Malaysia Airlines announced it will launch a new regional premium airline in the first half of 2012 in order to regain shrinking market share and make the most of the growing demand for regional travel in Asia-Pacific.
In a humbling statement by Malaysia Airlines, titled Business Plan: Our Way Forward, the carrier announced that it is in a crisis. “If we maintain our current business model, we will be out of cash by the middle of the second quarter of 2012,” the release stated. The decline of the airline is partly attributed to the fact that the carrier’s marketing efforts so far “have been predominantly focused on tactical sales promotions rather than brand-building” in addition to growing competition in the region. "A fundamental and radical overhaul is required to put us back on the path to sustained profitability."
The new premium airline is therefore a key part of the carrier’s plans to reverse a potential disaster. The unnamed carrier will fly a new fleet of Boeing B737-800 aircraft. “The relatively smaller size of the Boeing 737 means the airline can fly to more places where our customers want to travel, at times convenient to their schedules,” revealed the statement. “We also intend to create a separate management structure to focus on the unique customer needs of regional premium travellers.”
Other efforts in the recovery plan include pruning its network and cutting off unprofitable routes. “We are shrinking to grow,” claims the carrier, however which routes will be cut have not yet been announced. Once the carrier returns to a firm financial position, it will again expand its network.
Given the growing amount of wealth within the Asia-Pacific region, a premium carrier seems to be the saving grace for Qantas as well. The Australian flagship carrier also recently announced plans for a similar Asia-based premium carrier (see story here) that will feel like a private jet.
For more information, visit www.malaysiaairlines.com
Alisha Haridasani
