As mentioned by many, airlines tend to charge more for O&D tickets originating from their home hubs compared to their transiting tickets. This may partly explain the less competitiveness of MH fares compared to foreign airlines for flights originating from KUL. MH may not be the first choice of many fellow Malaysian in term of the ticket prices but I know at least it is very popular among travelers from Australia to India via KUL.
For an airline becomes successful, it needs strong supports from the people of its own country.
Many of my Australian & Singaporean friends would choose QF and SQ over other foreign airlines for destinations these airlines serve despite the higher fares. They have faith in the airlines they familiar with.
I remember the same happened to MH in the 80s during its glory days. For destinations that MH served back then, the people I knew in Malaysia would pick MH as their first choice and they felt proud flying with MH. Flying with SQ via SIN always seemed as a sub-superior and cheaper option.
One of the biggest task of MH management now I think is how to win back the confidence and supports from the fellow Malaysian. I truly hope the day will come back again.
At one time, I paid a premium for MH ticket until surcharge on Enrich redemption ticket was more expensive than EK paid ticket. Pax could be loyal to airlines, doesn't mean airlines is loyal to pax.
I think MH suffers similar problems with its brand image as Proton. Many people like to "tumpang glamour" and associate themselves with success - MH is now looked upon as a loser. Part of the reason for that image is the continued financial losses as it indicates that the management may be weak or poor. Winning industry awards is also considered important as many like to fly with a "winning airline".
So, apart from getting their financials back on track, it would be useful if MH picks up an award or two each year. That may then cause people to "try them out" to see what is so special about them.
Many awards could be bought. MH had 5 star but delivered 2 star experience.