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Mohd Azizul Ramli

MAS A380 - Fleet to be Retained

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Oh thanks. It seems that a recent post I made there didn't go through, or got deleted.. Thanks again guys.

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If MH is so nervous about not being able to fill the A380 on the kangaroo route, perhaps it is true that D7 has already dented their market share with their KUL-STN services. That may explain why they want protection from D7 on to KUL-SYD route. I guess that without a cabin refresh, MH's B744 product is uncompetitive and pax prefer to save some money by flying D7.

But based on MAHB 2009 annual report:

 

- LHR recorded 402,162 passengers movement (both departure and arrival) in 2009, + 0.4% from the same in 2008.

 

The breakdown is 203,391 passengers for departure (MH 2 and 4), which can be translated as [203,391 passengers/(14 flights per week x 52 weeks in 1 year)] = 279.39 passengers per flight, which means [279.39 passengers per flight/359 seats on MH's B744s] = 78% load factor, which is above MH's system wide average.

 

As for arrival (MH 1 and 3), the passengers number is 198,771, which can be translated as [198,771 passengers/(14 flights per week x 52 weeks in 1 year)] = 273.04 passengers per flight, which means [273.04 passengers per flight/359 seats on MH's B744s] = 76% load factor, which is also above MH's system wide average.

 

- STN recorded 122,915 passengers movement (62,346 departure + 60,569 arrival). I don't have the number of D7's actual flight frequency in 2009, thus I can't compute the load factor. Both MH and D7 carried 525,077 passengers to/from London in 2009, which is a very high number.

 

So I think D7's entry into London did not effect MH's market at all but it contributed to more passengers movement between KUL and London. And based on the load factor of flight MH 1/2/3/4 throughout the year 2009, I think the route warrant an A380. With a good marketing, plus the much anticipated Premium Economy cabin, I think MH can be assured of a healthy load of their soon to be double daily A380 flights into LHR.

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On the contrary, SYD recorded 259,626 passengers movement (both departure and arrival), -19.6% from 2008 (322,769 passengers movement), which is heavily supporting D7's claim about the leakage of passengers between KUL and SYD through foreign airlines, particularly SQ. And I am not sure if SYD can support the A380 for MH.

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So I think D7's entry into London did not effect MH's market at all but it contributed to more passengers movement between KUL and London. And based on the load factor of flight MH 1/2/3/4 throughout the year 2009, I think the route warrant an A380. With a good marketing, plus the much anticipated Premium Economy cabin, I think MH can be assured of a healthy load of their soon to be double daily A380 flights into LHR.

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On the contrary, SYD recorded 259,626 passengers movement (both departure and arrival), -19.6% from 2008 (322,769 passengers movement), which is heavily supporting D7's claim about the leakage of passengers between KUL and SYD through foreign airlines, particularly SQ. And I am not sure if SYD can support the A380 for MH.

Darn, that blows my theory! ;)

 

So we are back to square one - why is MH so nervous about having the A380? Instead of accepting that they cannot fill the planes up, maybe they should do something to ensure that they do fill them up!

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On the contrary, SYD recorded 259,626 passengers movement (both departure and arrival), -19.6% from 2008 (322,769 passengers movement), which is heavily supporting D7's claim about the leakage of passengers between KUL and SYD through foreign airlines, particularly SQ. And I am not sure if SYD can support the A380 for MH.

 

Believe linking BNE to KUL/SYD play a role in the dwindling numbers.

 

:drinks:

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With GA serving CGK/AMS, expect MH load on KUL/AMS to be impaired especially after the arrival of GA 77W. KUL/AMS may not sustain daily A380.

 

:drinks:

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MAS can do without A380s

 

Analysts say they can be replaced with aircraft of other makes

 

PETALING JAYA: The possibility of Malaysia Airlines (MAS) cancelling its A380s order from Airbus SAS is unlikely to hurt the national carrier as much as it will hurt the European planemaker.

 

This was because MAS had options to place orders for planes of other makes to make up for the impending loss of the six A380s, said analysts.

 

An analyst said that although the other aircraft might not be able to fly 15,400km non-stop or having a capacity as large as the A380s, there were other replacements such as the Boeing’s Dreamliner to fill up the gap. MAS, however, said it was not looking at aircraft make if it were to replace the A380s.

 

On Monday, MAS said it might consider cancelling the six A380s it ordered following repeated delays in delivery by French aircraft maker Airbus SAS.

 

Managing director/chief executive officer Tengku Azmil Zahruddin said there were plenty of aircraft available in the market.

 

He added that hypothetically MAS could consider Boeing’s 777-300 in place of the A380, if it were to cancel the order.

