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Malaysia Country Report

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Discovery Reports

Airlines are seeking to restore confidence after three tragedies

PUBLISHED : Wednesday, 09 December, 2015, 12:41pm
UPDATED : Wednesday, 23 March, 2016, 5:09pm

Amid tough international trading conditions, Malaysia's airline industry is successfully rebuilding itself after the loss of three planes last year.

Malaysia's flag carrier has since been rebranded and restructured. Its new name is Malaysia Airlines Berhad (MAB) and it will be equipped with new aircraft following the tragic loss of two planes flying under its old Malaysian Airline System Berhad (MAS) banner.

Flight MH370 is believed to have crashed in the Indian Ocean with the loss of all passengers and crew in March last year, while flight MH17 was shot down over war-torn Ukraine four months later, with all 298 people aboard killed.

Christoph Mueller was appointed as the new group chief executive of Malaysia Airlines in May to push through a wide-ranging programme of restructuring that has included cutting the company's workforce by one third. Other measures introduced by the company since he took charge include changing its name, placing orders for new aircraft and upgrading passenger seating in a bid to re-establish the airline's position in a competitive market.

Malaysia Airlines has signed agreements with leasing company Air Lease Corporation for four Airbus A350s. Powered by Rolls-Royce Trent XWB-84 engines, the planes will be delivered by early 2018, and the airline has also taken out an option to lease four additional aircraft from the leasing company.

Last month, Malaysia Airlines unveiled its new A330-300 business class seats at the World Travel Market in London. These will be retrofitted to existing planes, with a phased introduction scheduled to start from April next year. The new seats are 193 centimetres when fully flat and are equipped with a Panasonic 16-inch touchscreen inflight entertainment system, making them one of the best available, says the airline. The seats will be configured to give all business class passengers aisle access, while there will be extra storage space.

"The new seats and configuration have been designed to give a superb space for work, play or sleep. All of our A330 business class seats will now feature fully flat beds, allowing our guests the ultimate in comfort and versatility," Mueller says.

"This product will make us more competitive against other full-service carriers and is part of the airline's push to be more customer-centric, offering new, personalised and innovative products."

The latest initiative under consideration at Malaysia Airlines is whether to introduce a premium economy option for long-haul business travellers. It expects to make a decision on this in the next few months.

Another leading Malaysian carrier, AirAsia, also suffered tragedy last year when one of its planes crashed into the Java Sea off Indonesia in December, killing all 162 people on board. This has not dented the airline's standing within the travel industry, however.

AirAsia has been named Asia's Best and the World's Best Low Cost Airline by consultancy Skytrax in its airlines and airports rankings for seven consecutive years from 2009 to 2015. What's more, it became the first low-cost airline to be awarded Asia's Leading Cabin Crew at the World Travel Awards, Asia and Australasia Gala Ceremony 2015.

AirAsia continues to open new routes to grab market share. It launched daily direct flights from Kota Kinabalu to Wuhan, China, in October, while it is the only airline to fly direct from Kuala Lumpur to Maldives capital Male.

Group chief executive Tony Fernandes and his team have shaken up the Asian aviation market since he bought the loss-making airline for one ringgit (HK$1.80) in 2001, taking on its 40 million ringgit of debt.

Starting out with two old aircraft flying only one route from Kuala Lumpur to Langkawi in 2002, the airline has grown to carry more than 220 million passengers to 88 destinations across the continent today.

Offering low fares aboard the no-frills airline has been the secret of its success, the company says. Continuing this approach, AirAsia offered three million free seats to passengers in a promotion launched last month.