 4]

although it will seek expansion of the current cooperation with the Australian company Virgin Blue to the NZ market.

 

Virgin Blue's trans-Tasman arm, Pacific Blue, has already flew for a few years between NZ and Australia. On 12 November 07, which is just a few days away, Pacific Blue will kickstart their NZ domestic flights between Auckland, Wellington and Christchurch using 737-800s.

[Azuddin 1]

At MAS current status, I actually agree with this, as skyteam is climbing up for the better.

[Keno Omar 0]

AerLingus was asked to leave Oneworld when they transformed their european operations into a LCC. MAS is heading toward dangerous zone with this 5 star at LCC cost crap, who would want them now??

[Izanee 0]

so Pieter - any inside news on whether MH is being shunned or otherwise?

as said above - MH is trying to save face. imagine - ST takes so many smaller airlines in africa/europe but a large important airline like MH with good links to Australasia (+ hub with plenty room for expansion) gets kicked in the nuts.

 

how much more shame can they take?

good time to bow out gracefully....

 

 

[Guest Michael]

Well if code sharing is working out we may as well stick with it I say.

[Izanee 0]

doesn't look like it is Michael -

VIE - MH pulled out, followed by OS

ZRH - MH pulled out

AMM - RJ pulled out

IST - TK pulled out

LHR - VS agreement ended

NGO - MH pulled out

 

The only significant operations are AMS-KUL-OZ/NZ-KUL-AMS - also AMS-UK/Scandinavia-AMS; and LHR-regional UK-LHR (with BD); KUL-BKK-KUL; KUL-HKG-KUL

 

That's not enough to make KUL a major hub rivalling SIN (forget BKK,HKG - they are way ahead). If we're not lucky - CGK's pax will increase at a greater rate (mostly due to domestic traffic) - we are already >2 million pax/year behind them.

[Pieter C. 5]

so Pieter - any inside news on whether MH is being shunned or otherwise?

 

No idea really, Izanee...

 

Guess, it's better for MH to have 'their home in order' first before joining any Alliance

 

I know, ST entry 'rules' are quite strict, hence the relatively small number of member-airlines...

 

Just look how long it took CZ, before they actually could join ST

[Guest Michael]

I am so looking forward to 3rd quarter results coming out soon.

[Keith T 2]

Guess, it's better for MH to have 'their home in order' first before joining any Alliance

 

I know, ST entry 'rules' are quite strict, hence the relatively small number of member-airlines...

 

In addition to that I think the major alliance members will want to make sure any newcomer does not introduce competition within the alliance. Look at the number of conditions BA tried to put on LX when the latter bid for OW membership, and yet a relatively minor player like MA got accepted without much toing and froing. MA was also like LX then, in a precarious financial position, albeit with an eventually successful turnaround plan.

 

And wasn't it that AF wasn't happy with MH joining ST?

 

Every year I write furiously to Santa for MH's entry to OW but I doubt it's likely to occur now, as OW has stated that they want no more than 12 member airlines. They already have 10 - I doubt either of the last 2 will be from South East Asia as CX/KA already have the region covered adequately.

Edited November 11, 2007 by Keith T

[Izanee 0]

i suppose you're right Keith. AF is not interested in the Malaysian market as SIN/BKK are the high yield routes in the region. Plus, AF now have a nice cushy arrangement with QF to serve the Australian market via SIN.

 

KLM is covering the Malaysia/Indonesian market adequately - and via KUL serve the Australian market.

 

Its MH's loss at the end of the day. I know many airlines are not part of any alliances but MH cannot keep using EK as an example.

 

EK is using DXBs excellent location at the crossroads of Europe, Central Asia, Africa, Middle East and Asia to its advantages. They have multiple daily flights from multiple cities with excellent onward connections. and THEY ARE STILL GROWING.

I was sceptical about EK's need for the 43 A380s but looking at their Dubai hub during my recent transit, I am not surprised anymore.

 

Dubai overtook KUL in terms of passenger numbers 2-3 years ago and has not looked back since. It is truly a hub. You now can fly anywhere in the world - with lots of frequency to match.

 

KUL missed the boat - MAHB and the government were too slow to capitalise on the air traffic growth. We are at least 10-15 years behind SIN.

As soon as they got their act together, CHINA and INDIA opened their skies and airlines started flocking there. Look at Finnair - pulled out at the last moment to capitalise on the growing Europe-India traffic.

 

KUL - too little too late.

 

(I am sorry as I have always hoped on KUL catching up with SIN - i don't see that happening now).

