New Malaysia Airlines chief executive Azmil Zahruddin is looking to grow the carrier's regional network in the near term as part of a plan to increase yields and profitabilty.

Having served as chief financial officer alongside Idris Jala during the carrier's turnaround, Azmil in August succeeded him at the helm of Malaysia Airlines after Jala took up a role in the Malaysian cabinet.

"We are constantly monitoring our network and focusing on the regions that we feel will have high demand, and allow us to increase yields," says Azmil. The carrier will increase services and frequencies to destinations in the Middle East, southeast Asia, north Asia including China, south Asia and Australia.

This ties in with the carrier's plans to induct new Boeing 737-800s from late 2010. It has 35 aircraft on order and another 20 on option. These will be deployed on regional routes that are about 4hr flight-time away from its Kuala Lumpur base.

Europe remains a key market, where it is adopting a "hold and fix" strategy. Destinations like London and Amsterdam continue to be lucrative and the carrier is looking at ways to increase loads. But it has dropped unprofitable services like Stockholm.

It will continue to monitor demand for services to destinations in South America and Africa, where it historically operated many services at the behest of the Malaysian Government due to political reasons. It plans to restructure its flights to North America after cancelling services to New York, and will continue to monitor its Los Angeles service.

"We have cancelled many of the services that were not profitable and did not make sense, and we will continue to do that if necessary. We will see what we need to with South America and Africa," says Azmil. "At the end of the day, we have to make hard-nosed business decisions about these issues."

These plans come as the carrier faces up to the challenge posed by Malaysian low-cost carrier AirAsia, which is not only providing stiff competition in the regional market but also in the long-haul segment through associate AirAsia X.

Countering speculation it might defer some 737-800s deliveries, Azmil says the end of next year is "perfect timing as the economy is expected to recover then". Its first A380s also join the fleet at the start of 2011. These will be used for high-density routes such as London, Sydney and Amsterdam. "The strategy behind the fleet renewal is to provide customers with better products and match demand with capacity," says Azmil.

Source: Airline Business