 

Airbus was initially scheduled to start delivering the A380s in January 2007 but has postponed it to January 2011 following delays in its programme. It was again deferred to August 2011. MAS is expecting to receive the first of six A380s in the first half of 2012.

 

Based on the 2008 catalogue price, an A380 costs between US$317mil and US$337.5mil.

 

An analyst said the impending cancellation from MAS, which was worth US$1.9bil, would add to the problems at Airbus.

 

Airbus has been facing huge issues related to production of the A380 aircraft. It had earlier paid RM329mil compensation to MAS for the delay.

 

“We are sorry about the delays (which are a knock-on effect of missing 2009 delivery target), but we are confident that we will meet the revised delivery schedule,” said Airbus media relations vice-president Stefan Schaffrath.

 

“The thoughts of cancelling the A380s order were mainly due to Airbus’ uncertainties in delivery of the aircraft as scheduled in 2012 vis-à-vis the third delay,” Kenanga Research said, adding that the cancellation could also lead to disruptions in MAS’ expansion plan and cost efficiency.

 

“Nevertheless, the management may leverage on its current fleet should it cancel the A380s order, while looking for replacements.

 

“We are neutral on the news at this moment as there is no final decision to cancel the order. In our opinion, the management is currently being prudent in making such a decision to ensure its expansion plan is still intact,” Kenanga Research said.

 

An analyst said MAS might not want to be left behind by other regional carriers and continue with its order. He said both Singapore Airlines and Thai Airways had ordered the A380s.

 

Singapore Airlines has 19 firm orders for the A380s and currently has 10 aircraft in operation. Thai Airways ordered six aircraft.

 

However, he said MAS also had to think about the load factor for the superjumbo jets.

 

While MAS is contemplating replacing the A380s with B777-300s or A350s, AmResearch Sdn Bhd noted that placing fresh orders now meant that MAS had a longer queue to join for new aircraft deliveries.

 

“Indications are that the earliest delivery for an A350 as an example – should MAS place an order now – would be in 2019,” it said.

 

AmResearch said the B777-300s would give MAS more flexibility than A380s. Its smaller seat capacity allows easier load factor management, while frequency can be toned down during low season.

 

“Additionally, B777s are about 20% cheaper than A380s – based on list price, meaning potentially lower capex layout,” it added.

 

On the downside, however, higher frequencies required during high-traffic season would put MAS at a disadvantage, given higher airport charges and flight crew overnight expenses.

 

Airbus, the world’s biggest maker of commercial aircraft, started deliveries of the A380 model in 2007 after running about two years late because of difficulties with cabin wiring.

 

While there might be a series of delays, Airbus said no airlines had cancelled their orders of A380 so far. However, logistics companies such as FedEx and UPS have cancelled orders for A380 freighters.

 

So far this year, Airbus has already delivered seven A380s – three to Emirates Airline, two to Air France, one to Lufthansa and one to Qantas Airways.

 

Source: http://biz.thestar.com.my/news/story.asp?file=/2010/6/23/business/6524385&sec=business

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BERLIN, June 23 (Bernama) -- German aviation circles are abuzz with news of possible cancellation of an order placed by Malaysia Airlines (MAS) with aircraft manufacturer Airbus for the super-jumbo passenger aircraft A380.

 

The various government agencies associated with the aviation sector are closely monitoring the signals coming from Malaysia.

 

Germany has a stake in the European aircraft manufacturer, Airbus, which is part of the EADS Group.

 

The possibility of an order for A380 aircraft being cancelled is causing a great deal of nervousness particularly at a time when the aircraft manufacturer is anxious not to lose any business in a global market that is increasingly characterised by deep economic uncertainties and a downturn in demand.

 

There are also fears that MAS' cancellation of the order could prompt other airlines to also do the same.

 

According to aviation circles in Germany, MAS has been quietly but firmly venting its frustrations to Airbus over the delay in delivering the big bird.

 

German media has been quoting Tengku Datuk Azmil Zahruddin, MAS managing director and chief executive officer, as saying that “we are very unhappy”.

 

Indeed, Azmil has reportedly warned the aircraft manufacturer that the airline would not tolerate any further delay.

 

This message is interpreted by the Germans as a “clear warning” to Airbus that in the event of further delay, MAS would use its right to cancel the order.

 

Should MAS resort to exercise this right, this would be the first time that the A380 passenger aircraft is not being accepted by a customer.

 

The development of the freight aircraft was stopped after FedEx and UPS said they were not interested in the acquisition of that aircraft.

 

MAS has placed an order with Airbus for six aircraft of the A380 type.

 

MAS has waited for four years for the delivery of their first wide-bodied Airbus.

 

As an old customer, MAS was given price discounts which Airbus has not been disclosing.

 

However, some German aviation experts say that it “must have been discounts of up to one third of the price”. The list price for a A380 is US$340 million a piece.

