According to Malaysia's business daily, Business Times, MAS is said to have been looking into the possibilty of resuming some of the destinations that had been suspended or going to be suspended. What do you think? I think the most likely destination to survive the suspension decision is Auckland and Zurich. After all, both of these destinations are served with quite high capacity. Auckland with 5 times weekly B747 and Zurich with 4 times weekly B777. Zurich is the last destination to be suspended under the route rationalization program. Hopefully, they will revive New York as well! Although they had always mention that the New York's suspension is only temporary, they had yet to give the date they will resume its services. Here's the press:
MALAYSIAN Airline System Bhd (MAS) is looking into the possibility of resuming flights to some of the 12 international routes it recently terminated under the first phase of the carrier's route rationalization program. The suspension on the 12 destinations, which deemed "unprofitable", may be lifted if costs of servicing these routes can be justified, sources told Business Times.
"This may also include MAS' twice weekly flights to Karachi, Pakistan, which were suspended after the September 11 attacks on the US," one of the sources said. The other 11 international destinations were Manchester, Zurich, Rome, Munich, Beirut, Cairo, Istanbul, Buenos Aires, Darwin, Cairns and Auckland. MAS suspended its services to Karachi in early October while services to the rest of the cities were terminated beginning October 28.
Sources said the possibility of reviewing the earlier decision was raised during one of the many board meetings carried out by the carrier's management recently. "There have been a lot of changes lately, with airlines reducing frequencies to one destination and increasing on another. Maybe MAS can take advantage of these changes," the sources said.
MAS' neighboring airlines, namely Singapore Airlines (SIA), and Thai Airways, have recently announced that they will cut back flights to the US. SIA, which is Asia's third-largest carrier by sales, said on Wednesday it would increase flights to Tokyo from April next year while cutting back on other routes. The airline will add three weekly flights to Tokyo from mid-April, bringing the total number of weekly flights to 20.
Last month, it said it would cut flights to the US and Japan next year to cope with the fall in travel demand by reducing seating capacity to the US by 20 per cent and to Japan by 13 per cent. A similar move is also to be taken by Thai Airways, which will cut flights to the US by half and increase frequencies to Japan, where demand has surged.
MAS, when announcing its first-half report to the Kuala Lumpur Stock Exchange recently, said it might have to make additional changes to its turnaround program announced in July, after considering the present challenging business environment. The comprehensive turnaround program in July, to be implemented over the next six months, was outlined to achieve a pre-tax profit of RM341 million and a net income of over RM1.5 billion by the year ending March 31, 2004.
MAS had announced its route rationalization program in October, which would see the national carrier reducing total frequencies by 15 per cent to 397 from 423. By March next year, when the second phase of the route rationalization is scheduled to take place, the frequencies are expected to stabilize to 405.
MAS managing director Datuk Mohamed Nor Yusof had said that dropping the 12 routes, mostly in Europe and Australia, would help the national carrier save RM190 million annually. Instead, the carrier will increase its frequencies to regional destinations, including Tokyo, Bangkok, Jakarta and several cities in China.
The carrier also suspended its three times weekly services to Newark Airport in New York since the September 11 attacks on the US, but continues to operate its daily service to Los Angeles. As of March 31 this year, Europe contributed the most to MAS' revenue, which is 24 per cent, followed by domestic operations at 16 per cent, Orient at 15 per cent, Asia Pacific and South Pacific at 14 per cent each, and North America at 8 per cent.
At the Kuala Lumpur Stock Exchange yesterday, MAS' shares raised 13 sen to close at RM2.42, which analysts attributed to the appointment of Pengurusan Danaharta Nasional Bhd chairman Datuk Azman Yahya to its board. Azman, who is also the chairman of Corporate Debt Restructuring Committee, has been appointed independent and non-executive director to the national carrier.