 

 

 

 

[KK Lee 5]

i suppose you're right Keith. AF is not interested in the Malaysian market as SIN/BKK are the high yield routes in the region. Plus, AF now have a nice cushy arrangement with QF to serve the Australian market via SIN.

 

KLM is covering the Malaysia/Indonesian market adequately - and via KUL serve the Australian market.

 

Its MH's loss at the end of the day. I know many airlines are not part of any alliances but MH cannot keep using EK as an example.

 

EK is using DXBs excellent location at the crossroads of Europe, Central Asia, Africa, Middle East and Asia to its advantages. They have multiple daily flights from multiple cities with excellent onward connections. and THEY ARE STILL GROWING.

I was sceptical about EK's need for the 43 A380s but looking at their Dubai hub during my recent transit, I am not surprised anymore.

 

Dubai overtook KUL in terms of passenger numbers 2-3 years ago and has not looked back since. It is truly a hub. You now can fly anywhere in the world - with lots of frequency to match.

 

KUL missed the boat - MAHB and the government were too slow to capitalise on the air traffic growth. We are at least 10-15 years behind SIN.

As soon as they got their act together, CHINA and INDIA opened their skies and airlines started flocking there. Look at Finnair - pulled out at the last moment to capitalise on the growing Europe-India traffic.

 

KUL - too little too late.

 

(I am sorry as I have always hoped on KUL catching up with SIN - i don't see that happening now).

 

 

Concurred with you especially MAHB is contented with the ‘best airport’ title.

 

 

 

 

[Victor A. 2]

Concurred with you especially MAHB is contented with the ‘best airport’ title.

 

 

typical m'sian mentality, no?

[BC Tam 2]

I was sceptical about EK's need for the 43 A380s but .....

They just bought more btw !

[Izanee 0]

MAHB keep mentioning they win best airport - but its always the 15-25 million pax/year category. This rules out BKK, SIN and EVEN CGK!!!

for god's sake - the propaganda is killing me. I never realised how bad it is until I got stupid, patronising replies from IJ and co.

 

they really must think we are stupid.

 

 

 

[Ivan L. 0]

MAHB keep mentioning they win best airport - but its always the 15-25 million pax/year category. This rules out BKK, SIN and EVEN CGK!!!

for god's sake - the propaganda is killing me. I never realised how bad it is until I got stupid, patronising replies from IJ and co.

 

they really must think we are stupid.

 

Not to mention 10 millions of those passengers belong to AK and LCCT terminal. What a waste of space of MTB and Satellite Terminal.

[KK Lee 5]

Its MH's loss at the end of the day. I know many airlines are not part of any alliances but MH cannot keep using EK as an example.

 

JL was the favourite airline used by MH for not joining alliance. JL was prominent displayed in one of the first IJ’s presentation to MH management. Believe IJ did wish MH to join an alliance but guess isn’t any alliance can meet MH’s conditions.

 

Believe EK will join an alliance when their growth rate is slowed. Otherwise, their aggressive expansion plan may be resisted and restricted by alliance partners.

 

Like Proton, won’t be surprise that MH may invite IR, SV, RB, SD, PF, CU, etc to start up the ‘Islamic airlines alliance’.

 

 

[Izanee 0]

they'd be lucky to have them. other potential airline partners like Myanmar airlines, air kazakhstan and air kyrgystan have gone bust already.

 

 

 

 

[Rozhan 0]

MH can't become anywhere near an 'Islamic' airline as it serves alcoholic beverages on board. Same goes with MAHB with its Eraman retail arm selling all kinds of duty-free alcoholic beverages. As such I believe their stocks aren't syariah compliant.

 

By the way, next year will be KLIA's 10th anniversary and its dream of becoming a hub of significance has yet to materialize. I say dream on.......

[Izanee 0]

all this talk by MAHB about having 70 airlines within a certain timeframe doesn't mean anything at all. BKK has more than 80 airlines NOW!

Oman air which was supposedly a 'sure' starter to KUL has decided its first two long haul routes this year will be LGW and BKK!

 

for god's sake.

 

More and more airlines are choosing BKK, and the current ones are upgrading services.

 

KUL is moving further behind. Air asia x seems to be the only airline that will be significant in KUL - and I think that will happen very very soon. MH will be a two bit 5 star carrier with low cost. MH will just be another 'has been'. Never will again.

Edited November 14, 2007 by Izanee

[Pieter C. 5]

Just look how long it took CZ, before they actually could join ST

 

China Southern will officially become full-ST member on 15nov07 !!!