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Week 37

Airline News

MAB postpones rebranding and decides to keep MASWings and Firefly – for now

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September 11th 2015

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Malaysia Airlines Berhad (MAB), in operation since September 1, will announce the reduction of its fleet in the next few days. “We have some capacity reduction in certain markets that is basically already in place. The company is in the midst of the exercise and will announce it in the next couple of days,” MAB chief, Christoph Mueller, told the New Straits Times. Read More » MAB pilots told This Week in Asia-Pacific Aviation in July that the carrier’s 13 remaining B777-200ERs would be scrapped or sold by early next year.

Mueller added MAB would keep its MASWings, Firefly, MASEngineering and MASKargo subsidiaries as standalone entities for now, despite previous reports that the regional governments of Sabah and Sarawak were likely to acquire MASWings and Firefly.

The MAB chief said the carrier’s rebranding exercise was on-going. Details would emerge in 12 to 18 months because the airline was focused on operational aspects for now. “The priority in the next couple of months will be to get the basics right. We will then start the year by renewing our products,’ he said. “In the next a couple of months we are going to renew the customer experience. We are considering a very light brand refresh so that our customers and employees can feel the fresh start.”

Product enhancements would include new long-haul business class products, information technology systems, catering and food concepts. “We do not have the financial means to work with a bang. We can’t repaint aircraft and refurbish all seats overnight. What you should expect is a quick succession of announcements and quick cut-over dates where we will work on seats, caterers, in-flight entertainment and so on,” Mueller said.

At press time, Air Lease Corporation and MAB signed long-term leases for four new A350-900s, with options for two more of the type as well as two A330-900neo.

Sovereign wealth fund, Khazanah Nasional, said it would “soon” disburse another 1.3 billion ringgit ($307 million) in conditional investment funding to MAB to pay for termination packages to approximately 7,000 staff the old MAS shed.

To fill the Kuala Lumpur to Perth gap created by MAB’s cancellation of the route, the chief executive of the Lion Air Group’s Malaysian offshoot, Malindo Air, said he hoped to receive approval for opeate the route next month. Chandran Rama Muthy said he would launch B737 operations to Western Australia by November. Founded in March 2013, Malindo has eleven ATR72-600s, six B737-800s and six -900s. It expected to accept delivery of another four B737s by year-end.

Fresh competition for both MAB and Malindo is on the horizon after Indonesia last week abandoned a punitive policy that had forced low-cost carriers (LCCs) to charge higher prices. The ruling was criticised by some carriers after it was enacted in a reaction to the Indonesia AirAsia crash last December 28. The rollback, which will become effective on September 28, permits LCCs to sell tickets for as low as 30% of the maximum fare of full service carriers, rather than the present 40%. The reversal represented a nod to growing business concerns that the weakening Indonesian and Malaysian currencies, coupled with slowing economies, was cutting into profits at Southeast Asia’s carriers. Suprasetyo, Indonesia’s transportation ministry director-general for aviation, said the lower price level was intended to bolster consumer purchasing power.

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