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Breaking news from the MH Rumour Department!!!

 

A new set of routes have been announced as bye bye! KUL-FCO is out, so does KUL-SUB and SIN-PEN-LGK.

 

This is on top of KUL-KHI-DXB, KUL-DXB-DMM, KUL-DXB which have been identified and KUL-JNB and KUL-CPT-EZE which have been officially announced.

 

Date of last service of those routes:

 

DXB/DMM - 12 January 2012

KHI/DXB - 13 January 2012

JNB - 31 January 2012

LGK-PEN-SIN - 7 January 2012

SUB - 30 January 2012

FCO - 2 February 2012

CPT-EZE - 1 February 2012

 

This is of highly credible source as the info was embargoed from MH's internal email.

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MAS to drop seven routes in 2012

 

KUALA LUMPUR, Dec 14 — Ailing flag carrier Malaysia Airlines System (MAS) will cut seven loss-making routes from January next year in a bid to stem losses anticipated this year and in 2012.

 

The affected routes are:

 

• Kuala Lumpur - Surabaya (B737) from January 7, 2012

 

• Kuala Lumpur - Karachi - Dubai (A330) from January 12, 2012

 

• Kuala Lumpur - Dubai - Damman (A330) from January 13, 2012

 

• Langkawi - Penang - Singapore (B737) from January 30, 2012

 

• Kuala Lumpur - Johannesburg (B777) from January 31, 2012

 

• Kuala Lumpur - Cape Town - Buenos Aires (B747) from February 1, 2012

 

• Kuala Lumpur - Rome (B777) from February 2, 2012

 

“Malaysia Airlines regrets for the inconvenience to passengers as a result of these changes and assures that it will honour all forward bookings ticketed to date on the affected routes.

 

“The company will make alternative carrier arrangements, at its own cost, to ensure minimum discomfort to passengers,” MAS said in a statement today.

 

Its chief executive, Ahmad Jauhari Yahya, said the routes account for some 12 per cent of passenger capacity and that their cessation will improve loads, increase yields and boost profit by RM220-302 million next year.

 

He added that the route rationalisation will have minimal impact on Malaysia’s position as a top tourist destination in Asia as the airline will work aggressively with its code share partners to ensure continued connectivity.

 

Last week, MAS revealed its turnaround strategy which aims for an RM1.2-1.5 billion swing in performance from cost saving and productivity measures, as well as a return to profit by 2013.

 

Analysts, however, were sceptical of the airline’s latest round of restructuring, noting that MAS had yet to address operational and structural issues.

 

Source

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Some of those routes were put in place by vested interest, despite fierce opposition internally by people who know better. The DMM ops is a classic case of driving in the dark at top speed with headlights off. Its incredible how blatant such stupidity was. Even those who saw it happened can only look in disbelief.....

 

The person/s who pushed for the decision to do it is still holding a high position in MH, and will continue to contribute more damage. These people and many more like them are TF's assets because, the more they contribute to the foul-up, the more powerful TF's case in showing that its only AK that will save the day......

 

The few who opposed such decisions are now sitting in frustration.

 

How to have a permanent fix like dis......

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maybe they should change the name to 'bauxite' or 'tin' ...that will reflect our mining activities :p

How about Rare Earth Air? Couldn't come in a better time and it actually signify doing the sort of thing where nobody else wants to do - being the frontier!

 

Like many have said, the word "Sapphire" is not a familiar word for the average Malaysian in the street. So the marketing battle is already an uphill struggle!

Makes me wonder how this word is pronounced in Malaysia. For example - the word Souvenir has been pronounced wrongly in Malaysia.

 

According to AJ & Danny - no, Sapphire won't be the name, just the project codeword.

Thank goodness!

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Except KUL-SUB and LGK-PEN-SIN, all other routes are operated 3x weekly. MH will end up with excess aircraft next year. Maybe this will expedite aircraft retirement.

Edited by Johan Z

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What are they going to do with the extra aircraft after closing down all these routes? Some profitable routes should be added up to boost further on the revenue. Else, I'm not sure how a under-utilised assets could help in anyway by downsizing.

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With those PMB aircraft, there is probably the possibility of returning them early. With owned aircraft, they can store them or lease them to other airlines like the new premium airline.

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No. As per the article, KUL-DXB will be terminated on 10 January 2012.

