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Azrin A

MAS to terminate routes that causes losses

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MH must cut those destinations which have poor loads as soon as poosible, and in some safe measures, MH should swallow its pride and follow SQ's popular route selection. Is MH still flying to Buenos Aires which have been suffering from very low yields n load factors for years but seems to be still operating?

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MH must cut those destinations which have poor loads as soon as poosible, and in some safe measures, MH should swallow its pride and follow SQ's popular route selection. Is MH still flying to Buenos Aires which have been suffering from very low yields n load factors for years but seems to be still operating?

 

From what I can gather, it's all about frequency. Who would ever fly you if you only had 3 flights a week? Compare that to some that fly 2-3 times daily to the USA (some non-stop even). Mind you, when they operated the 744 on EWR-ARN, MH was the only airline to offer F class on that route. Other options would be a 2-class 757 on CO or 2-class 330/343 on SK.

 

If this was made into daily flights, premium passengers would definately flll-up the front of the aircraft. Leaving the low yeilding Scandinavian tourists to fill the rear. During summer, Scandinavians find it hard to get seats to go to their much loved Exotic Thailand - despite additional frequency by TG and the odd charter. Surely MH could have figured this out and fill their planes on a daily basis.

 

It's a known fact that many airlines have voiced this same concern. I remember the CEO of GF some years back saying that the BAH-LHR was losing money as they only flew there 5 times a week. But when they increased it to daily, their fortunes change.

 

EZE is actually 50/50. 2 flights a week, come on. Yes cost of operating the route is phenominal. They can't use the more efficent 772 for ETOPS limitations. So the only capable aircraft is the (now gas guzzling) 744. This drives the cost up.

 

I don't know if many of you are aware but MH has in the past made some packages to Antarctica through EZE during the summer months!! Now if they only marketed it properly EZE would really make money. Cosidering the strong ties between China & South America added frequency to EZE would, I am sure, generate more income.

 

Just my dua sen....

 

 

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Hai Fashni..Welcome to MW forum :drinks: ..emm some good opinion here.. :)

 

In my opinion..why should an airline add frequency if the current frequency never give some good load yield..why should the airline add their losing by operate daily flight basis if the aircraft fly with 10 passenger only..I can understand, less frequency serving on certain sector make the airline less popular to fly with them, but that is the only best option for airline keep operate for certain sector..Even Qantas plan to operate only 3 times weekly to EZE..

 

If we still remember, why MH need to terminate Manchester route last 2 year..MAS need to achieve 140% load factor to break even..if MH can fly 100% passenger on that route,MH still need addition 40% passenger to cover the operation cost..

 

Correct me if i wrong..

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MH has not been active in enough on its marketing strategy which i pointed out quite a while ago. If they did, they may be able to turn certain routes into profitable routes.

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If we still remember, why MH need to terminate Manchester route last 2 year..MAS need to achieve 140% load factor to break even..if MH can fly 100% passenger on that route,MH still need addition 40% passenger to cover the operation cost..

 

Basically, the yield was poor.

 

Unlike leisure travellers, business travellers (i.e. premium pax) often have last minute change of schedule and tight schedule, frequency is a primary criteria for them to choose which airline to fly.

 

Agreed with Fashni that if KUL/LAX, KUL/EWR, KUL/FRA, KUL/ZRH route are daily, the yield will be better.

 

:drinks:

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MH has not been active in enough on its marketing strategy which i pointed out quite a while ago. If they did, they may be able to turn certain routes into profitable routes.

 

I agree with this 200%! MH's marketing changes drastically from one time to another . . . nothing remain constant except for fleeting images of the kebaya-clad cabin attendants. There is not a jingle that one could associate with MH and even the concept varies wildly.

 

I remember MH being the first airline to advertise A380 services very extensively on various international news channels . . . long before A380 pioneer airlines even started theirs. Is this a case of putting the cart ahead of the horse? Then there was the time when the advertisements involved space stations - unrealistic for most and way too far-fetch to expect anyone to believe that this is the future of travel.

 

There is certainly no shortage of ad talents in Malaysia, just look at the success of the Malaysia, Truly Asia campaign. Regrettably, this campaign seemed to have lasted too long (and perhaps was also too intensive - resulting in many I know from the international travel trade getting a feeling of over-exposure). Similar campaigns which I thought were similarly good and intensity was about right were those from Tourism Australia and South African tourism board.

