MAG to set up new airline for pilgrim charters

MAS CEO Peter Bellew (inset), when contacted by StarBiz yesterday, said “there are no plans for partners at the very start.’’ However, he said “it will start life under MAG but likely will have other financial partners in the future as it becomes a separate business."

PETALING JAYA: Malaysia Airlines Group (MAG) is seeking internal candidates to run a new airline dedicated to fly Muslim pilgrims to Mecca using its surplus fleet of A380 super jumbos.

“We will apply for a new airline operating certificate (AOC) in the first quarter of next year,” Malaysia Airlines Bhd (MAS) chief executive officer Peter Bellow said in an internal memo to his staff.

“We are looking for a super start-up team to get this airline up and running,” he said, adding that the positions are open to internal candidates.

The airline group, which owns MAS, will phase out the A380 aircraft from its London route, which has remained unprofitable, by 2018 due to intense competition mainly from Middle Eastern carriers, and replace them with the smaller A350 aircraft.

The new airline venture, if successful, could spur other airlines to do the same and create a new second-hand market for the A380 aircraft, as MAG will add more planes to its fleet.

Capa Centre for Aviation in a report yesterday said MAS was hoping to attract a combination of foreign and local investors to take control of the planned new airline and all six A380s.

MAS CEO Peter Bellew, when contacted by StarBiz yesterday, said “there are no plans for partners at the very start.’’

However, he said “it will start life under MAG but likely will have other financial partners in the future as it becomes a separate business.’’

MAS is a unit of MAG, so is Firefly and MAS Wings.

Capa in a report said MAS was planning to set up a new airline to operate its A380 fleet on religious pilgrimage charters to Saudi Arabia.

All six of the airline’s A380s will be reconfigured from 386 to up to 700 seats by the end of 2018, and transferred to a new operator’s certificate.

The group is calling the plan “Project Hope” – an appropriate name given its current predicament with the A380 fleet, said Capa.

Bellew, quoted by Capa TV, said the airline planned a more extensive retrofit for the A380 fleet, resulting in seat capacity increasing to 650 to 700 seats.

The densest A380 configuration currently in operation is 615 seats, made up of 557 economy and 58 business class seats operated by Emirates.

Capa added that Project Hope has generated significant interest from investors in Malaysia and internationally, giving MAS hope that the project will succeed and the group will be able to resolve its A380 predicament.

“The key is to have the support of Saudi authorities. MAS has already discussed Project Hope with Saudi authorities, which are supportive,’’ it said, adding that it needed multiple operator’s certificates if it wanted to operate beyond Malaysian shores.

The haj is an Islamic pilgrimage to Mecca in Saudi Arabia and takes place once a year, with more than one million people travelling by air, while the umrah pilgrimage can be taken at any time of year.

Source: The Star | Business | 23 November 2016