 

The affected routes are:

 

• Kuala Lumpur - Surabaya (B737) from January 6, 2012

• Kuala Lumpur - Dubai (A330) from January 10, 2012

• Kuala Lumpur - Karachi - Dubai (A330) from January 12, 2012

• Kuala Lumpur - Dubai - Damman (A330) from January 13, 2012

• Langkawi - Penang - Singapore (B737) from January 30, 2012

• Kuala Lumpur - Johannesburg (B777) from January 31, 2012

• Kuala Lumpur - Cape Town - Buenos Aires (B747) from February 1, 2012

• Kuala Lumpur - Rome (B777) from February 2, 2012

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With those PMB aircraft, there is probably the possibility of returning them early. With owned aircraft, they can store them or lease them to other airlines like the new premium airline.

 

Do I recall that there was a news article saying that QF was expressing interest to use Malaysian aircraft?

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MAS To Suspend Eight Routes Effective Early 2012 To Cut Costs

 

KUALA LUMPUR, Dec 14 (Bernama) -- Malaysia Airlines will suspend eight loss-making flight routes next year to further control costs.

 

They include the daily Kuala Lumpur-Surabaya routes, which will be suspended effective January 6, thrice-weekly Kuala Lumpur-Dubai (Jan 10), twice-weekly Kuala Lumpur-Karachi-Dubai (Jan 12), twice-weekly Kuala Lumpur-Dubai-Damman (Jan 13), daily Langkawi-Penang-Singapore (Jan 30), thrice-weekly Kuala Lumpur-Johannesburg (Jan 31), twice-weekly Kuala Lumpur-Cape Town-Buenos Aires (Feb 1) and thrice-weekly Kuala Lumpur-Rome (Feb 2).

 

Alternative arrangements on other carriers would be made for those who have booked tickets for flights on these routes after the suspension dates, MAS said in a statement Wednesday.

 

It said that the suspension will be gradual, in line with its route rationalisation exercise unveiled last week.

 

"The withdrawal was based on our own independent internal profitability and yield analysis," Malaysia Airlines' group chief executive officer Ahmad Jauhari Yahya said.

 

"This accounts for almost 12 per cent of our passenger capacity and we estimate that the ongoing route rationalisation will improve loads, increase yields and have a profit impact of RM220 million to RM302 million for 2012," he said.

 

The above route rationalisation is expected to have minimal impact on Malaysia's position as a top tourist destination in Asia "as we will work aggressively with our code share partners," he said.

 

Ahmad Jauhari said that through the national airline's existing arrangements with the code sharing partners, it will continue to promote connectivity between Malaysia and key international destinations as well as contribute towards the overall efforts by the various authorities to increase tourist arrivals to Malaysia.

 

"We also hope to return to these markets after we have stabilised our business.

 

"Malaysia Airlines regrets the inconvenience caused to passengers as a result of these changes and assures that it will honour all forward bookings ticketed to date on the affected routes," he said.

 

Ahmad Jauhari said that it will make alternative carrier arrangements, at its own cost, to ensure minimum discomfort to passengers.

 

"The impact of the above rationalisation on Malaysia Airlines' cargo operations is also expected to be minimal as the national carrier continues to maintain its key cargo destinations in the United Kingdom, Europe, Orient, Australia, Middle East, South Africa and the United States," he said.

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Real sad to see Rome is out of MH's network... Hope it could come back soon. So now people who travelling to Rome has to either take KL, TG or SQ. Perhaps D7 could start this route soon...

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So the CEO said about 40% of MH's routes are unprofitable. Just wondering how many routes does MH have now? I suppose these 7 or 8 sectors are just the beginning...

 

Time to start chopping headcounts.

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Some of those routes were put in place by vested interest, despite fierce opposition internally by people who know better. The DMM ops is a classic case of driving in the dark at top speed with headlights off. Its incredible how blatant such stupidity was. Even those who saw it happened can only look in disbelief.....

 

The person/s who pushed for the decision to do it is still holding a high position in MH, and will continue to contribute more damage. These people and many more like them are TF's assets because, the more they contribute to the foul-up, the more powerful TF's case in showing that its only AK that will save the day......

 

The few who opposed such decisions are now sitting in frustration.

 

How to have a permanent fix like dis......

 

 

Capt Nik: unfortunately this is how the government rolls. Nothing is transparent, everything done is a superficial touch up. DMM flights were amazing considering there's nothing much there apart from the Saudi Aramco complex. As you said, Tony is rubbing his hands gleefully. He wanted routes opened up to competition when it suits him. On the other hand, he is slowly chipping away MH's route network, leaving AK ALONE in many routes (SUB anyone?). I won't be surprised if we see D7 fly to FCO, JNB, CPT. Stupid stupid people, played out in broad daylight, in public. How are they qualified to run the country? What a shame. I hope that those who are genuine will be able to eventually turn MAS around. Good luck to them. They are going to need it.

