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Malaysia Airlines restructuring Part 1: 40% capacity cut to Australia is harsh - but sensible

Analysis

Malaysia Airline (MAS) is cutting capacity to Australia by over 40% in Aug-2015 as it drops Brisbane and reduces capacity to Adelaide, Melbourne, Perth and Sydney. But Australia remains an important market for MAS and the flag carrier will remain one of Australia's 10 largest foreign airlines.

The reductions are sensible as for the most part they simply reverse earlier expansion that was overambitious and unsustainable. MAS does risk leaving an opening for competitors, particularly Malaysian rival AirAsia X, but in the current challenging phase of its history it cannot be worried about market share.

This is Part 1 in a series of reports on MAS capacity cuts and the potential impact on the Malaysian and broader Asian markets.

This report focuses on Australia, where the upcoming MAS cuts follow significant capacity reductions made in early 2015 by AirAsia X.

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