 

I hope that MH's management and Idris Jala take the bold step of totally re-inventing MH - keeping its inflight service and improving it even further. Everything else from administration to fleet and network should be totally overhauled. And for heaven sake, hedge your fuel requirement more than at present. Lufthansa saved billions of dollars since they began fuel hedging and today, they are extremely grateful for having done so and the CEO Wolfgang Mayrhuber could confidently say (in June 2008) that none of its routes will be cut.

 

KC Sim

Edited by KC Sim

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Then there was the time when the advertisements involved space stations - unrealistic for most and way too far-fetch to expect anyone to believe that this is the future of travel

But if their widebody replacement programme progresses upon the rate it is on now, perhaps MH will still be operating their existing 744's at the time when intergalactic travel with transit stops on wau shaped space stations become reality :p

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I still remebemred the wau speace station advertisement, thats was probably the time MH claims that they have one the world's most advanced and youngest fleet. Sadly, those time has gone....if the management fails to recognise the needs of having the wide body replace soon....MH will have an disadvantage over the next few years.

Edited by Kenneth T

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I don't know if many of you are aware but MH has in the past made some packages to Antarctica through EZE during the summer months!!

 

 

WOAH!

 

 

I never knew this! Id definitely give it a shot if there are seats available...

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I remembered that I read the Golden Holidays booklets and that time MH was offering package tour to Antartica but it has vanished for some time now. The most likely reason is that, they are not active enough with the marketing strategy.

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I have a few copies of the Golden Holidays brochure to Antartica stashed somewhere. If I recall correctly the cost per person including meals on board ship was about RM60k.

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Basically, the yield was poor.

 

Unlike leisure travellers, business travellers (i.e. premium pax) often have last minute change of schedule and tight schedule, frequency is a primary criteria for them to choose which airline to fly.

 

Agreed with Fashni that if KUL/LAX, KUL/EWR, KUL/FRA, KUL/ZRH route are daily, the yield will be better.

 

:drinks:

 

My point exactly.

 

BTW, KUL - MAN flights were often filled by M, B, Q & L (booking) class passengers, i.e. students studying there & their parents visiting them yearly/bi-annually.... No doubt bought at the MATTA Fair. Hence the 140% break even point. Mind you, KUL - EZE sees many Enrich members burning 100 - 180K points to fly there just to see what the fuss is all about... Bless them.

 

This is the exact effect BA felt when they operated the terminator service to KUL all those years back. Not only that, it was also filled with airline staff using their ID90 for their vacation in Malaysia/SEA.

 

At the end of the day, with the current fuel prices, older planes are less efficient than current/future generation aircraft. Something MH has yet to decide for their WB aircraft replacement. Routes that are expensive/unprofitable today may actually turn a profit with newer more efficient aircraft. Dare I say it, if EZE is somehow still in the route map come 2011, I would not pe surprised if the A380 is deployed all the way there. Unless of course they order capable Twins that can do the route.

 

Route cuts are very easy to execute. But it will be more expensive in the long run to re-open the route (if that ever happens). It's ironic that many here hope that KUL will be a major hub in SEA yet wants MH to have minimal international routes. It just doesn't gel.

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It's ironic that many here hope that KUL will be a major hub in SEA yet wants MH to have minimal international routes. It just doesn't gel.

 

Airports that aspire to be international or regional hubs ought to get a shot of realism before they trip over themselves. KUL wants to be a SE Asian hub. So does SIN and BKK. Even Johor Bahru Airport wants to be such a hub. The only one that is a natural for this status is Bangkok. Personally, even Singapore struggles and barely has enough critical mass to try and be such a hub. Singapore's salvation comes in the form of the higher yield it gives to airlines compared to Bangkok. But in sheer variety of airlines and city-pairs, SIN is totally eclipsed by BKK.

 

So MH need to just concentrate on being a very efficiently run airline. If I had at any time thought that Asia's most profitable airlines were the most professionally-managed, I now am of the opinion that Lufthansa is far ahead insofar as management is concerned. MH's management would do great if it emulates LH in management but takes advantage of the Asian flavour of its inflight service (and perhaps extend this to the ground - my personal experience here leaves much to be desired).