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I must say that what surprised me the most is JNB, I always imagined that there's enough premium load on this sector.

 

It's amazing how KUL-KHI-DXB on ailing A330 managed to survive the axe this long against the mighty EK.

 

FCO could be made to work again if a joint service with QF ever to materialize someday. My theory is that FCO managed to survive all these while mainly due to SkyTeam membership ambitions.

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I must say that what surprised me the most is JNB, I always imagined that there's enough premium load on this sector.

 

It's amazing how KUL-KHI-DXB on ailing A330 managed to survive the axe this long against the mighty EK.

 

FCO could be made to work again if a joint service with QF ever to materialize someday. My theory is that FCO managed to survive all these while mainly due to SkyTeam membership ambitions.

 

Keno, I am also surprised about JNB. However, I am sure TF has some plans for that route.

KUL-KHI-DXB is just an amazing route, crappy A330s with no PTVs against 3x daily EK. Such a shame, there was a point in time (before the 744s) that DXB was a major hub for MAS.

 

FCO - I agree, they continued to serve as they were codesharing on AZ's FCO-LHR service (part of their skyteam alignment which included moving to terminal 4 in LHR). Even the check in for MAS in LHR is done by AZ.

Edited by Izanee

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Capt Nik: unfortunately this is how the government rolls. Nothing is transparent, everything done is a superficial touch up. DMM flights were amazing considering there's nothing much there apart from the Saudi Aramco complex. As you said, Tony is rubbing his hands gleefully. He wanted routes opened up to competition when it suits him. On the other hand, he is slowly chipping away MH's route network, leaving AK ALONE in many routes (SUB anyone?). I won't be surprised if we see D7 fly to FCO, JNB, CPT. Stupid stupid people, played out in broad daylight, in public. How are they qualified to run the country? What a shame. I hope that those who are genuine will be able to eventually turn MAS around. Good luck to them. They are going to need it.

 

Well said! Macau, Surabaya, Yogyakarta, Bandung.. however, one can only blame MH for putting up a feeble fight (inferior product, bad timing and frequency), then losing these routes for AK to monopoly. Now TF's new tagline is 'wasteful competition'....yeah, there will not be any wasteful competition should AAX start flying to FCO, JNB.

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MAS to drop seven routes in 2012

 

KUALA LUMPUR, Dec 14 — Ailing flag carrier Malaysia Airlines System (MAS) will cut seven loss-making routes from January next year in a bid to stem losses anticipated this year and in 2012.

 

The affected routes are:

 

• Kuala Lumpur - Surabaya (B737) from January 7, 2012

 

• Kuala Lumpur - Karachi - Dubai (A330) from January 12, 2012

 

• Kuala Lumpur - Dubai - Damman (A330) from January 13, 2012

 

• Langkawi - Penang - Singapore (B737) from January 30, 2012

 

• Kuala Lumpur - Johannesburg (B777) from January 31, 2012

 

• Kuala Lumpur - Cape Town - Buenos Aires (B747) from February 1, 2012

 

• Kuala Lumpur - Rome (B777) from February 2, 2012

 

“Malaysia Airlines regrets for the inconvenience to passengers as a result of these changes and assures that it will honour all forward bookings ticketed to date on the affected routes.

 

“The company will make alternative carrier arrangements, at its own cost, to ensure minimum discomfort to passengers,” MAS said in a statement today.

 

Its chief executive, Ahmad Jauhari Yahya, said the routes account for some 12 per cent of passenger capacity and that their cessation will improve loads, increase yields and boost profit by RM220-302 million next year.

 

He added that the route rationalisation will have minimal impact on Malaysia’s position as a top tourist destination in Asia as the airline will work aggressively with its code share partners to ensure continued connectivity.

 

Last week, MAS revealed its turnaround strategy which aims for an RM1.2-1.5 billion swing in performance from cost saving and productivity measures, as well as a return to profit by 2013.

 

Analysts, however, were sceptical of the airline’s latest round of restructuring, noting that MAS had yet to address operational and structural issues.

 

Source

 

on domestic front, just heard that they are stopping BKI-SDK, have not heard of any increase in capacity from MasWing in view of this pull out. And of course, no more non-stop service to KUL by either MH or FY from SDK. There are going to be many unhappy travellers in Sandakan.

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I thought KUL-ROM was making money based on the number of pax and the amount of money that I have to pay to get on the flight...

