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Malaysia Airlines to join oneworld alliance

6-Jun-2011

Malaysia Airlines (MAS) announced plans at the IATA AGM in Singapore today to join the oneworld alliance. The move marks the achievement of a key goal of the airline's multi-year restructuring plan.

oneworld's share of global airline capacity has declined in recent years, falling a further percentage point to 10.2% this month (in terms of seats per week). Star leads the alliances with a 23.4% share of global seats, followed by SkyTeam with 14%. Unaligned carriers account for 28.4% and LCCs 24% of global seating capacity.

MAS, which has its hub at Kuala Lumpur International Airport, accounts for roughly 0.6% of global seats, which would be a handy addition for oneworld in the high growth Asian market. Future MAS partners in the oneworld alliance in the region include Cathay Pacific, Qantas (who will sponsor MAS' entry) and Japan Airlines. Kingfisher is joining oneworld in Feb-2012 and Air Berlin is expected to join in Apr-2012.

Global alliances key capacity data: Jun-2010 vs Jun-2011*

Alliance   Jun-10 Jun-11 % Change Jun-10 Jun-11 Variance
Oneworld Flights per Week 58,872 56,774 -3.6% 10.0% 9.3% -0.71%
  Seats per Week 8,200,174 7,875,061 -4.0% 11.2% 10.2% -1.00%
  ASKs per Week 17,840,295,090 17,958,637,533 0.7% 14.4% 13.6% -0.82%
SkyTeam Alliance Flights per Week 85,114 85,031 -0.1% 14.5% 14.0% -0.54%
  Seats per Week 10,583,440 10,773,939 1.8% 14.5% 14.0% -0.50%
  ASKs per Week 20,029,362,351 20,922,468,509 4.5% 16.1% 15.8% -0.35%
Star Alliance Flights per Week 148,863 148,632 -0.2% 25.4% 24.4% -0.96%
  Seats per Week 17,757,897 17,993,642 1.3% 24.3% 23.4% -0.94%
  ASKs per Week 32,463,001,856 33,832,210,717 4.2% 26.2% 25.5% -0.63%
Low Cost Carriers Flights per Week 113,973 124,774 9.5% 19.4% 20.5% 1.07%
  Seats per Week 16,843,825 18,490,503 9.8% 23.1% 24.0% 0.95%
  ASKs per Week 20,445,050,588 22,862,472,209 11.8% 16.5% 17.3% 0.78%
Un-Aligned Carriers Flights per Week 179,533 193,170 7.6% 30.6% 31.8% 1.13%
  Seats per Week 19,664,355 21,872,273 11.2% 26.9% 28.4% 1.48%
  ASKs per Week 33,285,189,237 36,894,429,937 10.8% 26.8% 27.9% 1.02%
Grand Total              
Flights per Week 586,355 608,381 3.8%      
Seats per Week 73,049,691 77,005,418 5.4%      
ASKs per Week 124,062,899,122 132,470,218,905 6.8%      

Malaysia Airlines' shares fell a further 2% on Friday and the stock is trading near decade lows. Its entry into oneworld should help the carrier defend and grow its share of the premium travel market by tapping into the network and loyalty programmes of its partner airlines. It should also help MAS differentiate itself in the local Malaysian market where low cost competition from AirAsia, AirAsia X and others has become intense.

Selected Asia Pacific daily share price movements (% change): 3-Jun-2011


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