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Malaysia Airlines trimming international network

21-Mar-2006

KUALA LUMPUR (XFNews) - Troubled Malaysian Airline System Bhd (MAS) today announced numerous route changes including the axing of flights to cities in India, China and Europe.

In the boldest cuts yet, flights to be dropped over the next three months are from Kuala Lumpur to Ahmedabad and Kolkata in India; Xian, China; Padang, Indonesia; Manchester in the UK; and Vienna, Austria.

The airline expects to reduce losses by up to 303 mln rgt as part of the move even though it will lose revenue by cutting back on routes.

"Cost savings are expected to substantially offset revenue losses incurred," it said.

The airline said move will have minimal impact on bringing tourists to Malaysia, and vowed to "work aggressively" with partner airlines to fill the gaps.

It will also halt flights between Kuching, the capital of Malaysia's eastern Sarawak state, and Pontianak in Indonesia's province of West Kalimantan, the airline said in a statement.

MAS earlier this month announced the beginning of its "route rationalisation plan," which involved cutting out certain domestic destinations and long-haul international routes.

The changes are part of a three-year plan introduced by managing director Idris Jala on February 27 to revive the carrier's fortunes after it posted a 1.3 bln rgt loss for the 2005 financial year.

The airline today said it had analysed the profitability of all its international routes over the past three months as part of the turnaround plan.

The changes will cut back on the frequency of flights on a number of routes, including return flights from Kuala Lumpur to Nagoya, Frankfurt and Auckland.

The airline also announced an aircraft swap from April 1, assigning the larger-capacity A330-300 planes to its Kuala Lumpur to Kunming route. The Kuala Lumpur to Chengdu, China, routes will have the smaller A330-200 planes.

MAS has blamed its losses on crippling fuel prices and lower load factors but projects it will be profitable again in 2007.

The turnaround plan, to cost some 4 bln ringgit, includes the restructuring of the carrier's loss-making domestic service to collaborate with, but also better compete against, low-cost carrier AirAsia.

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