 

For more than a decade, MH went down the path of trading yield for greater market share and passenger volume. In SIN, it offered fares to New York and Europe that were incredible - I recall that the only airline that could match those fares on some sectors was Kuwait Airways. That has driven airlines such as BA and Qantas out of KUL - these airlines do what efficient airlines do, ie. deploy their planes where they make more money. With that, KUL's hub aspirations dimmed and feed into MH's regional network weakened. MH's indifference to alliance membership has left it by the wayside - similar to JAL except that JAL when it chose to be in an alliance was attractive enough for it to be welcomed with open arms by oneworld.

 

I applaud the decision to replace the B737-400s with B737-800s and hope that there is perhaps the notion to achieve a mix of B737-800s and B737-900ERs (for flights to secondary cities in China and India). But I shudder to think that the replacement of its widebody fleet is still being deferred. If MH does not embark on this really soon, it will suffer from high fuel costs incurred by a fuel-inefficient fleet, declining passenger appeal of its fleet, higher maintenance costs and at some point, even despatch reliability as the B744s and A333s age. Just look at the airlines that have ordered the B777-300ERs for their fleet replacement or rejuvenation: Biman, Philippine AL, Garuda and now Air China. With airlines in the Middle East ordering aircraft at the rate that their oil revenue-soaked economies could afford, MH - when it finally decides in six months or a year - will be staring at deliveries too far down the road unless it resorts to leasing them first. With high oil prices, high security costs, high food prices, sharpened competition, weakened global economy . . . how long can an airline remain uncompetitive?

 

I am not sure that purely as a commercial concern, MH can afford to wait for BTP3 or BTP4 to begin to make real changes. It has to make painful and decisive changes quickly and re-brand itself (with matching service) to improve yield. At the rate it is trying to compete with AirAsia using $0 offers, it is pointless even if the planes are filled to the very last seat. BTP1 was already supposed to work - but MH never came close to the staff / network reduction it advocated there. BTP1 was bold and (at that time) sounded very resolute, decisive and believable. Like a movie with sequels, this begins to lose all its positive attributes when you begin to hear of half-hearted sequels such as BTP2. The rank and file within the airline now expect that there is time to pull up their socks as there will be a BTP3 and BTP4 . . . and time is on their side - which it is not.

 

And I agree with many that MH should forget about operating to a major destination when they are just thinking of five flights per week or less. It will end up scraping the bottom of the barrel. Sorry if my views dis-heartened MH's most ardent supporter .. . these views are founded by my belief that MH could have been a very good airline ranking alongside CX, TG and SQ. MH must take up the Malaysia Boleh spirit . . . but first embrace the MH Boleh Change attitude.

 

KC Sim

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Hope so some MH management read this one..good opinion..at least there still some Malaysian want see MH become want they achieve in the 90's..we proud with our own National Carrier,MH..

 

Many thanks to Mr. K C Sim..

 

 

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Hope so some MH management read this one..

 

 

Purchasing new fuel efficient aircraft is a capital expenditure, depending on accounting practice and financial arrangement, either depreciation or leasing cost will be charged to the Profit and Loss.

 

After adding depreciation or leasing cost, saving on fuel may or may not have positive impact to the PnL.

 

MH top management are on contract and their KPI is judged on current financial year. What may happen a few years down the road may not be their concern. That’s why measures taken by BTP, II, III, zero fare promotion, etc are for immediate results.

 

Believe those loss making routes that remain online are on gomen directive and are compensate by PMB like domestic routes or at least not counted to the management’s KPI.

 

:drinks:

 

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MH top management are on contract and their KPI is judged on current financial year. What may happen a few years down the road may not be their concern. That’s why measures taken by BTP, II, III, zero fare promotion, etc are for immediate results.

 

So unfortunate.

 

A very clear downside to KPI's.

 

 

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What may happen a few years down the road may not be their concern. That’s why measures taken by BTP, II, III, zero fare promotion, etc are for immediate results.

 

This position is extremely unfortunate. It is like a death sentence on the company. If this is the stance, the management should sell their valuable slots at London-Heathrow Airport to a competitor airline for a huge sum of money and declare a huge profit for now. That might quality the management for some huge rewards and a pat on the back. Whatever the government does, just do not extend the contract of this present management - cos they will then have to face the very music they wrote. It may just end up as an airline without any tangible fleet asset, physical assets and slots in some of the most important places in the world . . . for these have been sold by them.

