Malaysia Airlines' Firefly Part 2: overcapacity at Kuala Lumpur Subang leads to restructuring

Overcapacity at Kuala Lumpur Subang Airport has forced the Malaysia Airlines Group to restructure its regional subsidiary Firefly. The airline has cut its fleet and implemented a new reduced schedule in hopes of improving yields and load factors.

Closer integration with Malaysia Airlines is being pursued, resulting in codeshares, frequent flier tie-ups and potentially a rebranding. Firefly remains an important component of the Malaysia Airlines Group, which also has restructured over the last two years, but a smaller operation is required to restore profitability in an extremely challenging marketplace.

The Subang market is relatively limited in size with only six sizeable domestic routes from Subang, all of which are now suffering from overcapacity due to aggressive and rapid expansion from Lion Group's Malaysian affiliate Malindo Air. The irrational dogfight that has emerged between Malindo and Firefly at Subang is a potential precursor of a bigger looming battle at much larger Kuala Lumpur International Airport (KLIA) between Malindo and the Malaysia Airlines Group.