Malaysia Airlines (MAS) will be withdrawing its services on eight loss-making routes starting January 2012 to cut losses and improve its regional network.
The affected services are: daily Langkawi-Penang-Singapore, twice weekly Kuala Lumpur-Karachi-Dubai, twice weekly Kuala Lumpur-Dubai-Damman, daily Kuala Lumpur-Surabaya, thrice weekly Kuala Lumpur-Johannesburg, twice weekly Kuala Lumpur-Cape Town-Bueno Aires, thrice weekly Kuala Lumpur-Dubai and thrice weekly Kuala Lumpur-Rome.
“The withdrawal was based on our own independent internal profitability and yield analysis. This accounts for almost 12% of our passenger capacity and we estimate the ongoing route rationalisation will improve loads, increase yields and have a profit impact of RM220 million-302 million for 2012,” said CEO Ahmad Jauhari Yahya.
The rationalisation of these routes is also in line with MAS’s focus to make Kuala Lumpur International airport (KLIA) the hub of its global network, and MAS will retime its existing frequencies to increase connectivity between KLIA and global destinations, said the airline.
The carrier also expects the rationalisation to have minimal impact on its cargo operations and Malaysia’s position as a top tourist destination.
To tap on strong growth in regional demand, the carrier will increase its frequencies to key regional cities, said MAS.
Last week, the airline unveiled a business plan to bring the airline back to profitability by 2013. It had said then that it will stem losses by cutting loss-making routes, spin off ancillary businesses and set up a premium regional carrier by 2012.
MAS incurred a loss of M$1.25 billion for the first nine months of 2011 and does not expect to make a profit for the full year.
Source: Air News Times