 

The flights that I took are always full to the brim...

 

damn, no more direct flights to italy after this...

Edited by Jeffery Lim

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on domestic front, just heard that they are stopping BKI-SDK, have not heard of any increase in capacity from MasWing in view of this pull out. And of course, no more non-stop service to KUL by either MH or FY from SDK. There are going to be many unhappy travellers in Sandakan.

 

AirAsia introduces additional flight frequencies from Kuala Lumpur to Kota Kinabalu & Sandakan

 

 

December 14, 2011

 

SEPANG – AirAsia is introducing additional flight frequencies from Kuala Lumpur to Kota Kinabalu and Sandakan, enhancing the airline’s connectivity to these destinations.

 

The new additional flight frequencies present 14x daily flights (13x daily previously) from Kuala Lumpur – Kota Kinabalu (starting 6 February 2012). Kuala Lumpur – Sandakan will be available 3x daily (2x daily previously) starting 6 February 2012.

 

To kick off the additional flight frequencies, AirAsia is offering special promotional fare to all travelers. Enjoy special low fares from Kuala Lumpur to Kota Kinabalu or Sandakan with all-in-fares from as low as RM69*. Booking period for this exclusive promo is from 14 December - 25 December 2011, for the travel period from 6 February – 27 October 2012.

 

The airline is also enhancing connectivity from Kota Kinabalu to Hong Kong by introducing additional flight frequencies with 10x flights weekly (7x weekly previously). Enjoy more convenience and additional flight time options, with all-in-fares from as low as RM189*. Booking period is from 14 December - 25 December 2011, for the travel period from 21 February – 27 October 2012.

 

AirAsia Regional Head of Commercial, Kathleen Tan said, “With these additional flight frequencies, our guests can look forward to added convenience and the liberty to pick the best flight times for their travels, as there are now more options on flight times available for these destinations. Furthermore, we are currently the airline with the highest frequency for the Kota Kinabalu – Hong Kong route, providing guests with seamless connectivity between these two places. Take advantage of this excellent promotion and treat yourself with the exceptional ‘AirAsia Experience’!”

 

The promotion is also available via mobile at mobile.airasia.com, and via AirAsia apps for Blackberry, iPhone and Android phones. The apps are available for download at Blackberry App World, iTunes App Store and Android Marketplace by searching for the keyword AirAsia.

 

To make holidays more interesting and memorable, guests may log on to www.airasiago.com to be able to mix and match their preferred tour and activities, apart from affordable holiday packages and lodging from over 70,000 hotels worldwide. Together with the partnership with Expedia, the travel portal has 140,000 hotel partners around the world.

 

AirAsia recently reduced the processing fee which is applicable for all online transactions made via credit or charge cards on its website, from RM8 per guest per sector to only RM5 per guest per sector. Direct debit transaction remains FREE of charge with seven of AirAsia’s bank partners in Malaysia (Maybank, CIMB, Public Bank, RHB, Hong Leong Bank, Bank Rakyat, Ambank).

 

http://www.just4airlines.com/j4_dox/email/rss.mv?story_id=54428

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Interesting analyst report from a research house. Some selective quotes:

 

Your loss is my gain - CIMB

Winds of change are swirling in the Malaysian aviation industry. AirAsia yesterday announced frequency additions on routes left behind by MAS/Firefly. In the process, AirAsia’s market share will increase at the expense of the national carrier, and yields are likely to improve.

 

What Happened

AirAsia announced yesterday that it will, from February 2012, increase frequencies from Kuala Lumpur to Kota Kinabalu (KK) and Sandakan, as well as from KK to Hong Kong, partially taking over capacity that has been or will be abandoned by MAS and Firefly. It also announced expected long-haul route cuts to Rome, Johannesburg, Cape Town, Buenos Aires, Dubai, Damman and Karachi, and its pullout from short-haul routes like the daily Langkawi-Penang-Singapore flights

and KL-Surabaya. MAS’s route cuts will take effect in January 2012.

 

What We Think

The developments are in the direction of our expectations. The announcements of frequency additions by AirAsia and route removals by MAS are some of the CCF’s most tangible benefits to AirAsia. AirAsia will continue to garner more market share next year as it fills part of the void left behind by the capacity reductions. Its yields will also improve following the removal of Firefly as an LCC competitor and MAS’s selective pullout of routes to East Malaysia.

Apart from that, MAS is likely to stop plying international routes from its KK hub, which are currently not profitable. This is an excellent opportunity for AirAsia to expand further. Given its much lower cost base, it is likely to be able to earn profits from these routes.