 

Airbus had encountered major technical and other problems in the development and construction of the world’s biggest passenger aircraft, as a result of which, all the customers received their aircraft after a delay of several years.

 

In the meantime, the problems have been resolved and Airbus has begun delivering the aircraft.

 

The aircraft manufacturer has processing orders on a “first-come-first-serve” basis.

 

The German airline, Lufthansa, recently received its first A380 aircraft after having to wait for some years. The aircraft is being deployed on the long-haul Frankfurt-Tokyo route.

 

The sequence in which Malaysia placed its order was after those of other airlines.

 

It was promised delivery of the aircraft in January 2011 but Airbus announced that it would be delaying delivery to the third quarter of the year.

 

But even this delivery timeframe does not appear realistic now.

 

The aircraft manufacturer is reportedly planning to deliver the first A380 aircraft in the second quarter of 2012.

 

Airbus has apologised to MAS for the delayed delivery.

 

irbus, which has been delivering the aircraft since 2007, has earned praise in the past for its reliability.

 

It will be delivering at least 20 wide-bodied A380 aircraft this year to customer airlines. Production of the aircraft has been sold out until 2015.

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TG seems to be keep a mum about their A380. They just ordered a few 77W, which can easily replace their 747. I am wondering if they are still interested with their A380 order.

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TG seems to be keep a mum about their A380. They just ordered a few 77W, which can easily replace their 747. I am wondering if they are still interested with their A380 order.

 

If I'm not mistaken TG ordered A380s so they could get the permits export shrimp to EU. If they were to cancel them they'd probably lose the rights to do so.

 

 

Sometimes I'm thinking...why don't MH use the Airbus orders to pressure AF to secure a seat in SkyTeam?? It's not like the approach is any more illegal than TG shrimps case...

 

 

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If I'm not mistaken TG ordered A380s so they could get the permits export shrimp to EU. If they were to cancel them they'd probably lose the rights to do so.

 

 

Sometimes I'm thinking...why don't MH use the Airbus orders to pressure AF to secure a seat in SkyTeam?? It's not like the approach is any more illegal than TG shrimps case...

 

Only limited Malaysian seafood is allowed to EU.

http://biz.thestar.com.my/news/story.asp?file=/2010/5/11/business/6144372&sec=business

 

Forced marriage is unlikely to lead to a happy family and will almost certain to end up in bitter divorce.

 

:drinks:

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If I'm not mistaken TG ordered A380s so they could get the permits export shrimp to EU. If they were to cancel them they'd probably lose the rights to do so.

 

 

Sometimes I'm thinking...why don't MH use the Airbus orders to pressure AF to secure a seat in SkyTeam?? It's not like the approach is any more illegal than TG shrimps case...

 

I remember back in 1995 how Tajudin Ramli tried to get more slots into Paris by threatening never to order any Airbus planes again. And that didn't work out. Surely it'll be more of the same with Air France. Airbus is Airbus and has nothing to do with Air France.

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If I'm not mistaken TG ordered A380s so they could get the permits export shrimp to EU. If they were to cancel them they'd probably lose the rights to do so.

 

Sometimes I'm thinking...why don't MH use the Airbus orders to pressure AF to secure a seat in SkyTeam?? It's not like the approach is any more illegal than TG shrimps case...

I remember back in 1995 how Tajudin Ramli tried to get more slots into Paris by threatening never to order any Airbus planes again. And that didn't work out. Surely it'll be more of the same with Air France. Airbus is Airbus and has nothing to do with Air France.

It is not uncommon in the industry that aircraft purchase is linked with indirect politically inclined intentions by the involved countries. The recent purchase of 32 A380s by EK was said by some quarters that UAE is trying to get into the 'system' of the EU. The massive aircraft orders is undoubtedly plays a crucial economic parts to the EU and the whole chain of organisations and individuals that involved in its production.

 

You raised a very interesting point about using this purchase of A380 as a bargaining chip to get into SkyTeam. However, isn't one of the many reason why AF is so pissed off with MH and keep on voting against MH's entry into SkyTeam is because MH explicitly asked the Malaysian government for an extra landing rights in CDG (which was granted by the French government, which AF has been against the idea since forever) through the purchase of the 2 Scorpene submarines?

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It is not uncommon in the industry that aircraft purchase is linked with indirect politically inclined intentions by the involved countries. The recent purchase of 32 A380s by EK was said by some quarters that UAE is trying to get into the 'system' of the EU. The massive aircraft orders is undoubtedly plays a crucial economic parts to the EU and the whole chain of organisations and individuals that involved in its production.