 

What is scary is the way it is put across, it almost sounded like this is a Management 101 strategy!!! Guess if it is said over and over again, someone will begin to believe it and hopefully someday it sticks. Like someone in MAS said, got to keep an eye on the P&L account and ensure those Blackberry phones go around just so that the departmental heads could make regular reports.

 

KC Sim

Edited by KC Sim

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The latest from A.Net.

 

According to some posters here on A-net MH is upgrading KUL-ARN-EWR in august to 744 ? Does anyone here have some information ? I thought this route was loosing money big time... This sound really strange....

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i heard that August is the peak season for Malaysian students returning back to US after their holidays...

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Has it always been the 777?

 

But yeah, it looks like its a 747, it says when you try to book on the official website.

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Has it always been the 777?

 

But yeah, it looks like its a 747, it says when you try to book on the official website.

 

The MH90/91 has had 747 before. I dont know if it was only for the summer period then but if you look at pictures from airliners.net its pictures from 2005 with 747.

 

I really hopes that it'll be 747 as I will travel that route in October-November, if you look at the official website it says 747 for this period too, not only the summer.

 

I think that they've added a 747 to the route is a good sign and hopefully it will recover?

Edited by Albin And

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Some changes to MH's schedule from http://airlineroute.blogspot.com/search/la...ysia%20Airlines The blog was developed by A.Net member, jimyvr.

  • Malaysia Airlines' Kuala Lumpur - Stockholm - Newark flight will be reduced to 2 weekly, operating on Day 46, effecitve 04OCT08. Day 1 service returns from 27NOV08. Malaysia Airlines is operating Boeing 747-400 aircraft on the Kuala Lumpur - Stockholm - Newark route from 02AUG08 while the frequency is being reduced from 3 to 2 weekly.
  • Malaysia Airlines' Daily Kuala Lumpur - Taipei - Los Angeles will be reduced to 5 weekly from 03OCT08 to 24OCT08. Operations on Day 24, leaves KL in afternoon and arrives LA at night, will be cancelled. Malaysia Airlines will further reduce Kuala Lumpur - Taipei - Los Angeles service to 3-5 weekly. The reduction period is the following:

     

    Week of - Operating Days

    29AUG08 - 24567

    06SEP08 - 2467

    14SEP08 - 467

    22SEP08 - 467

    30SEP08 and onward - 3567

    25NOV08 - 23567

    03DEC08 and onward - 24567

    Daily service will be restored by 27DEC08.

  • Effective 26OCT08, Malaysia Airlines will be increasing flights to Delhi and Mumbai.

     

    Delhi

    Service increase from 9 to 10 weekly.

     

    MH184 KUL0805 - 1115DEL 330 135

    MH190 KUL1840 - 2150DEL 330 D

     

    MH185 DEL1220 - 2010KUL 330 135

    MH191 DEL2310 - 0700+1KUL 330 D

     

    Mumbai

    Service increase from Daily to 9 weekly with new daytime departures, twice a week.

     

    MH174 KUL1040 - 1315BOM 772 24

    MH194 KUL2005 - 2240BOM 772 D

     

    MH175 BOM1445 - 2210KUL 772 24

    MH195 BOM2355 - 0720+1KUL 772 D

  • Malaysia Airlines is increasing service on the Kuala Lumpur - Beijing service from 12JUL08 to 03SEP08, catering the projected increase of number of travellers during Beijing Olympics. Flight MH370/371 will increase from 4 weekly (x457) to 6 weekly (x5), operating with A330. The morning service from Kuala Lumpur, MH378/379 remains 3 weekly.
  • Malaysia Airlines is adding 8th weekly flight to Amsterdam between 28JUN08 and 06SEP08

     

    MH7326 KUL1200 - 1840AMS 744 6

    MH016 KUL2355 - 0635+1AMS 744 D

     

    MH017 AMS1200 - 0605+1KUL 744 D

    MH7327 AMS2230 - 1635+1KUL 744 6

  • Malaysia Airlines is adding extra flight, a 5th weekly service, on the Kuala Lumpur - Rome route. It will operates between 29JUN08 and 31AUG08.

     

    MH7358/AZ7233 KUL2345 - 0555+1FCO 772 7

    MH7359/AZ7232 FCO1345 - 0745+1KUL 772 1

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