Malaysia Airlines announced a widespread network rationalisation, following up from the Business Plan: Our Way Forward it released last week outlining ways in which the carrier can pull itself out of a potential bankruptcy and onto a stable financial path.
As stated in the plan, the carrier will “shrink to grow," which involves cutting off the following unprofitable routes to stem losses:
- Daily Kuala Lumpur-Surabaya route, effective January 7 onwards
- Twice weekly Kuala Lumpur-Karachi-Dubai route, effective January 12 onwards
- Twice weekly Kuala Lumpur-Dubai-Damman route, effective January 13 onwards
- Daily Langkawi-Penang-Singapore route, effective January 30 onwards
- Thrice weekly Kuala Lumpur-Johannesburg route, effective January 31 onwards
- Twice weekly Kuala Lumpur-Cape Town-Buenos Aires route, effective February 1 onwards
- Thrice weekly Kuala Lumpur-Rome route, effective February 2
For all passengers with bookings on the dates mentioned, the carrier will arrange for alternative arrangements, such as booking a seat on a different carrier.
"The withdrawal was based on our own independent internal profitability and yield analysis. This accounts for 12 percent of our passenger capacity and we estimate that the ongoing route rationalisation will improve loads, increase yields and have a profit impact of RM220-302 million (US$69-94 million) for 2012," said Ahmad Jauhari Yahya chief executive officer of Malaysia Airlines.
The business roadmap stated that if the carrier maintains its current business model, it would be bankrupt by the middle of the second quarter of 2012. “A fundamental and radical overhaul is required to put us back on the path to sustained profitability,” stated the release, which also includes plans for a new regional premium carrier (see story here).
For more information, visit www.malaysiaairlines.com