 

MAS/Firefly route cuts provide opportunities to AirAsia

AirAsia said during its 3Q11 results conference call last month that it was adding two leased A320s to its Malaysia fleet in 4Q on top of the three new aircraft deliveries that Malaysia will be allocated this year. The reason for this move has now been made very clear. AirAsia is using the opportunity provided by the withdrawal of MAS and Firefly from several domestic and regional routes to expand its schedule and network capacity.

 

In other words, AirAsia is expanding on the back of opportunities left behind by MAS and Firefly, by at least partially restoring the capacity removed by the two latter airlines and taking the rest of the benefits from potentially higher ticket prices/yields since net capacity on the relevant routes will still be reduced as the capacity withdrawals exceed capacity additions by a large margin.

 

MAS cuts domestic, regional, and international routes, handing greater market share to AirAsia

MAS announced yesterday that effective January and early February 2012, it will cut 8 routes.

 

Most relevant to AirAsia are the cuts to Surabaya and the Langkawi-Penang-Singapore route. AirAsia currently flies twice/day on KL-Surabaya and the MAS

withdrawal will reduce capacity on the route by 12%, taking into account that Indonesia AirAsia and Merpati also service the route.

 

AirAsia and MAS currently both fly Langkawi-Penang once daily and MAS’s withdrawal will cut capacity on the route by 45%. Between Penang and Singapore, AirAsia flies three times a day while MAS flies once daily. MAS’s withdrawal will reduce route capacity by 9% (Tiger, Jetstar, and SilkAir also serve the route). The reduction in seat supply is likely to benefit AirAsia and the remaining carriers through higher yields and/or higher share of passenger volumes.

 

Firefly has stopped its domestic LCC business; AirAsia takes advantage by expanding frequencies to KK and Sandakan

In mid-November 2011, Firefly stopped selling tickets on the 189-seater B737-800 planes on routes between KL and KK, Kuching, Sandakan and Sibu. Not coincidentally, AirAsia yesterday announced that it will from 6 February 2012 increase its KL-KK flights from 13 to 14 times/day and step up its KL-Sandakan flights from two to three times/day. This shows that AirAsia is taking over some of the capacity abandoned by Firefly. Additional frequencies by AirAsia to Kuching and Sibu cannot be ruled out.

 

Despite the AirAsia capacity addition, the capacity of KL-KK will still be reduced as Firefly has withdrawn six flights/day while AirAsia is only adding one additional flight a day. Similarly for KL-Sandakan, Firefly has withdrawn two daily flights while AirAsia is only putting on one additional daily frequency. This shows that AirAsia is likely to reap the rewards from Firefly’s withdrawal from the East Malaysia routes partly through increased passenger volume and partly through higher average fares.

 

AirAsia planning increase in KK-HK frequencies in anticipation of MAS withdrawal

MAS has not announced definite cuts to its international routes from the KK hub but earlier indicated that these are on the chopping board. In anticipation

of the MAS move, AirAsia will from 21 February 2012 increase its KK-Hong Kong flights from seven times/week (once daily) to 10 times/week, a net increase of 24 one-way flights/month. MAS is currently flying 56 times/month on the KK-HK route. Hence, if MAS abandons the KK-HK route altogether, there will be a net 15% reduction of capacity (Dragonair also serves the route).

 

From KK, AirAsia also flies to Taipei and Shenzhen, and may benefit from reduced competition to Taipei if MAS pulls out. AirAsia does not currently fly

from KK to Seoul, Perth, Tokyo or Osaka. However, if MAS cancels its flights from KK to the latter four destinations, it may open up new route opportunities

for AirAsia.

 

MAS may withdraw from KL-Tawau/Sibu, potentially leaving AirAsia as the monopoly operator on the routes

We believe that MAS is also likely to announce in the near future reductions to its West Malaysia to East Malaysia crossings. While we do not expect MAS to

reduce frequencies on truck routes like KL-KK/Kuching, it could cut less profitable routes like KL-Tawau/Sibu. The airline currently flies 11 times/week on KL-Tawau while AirAsia flies 21 times/week. On KL-Sibu, it flies 14 times/week while AirAsia flies 35 times/week. Hence, AirAsia dominates the capacity on these two routes and the domination could turn into a monopoly if MAS axes these routes. We believe MAS will retain KL-Miri/Labuan/Bintulu as there is likely to be more business traffic on these routes and average ticket pricing should be higher.

So up next that will see massive MH withdrawal is Tawau and Sibu (again).

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