Malaysia Airlines back on expansion track after SARS crisis

KUALA LUMPUR, July 31 (AFP) - Malaysia Airlines said Thursday it is back on track for expansion after recovering from the recent SARS crisis, with plans to boost Asian routes, recruit some 800 staff and take on larger aircraft.

Sales and marketing senior general manager Ahmad Fuaad Dahlan said losses suffered during the SARS period, when the flag carrier had to ground eight aicraft and cut capacity by eight percent, would "definitely affect our bottomline."

BizVantage – Personalized business, investment or technology Intelligence: the ultimate advantage.
Try the free, no-hassle, 6 month trial!

However, the airline was not as badly hit as other regional carriers because Malaysia, which had five probable SARS cases including two deaths, was not at the "epicentre" of SARS, he said.

It consolidated its operations during the tough times and average passenger load factor has now recovered to above 70 percent from below 50 percent at the height of the outbreak, he said.

"We are back on track. July is a good month," he told reporters after a ceremony to announce resumption of flights to China.

"We are looking at all our plans again, not only in terms of routes but also product development. We are moving forward to gear back towards an expansion approach."

The airline is also "mindful of the fact that we have to improve the yield factor," he added.

Ahmad Fuaad said Malaysia Airlines has shifted its focus back on Asia with routes planned to untapped destinations in Indonesia, China and other regional countries.

China is a key growth point and Malaysia Airlines will resume flights to Beijing, Shanghai, Xiamen and Hong Kong from Friday, and to Guangzhou from September 29, he said.

On August 14, it will launch a new flight from Kuala Lumpur to Manado in Indonesia, and subsequently to Jogjakarta and Padang.

"There is no point for us to fly all over. The most important is the Asian connection," he said, adding that the ultimate aim is to have three or four daily flights to key regional destinations.

Regional flights now contribute only about 25-30 percent of Malaysia Airlines' revenue but Ahmad Fuaad said this is expected to grow substantially in the long-term.

To cater for future growth, he said it is "looking at the possibility of having larger capacity aircraft" but is still studying the best options due to its regional emphasis.

The carrier now has a fleet of 100 aircraft.

Malaysia Airlines currently faces a staff shortage and plans to recruit some 800 cabin crew, as originally planned under an earlier expansion program which was postponed due to SARS, he added.

With confidence in air travel returning, Ahmad Fuaad foresees a "slow move back to normal pricing" but said fare promotions may continue for some time in anticipation of a longer recovery period by other airlines.

It is also still premature to say whether the current robust demand in the market can be sustained, he added.

en/bmm

Malaysia-air-SARS