 

You raised a very interesting point about using this purchase of A380 as a bargaining chip to get into SkyTeam. However, isn't one of the many reason why AF is so pissed off with MH and keep on voting against MH's entry into SkyTeam is because MH explicitly asked the Malaysian government for an extra landing rights in CDG (which was granted by the French government, which AF has been against the idea since forever) through the purchase of the 2 Scorpene submarines?

 

I thought it was AF's reluctance to reduce flight to SIN? If MH were to be part of SkyTeam, they'd have to reroute to KUL and they don't want to, since SIN is very lucrative for them. Or am I mistaken?

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I don't see why AF has to feel threatened by MH presence in CDG. SQ and EK are another story.

Perhaps AF wants whatever slots at CDG reserved for it and not dished out to airlines like MH - much in the same manner that MH wants the KUL-SYD slots for itself and D7 can't have them.

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A question on Twitter to Tengku Azmil touched this very matter:

 

"@tengkuazmil is it true Air France are blocking MH's entry into SkyTeam?"

 

 

 

And his reply:

 

"@selamanya We are interested in alliances. It is a matter of joining the right one and doing it on terms that makes sense to us."

 

 

 

 

He sort of ignored the second part of the question (about AF), but gave a subtle hint that that was indeed the case, when he says "doing it on terms that makes sense to us".

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Word from MASEU...

 

MASEU: Just Cancel A380 Orders

 

KUALA LUMPUR, June 24 (Bernama) -- The Malaysian Airlines System Employees Union (MASEU) has called on Malaysia Airlines (MAS) to just cancel the orders for the Airbus A380 aircraft.

 

"At the point of receiving the said aircraft in 2012, it would have become outdated in the airline industry," said MASEU Executive Secretary Mustafar Maarof in a statement on Thursday.

 

According to the union, MAS needs to change its business strategy and avoid following in the footsteps of other airline companies in the region.

 

"MAS can operate more comfortably and economically by building its business modus operandi in facing the stiff competition at the global level," Mustafar said.

 

Airbus was to have delivered the A380 in January 2007 but has had to postpone it to early 2012.

 

"This is something not aceptable in undertaking business in the airline industry.

 

"If MAS still decides to wait, then it will fail to update and draft a framework and business model in the new era of the airline industry," Mustafar noted.

 

From the perspective of labour laws, the MASEU said the A380 had changed the manner and rest hours of cabin crew on the aircraft.

 

-- BERNAMA

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Word from MASEU...

 

MASEU: Just Cancel A380 Orders

 

KUALA LUMPUR, June 24 (Bernama) -- The Malaysian Airlines System Employees Union (MASEU) has called on Malaysia Airlines (MAS) to just cancel the orders for the Airbus A380 aircraft.

 

"At the point of receiving the said aircraft in 2012, it would have become outdated in the airline industry," said MASEU Executive Secretary Mustafar Maarof in a statement on Thursday.

 

According to the union, MAS needs to change its business strategy and avoid following in the footsteps of other airline companies in the region.

 

"MAS can operate more comfortably and economically by building its business modus operandi in facing the stiff competition at the global level," Mustafar said.

 

Airbus was to have delivered the A380 in January 2007 but has had to postpone it to early 2012.

 

"This is something not aceptable in undertaking business in the airline industry.

 

"If MAS still decides to wait, then it will fail to update and draft a framework and business model in the new era of the airline industry," Mustafar noted.

 

From the perspective of labour laws, the MASEU said the A380 had changed the manner and rest hours of cabin crew on the aircraft.

 

-- BERNAMA

MASEU talks nonsense. If you want to have it their way they rather that Mh keeps all their 737 400 and A330 aircraft at the expense of the travelling public and rather the money channnel to themselvea with higher salaries.

Edited by jadivindra

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I agree with his statement. MH needs to avoid following other airlines' footsteps and develop its own business strategy. Speaking about union, pity about their female cabin crew, who have to retire earlier than their male counterpart.

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"At the point of receiving the said aircraft in 2012, it would have become outdated in the airline industry," said MASEU Executive Secretary Mustafar Maarof in a statement on Thursday.

 

 

Wow, that was quick. The 747 took almost 40 years to become outdated, but the A380's already outdated in only what, 4-5 years?

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I agree with his statement. MH needs to avoid following other airlines' footsteps and develop its own business strategy.

 

What's wrong if one follows a proven and successful business model and practice?

 

:drinks:

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What's wrong if one follows a proven and successful business model and practice?

 

:drinks:

 

Cannot follow,ego very high.

 

So in this case, MH should now buy all russian aircraft so that will be clear that they did not follow anyone.

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I see no harm in emulating the success of other airlines, except maybe tweak the strategy a little to best fit the airline's business plan...

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Following other airlines' footstpes in this context means buying A380. Just because SQ and TG bought A380s, doesn't mean MH have to follow suit.

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