Leverage on both Malaysia Airlines, AirAsia — CEO
KOTA KINABALU: There are two champions in Malaysia Malaysia Airlines and AirAsia - to serve the country, and we should leverage on them for the economy of Malaysia, said Malaysia Airlines Berhad (MAB) Group chief executive officer Captain Izham Ismail.
“Support these two Malaysian champions. As long as they serve the country and bring in an economic multiplier, that's well and good. Sometimes we lose out to our friendly competitor (AirAsia) but in the overall scheme of things, it's OK to us (MAB) because the country gains,” he said.
Capt Izham was offering professional advice to the state government during a courtesy call on Deputy Chief Minister-cumMinister of Tourism, Culture and Environment Datuk Christina Liew on Thursday.
“Putting aside sentiments and competition, Malaysia has two champions. You have two strong companies in Malaysia. You've got a Malaysia Airlines premium market and you've got an AirAsia low-cost market.
“As a country and state, Sabah Tourism should capitalise and make the best of Malaysia Airlines and AirAsia to work for you. For the economy of Malaysia, make use of these assets that are within your hands. I will not be offended,” Capt Izham told the minister.
Pledging to work closely with the Ministry of Tourism, Culture and Environment team to promote Sabah, he said : “I love Sabah. I was based here before. At 19, I joined Malaysia Airlines System (MAS) as a young pilot. That was in 1979.
“When I became CEO of MASwings, I felt that I was coming back home. I want to make it work for the Sabah government and the ministry as much as I want the government and the ministry to make it work for Malaysia Airlines.
“If Sabah Tourism is going abroad to promote Sabah, I will assign someone from our team to join your promotion team. If needed, our Chief Revenue Officer may come on board to facilitate travel trade.”
Reciprocally, Liew welcomed the idea and said it was a natural consideration for the government to support Malaysia Airlines as it was a national carrier, adding: “I would also like to see Malaysia Airlines grow.”
The Group CEO also assured the minister that the airline would support the government in initiatives that support the tourism industry and that included Visit Malaysia Year 2020.
Malaysia Airlines flies to more than 1,000 destinations over all six continents (Africa, America, Antarctica, Asia, Australia/ Oceania, and Europe) through its codeshare and Oneworld Alliance Partners.
MH, a member of Oneworld airline alliance, operates 81 aircraft with six A380s, six A350s, 21 A330s and 48 B738s.
Capt Izham also informed the minister that MAB would launch MH Holidays as a new product in March next year. He said it was part of the holiday arm that would introduce travel packages to promote Malaysia as a premium tourist destination.
“We place your travel and a holiday together in one package. You fly Malaysia Airlines in any destination in Malaysia, and you have a three-four stopover. Sabah is one of them. You can choose any destination in Malaysia. What you do if it is Langkawi, you fly to KL where we package a connectivity flight to Langkawi. In Langkawi, we have rooms for you,” he added.
In their fruitful discussion, Liew emphasised the need to maintain the Shanghai-KK route, given the foreseeable influx of Chinese tourists, especially during the Chinese New Year season, as well as the need to revive the OsakaKK route.
“We are keen to enhance the Shanghai-KK route by virtue of its (Shanghai's) connectivity with other provinces in the region.”
On plans in the pipeline, she made it clear that Sabah Tourism is focusing not only on the China market but also eyeing other travel markets in Europe, Australia and America.
“While Sabah Tourism will be exploring new destinations in China, we are not putting all our eggs in one basket. We are advocating a balanced approach in heightening tourism growth, given the different categories of tourists with varying tastes. We will push our plans to aggressively promote Sabah in the European market and Australian market from next year,” she said.
Malaysia Airlines flies to Brisbane, Sydney, Melbourne, Adelaide, Perth and Oakland.
It was pointed out by Capt Izham that for every international connection, Malaysia Airlines would check whether there is a BKI (Code for Kota Kinabalu) connectivity.
“For international service, we must have a two-way connection to KK. When we design our network, for example, a passenger that originates from Manchester, connects to London and comes to KL, the window for him is he can choose. If he is going domestic, KK must be able to connect. That's how we design. There are four important hubs for us - KL, KK, Kuching and Penang. These must be connected. Any aircraft that comes from Australia and Europe, they must have that two hours' window,” he explained.
On European air traffic, the Group CEO said most of it was Australian with the Arabic Airlines having taken it, flying direct to Dubai and to Europe.
“So what we can do is entice the travellers with a stopover programme. For instance, if you fly Qatar, you go to Doha and Sydney but if you come to Malaysia through Malaysia Airlines, we have a stopover programme from Langkawi to Kota Kinabalu, Kuching and Mulu.You spend a few days here, then you continue your journey back to Sydney. That's what we call a stopover programme all on one single purchase,” he said enthusiastically while urging Sabah Tourism to do a stopover programme for the European, Australian and North Asia markets.
Briefing the minister on the Malaysia Airlines situation, Capt Izham said the airline had not been flying a lot into Sabah since the MH370 incident in 2014.
“When it happened, it brought our P&L (Profit & Loss account) to -RM5 billion. To make matters worse, three months later, MH17 happened. We were basically on our knees. Do we close the airline?
“The government felt strongly that Malaysia needs a national carrier so we continued.
“We had to re-set in 2015. We crossed over to the new company. We put all airlines under one group known as Malaysia Aviation Group (comprising Malaysia Airlines, Firefly and MASwings).
“From a fleet of 109 aircraft, we brought over a size of about 85 planes.
“We don't have the capacity to fly a lot like the likes of AirAsia. Malaysia Airlines needs to grow again. We started selling San Francisco, Los Angeles, even Dublin. We don't have assets that we wish we could fly, say KLSandakan five times a day. But KL-Tawau is booming. Even with those numbers, we don't have the assets to fly a lot. We really have to position our assets at the most profitable route for us. We are taking away flights that are not making money but it is not easy to exit a route.
“KL-KK, KL-Tokyo, KL-Incheon and KL-India are reportedly profitable routes for MAB. We are still recovering...in reality, it is really still hard. Slowly we are climbing back. If you ask me when I will see sunshine, it will be 2020,” he shared.
Despite what had happened, Capt Izham insisted that Malaysia Airlines is a perfectly safe airline, saying “Safety is Number One in Malaysia Aviation Group.”
On the question of increasing Malaysia Airlines' flight frequency to Sabah and Sarawak, the Group CEO said the airline was developing the potential.
“We are removing flights that do not make money, for example, going to Hyderabad or whatever. We are taking and pushing it here. If a route is not working for us, the matter will be escalated to the management team. From there, the next step is to engage the government to bounce ideas in seeking a solution. That's our governance.”
On why Malaysia Airlines flies to Sandakan only once a day (compared with Air Asia which flies four times a day), Capt Izham said the airline did not have the assets to fly high frequency.
“An airline needs to fly as much as possible for us to drop our costs. We aspire to do that. The Malaysia Airlines Restructuring Plan is for us to stabilise our P&L, and start acquiring back assets. This is a journey that will take at least five years from 2015,” he said.
Meanwhile, CEO of Firefly, Philip See described the Sabah Tourism Board (STB) as one of the most proactive tourism bodies among the states.
“We find it very easy working with the tourism team from Sabah,” he said.
CEO of MASwings, Aminuddin Zakaria could not agree more. “We support STB activities such as beach clean-up programme which was carried out recently. We connect with STB very closely. We hear the rakyat, the rakyat will tell us what they want,” he said, adding that the ATR is a safe plane.