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Aviation History
1995
1995 - 3541.PDF
tt£WSM*\XMrt& signed with Virgin Atlantic .Airways and British Midland. The carrier has also signed a codesharing agreement with An- sett and secured extra flights to Australia and New Zealand. "We're bursting at the seams and, even with the increase that has been approved, it will not last very long, and we'll soon fill up all those seats," says Tajudin. Other, more adventurous start up routes to Buenos Aires and Johannesburg — launched in line with the Malaysian Government's "soutii-south" policy — have been less encouraging. Flights to South Africa have only just begun to turn a profit after two years of opera tion, while the onward sector to Argentina still requires "some more work", concedes Tajudin. With partners in Europe and Australasia, MAS is looking to complete its global network with a codesharing tie-up in North Am erica. "We're in discussion with one or two US carriers, but haven't finalised anydiing yet," he says. He adds diat, in the longer term, the airline is looking to build fur ther on its international partner ships and to forge strategic al liances, including possible cross- shareholdings. "We don't discount any one at all," he says. Of more immediate concern to MAS is its loss-making domestic services. Government-imposed fares force the airline to operate many so-called "social-service" routes at below cost. It is estimated that, per kilometre, Malay- sia's domestic air fares are the second- lowest in Asia (after the Philip pines) and less than one-third of those of Japan. The problem in die past was compounded by die rapid expansion of MAS' domestic fleet of 737- 400/500s and Fokker 50s, which doubled in size to 64 aircraft during 1989-94. Domestic traffic grew by only 13 % a year over the same peri od, load factors slipped and revenue stagnated at its 1989-90 level. "We can't ask die Government for an across-the-board 30-40% fare increase," says Tajudin. "In stead, we need to continue to address this on a sector-by-sector basis. We may not be successful all the way, but, at least in some sec tors, we believe there is an oppor tunity to be more equitable." Remedial measures to date have centred on increased aircraft use, leasing surplus 737s to RAC, Myan- mar Airways International and Jet Airways of India, along widi tighter cost controls. According to Tajudin, around a third of MAS' existing domestic routes widiin peninsular Malaysia, Sabah and Sarawak re main unprofitable, widi anodier third at, or just above, break even. LONG-TERM SOLUTIONS Suggested longer-term solutions have included the development of more-efficient third-tier carriers and a rationalisation of Malaysia's air ports. MHS already holds an 18% stake in Pelangi Air, and MAS has begun helping to develop new routes for die carrier, such as Penang- Kuantan and Ipoh-Johore Bahru, and equip it with more cost-effective Bombardier de Havilland Dash 8-300 turboprops. In June, Taj udin called for die closure of some of die smaller air ports, claiming that they had been made redun dant by improved ground infrastructure, for example, die country's arterial NortJi-SoutJi Highway. While die transport min istry was initially unresponsive to his suggestion, it has since commis sioned an airport study. "I'm not sure whedier they reacted to my comments, or whedier they have their own plans," says Tajudin modesdy, "but, based on our flight patterns, we know that some of die airports need not be diere." A key element in Tajudin's success has been his close relationship with Malaysian prime minister Mahathir "In some sectors, we believe there is an opportunity to be more equitable." Mohamad, who is a strong propo nent of an indigenous aerospace industry as part of his "Vision 2020" national economic blueprint. Tajudin was accordingly ap pointed chairman of the Malaysian Industry-Government Group for High Technology (MIGHT), an offshoot from the Commonwealdi Partnership for Technology Management. "One of the challenges of the country is to become a creator of technology. I think people in MAS are ready to move away from just being a consumer of technology and help become die creator of technology," suggests Tajudin. The ACGHT's aerospace sub- grouping has brought members of industry together with the Government and military to try and formulate a national policy. Discussions have also been initiated with companies from other Com monwealth coun tries, in particular Canada. "We've found diat, while we have skill in some areas, we don't in odi- ers," says Tajudin. "The programme which die Canadian private sector and Government can put together appears to be good for us and we've said we would like to work with companies involved in aerospace training and management." It is hoped diat the iVIIGHT will bring some clarity and direction to die development of Malaysia's aerospace sector. Previous efforts by the Government to kick-start the industry have met with mixed results. Of three programmes initi ated before the last Langkawi Inter- MAS expansion has included taking a 20% stake in World Airways national Maritime & Aerospace (LIMA) Exhibition in 1993, only one has reached fruition. Plans to build the Dornier Sea- star CD-2 amphibian in Penang have been scuppered, widi die fail ure of die AIM-led joint venture to inject the necessary capital (Flight International, 16-22 August), while die Australian-designed Eagle X- TS composite light aircraft has run into certification difficulties. SME Aviation, in the meantime, has begun production of die two-seat Aero Tiga, formerly the Datwyler MD3-160 Swiss Trainer Tajudin reveals that, immediate ly after the last LIMA show, it was decided to concentrate instead on "more established" avionics and composites technology pro grammes. He adds that Malaysia has amassed several hundred mil lion dollars' worth of military-con tract offsets, which would be used to put these projects in place. "These programmes are more thought out and better structured, radier than rushed decisions," says Tajudin. While he refuses to dis close any further details, -die planned programmes are under stood to include local industry par ticipation in the Malaysian air force's planned Lockheed C-130 avionics upgrade (Flight Inter national, 4-10 October). Eighteen months after taking control of MAS, Tajudin concedes reform and improvement has taken longer than he expected, but concludes: "I am now at least more comfortable with what I look at and the programme we want to do." • FLIGHT INTERNATIONAL 6 - 12 December 1995 35
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