MAS cuts seven routes

KUALA LUMPUR: On Dec 5, it declared that it was in crisis. Yesterday, Malaysia Airlines (MAS) announced that it will cut seven loss-making routes from next month.

The affected routes are: • Kuala Lumpur - Surabaya (B737) from Jan 7• Kuala Lumpur - Karachi - Dubai (A330) from Jan 12• Kuala Lumpur - Dubai - Damman (A330) from Jan 13• Langkawi - Penang - Singapore (B737) from Jan 30• Kuala Lumpur - Johannesburg (B777) from Jan 31• Kuala Lumpur - Cape Town - Buenos Aires (B747) from Feb 1• Kuala Lumpur - Rome (B777) from Feb 2

MAS chief executive officer Ahmad Jauhari Yahya said the routes account for some 12 per cent of passenger capacity and the suspension of these services will improve loads, increase yields and boost profit by RM220-302 million next year.

“Malaysia Airlines regrets 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,” it said in a statement.

However, a point to note is that AirAsia -- which swapped shares with the national carrier in October -- flies the Langkawi-Penang–Singapore route, as well as Surabaya and has landing rights in Dubai and Karachi.

Last week in an executive summary to shareholders, Ahmad Jauhari said MAS was in "crisis". It said while it anticipated losses next year, it was also hopeful that MAS will see a turnaround in 2013, with RM1.5 billion in savings from cost-cutting measures.

In yesterday's statement, he said the route rationalisation will have minimal impact on Malaysia's position as a top tourist destination in Asia. He explained that the airline will work aggressively with its code share partners to ensure continued connectivity.

MAS has incurred a net loss of RM1.2 billion in the first three quarters of this year, where over 40 per cent of its routes are loss-making.

Meanwhile, Tan Sri Tony Fernandes, budget carrier AirAsia chief, has made overtures to Australian airlines Qantas, urging it to set up base in Kuala Lumpur if it was serious about expanding in the region.