Friday, December 4, 2015

Emirates codeshare deal raises Malaysia Airlines profile

Valued partner: MAB said it had entered into a codeshare partnership with Emirates, giving MAB passengers access to 90 locations in the United States, Europe, the Middle East and Africa, served from Emirates’ Gulf hub in Dubai. — AFP
PETALING JAYA: A day after Malaysia Airlines Bhd (MAB) shocked the entire global aviation fraternity with a codeshare partnership with the world’s biggest international carrier Emirates, it said the negative trend of revenue per available seat km (ASK) has stopped and reversed.

Its cost-saving measures and renegotiation of vendor contracts remain a major imperative of its turnaround plan, MAB said in its first progress report since it took over the airline operations from the former Malaysia Airlines.

It is amazing how Christoph Mueller (MAB group chief executive officer) got Emirates to agree.

“We always wanted something like this but at the back of our minds, we know MAB is not in the same league as Emirates, but Mueller pulled it off.

“It is a brilliant move,” said Maybank Investment Bank senior analyst Mohshin Aziz.

Even MAB's rivals agree. AirAsia boss Tan Sri Tony Fernandes said: “I think it is very good”.

Brendan Sobie, an analyst with CAPA Centre for Aviation, also felt the deal with Emirates “made sense”.

Late Wednesday night, MAB said it had entered into a code-share partnership with Emirates, giving MAB passengers access to 90 locations in the United States, Europe, the Middle East and Africa, served from Emirates’ Gulf hub in Dubai.

However, it will also sever ten code-share agreements with existing partners and will drop its own direct flights to Paris and Amsterdam at the end of January 2016.

With that, its only direct access to Europe will be via London, where it will maintain double daily flights.

Emirates’ customers, in turn, will have access to MAB's extensive Asia-Pacific and domestic network and it will be effective February next year.

Mueller was quoted as saying that “people will now buy tickets of MAB to reach these final destinations, so we will take back market share in terms of ticket sales”.

Cutting a deal with Emirates has raised MAB's profile and hopefully will change its fortunes. MAB has been bleeding for several years now and suffered a setback with two major air crashes last year.

To turn the airline around, Mueller was hired and a new company has taken over the operations.

On the progress report, Mueller said the airline planned to boost customer experience with a new product strategy and that details will be unveiled over 18 months. MAB on-time performance had also improved.

Though the progress report did not give specific details on loads, yields or even absolute ASK numbers, Mueller said “it is very rewarding to see the new team of employees creating a truly new airline, entirely customer focused and commercially led”.

“We still have a long way to go, but existing and new partners believe in our success and MAB has been set on a path towards reclaiming its position as one of the world’s leading airlines.”

MAB added that it will set up seven crew bases across Peninsular Malaysia, Sabah and Sarawak to improve connectivity and service quality.

A new group structure is in the works to streamline its operations into individual profit centre subsidiaries such as airline, ground handling, cargo, engineering and aircraft ownership to ensure profit and loss accountability and unlock the value of assets by driving new levels of operational and financial efficiency.

The airline will also dispose its non-core assets for better management focus on its core business, MAB said.

Source: The Star Online | 4 Dec 2015

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