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ROUTES: Malaysia Airlines paves road to recovery

Malaysia Airlines’ new chief executive Peter Bellew has his eye on getting the airline to breakeven by the fourth quarter of next year, and to be profitable for the full year in 2018.

The “Olympic goal” is for the airline to relist on the Malaysia stock exchange by March 2019, he said at a keynote CEO interview at the Strategy Summit held during World Routes.

“It’s an achievable date we believe, but it’s a highly ambitious date and a stretched target,” says the former Ryanair executive, adding that his current focus is on maximising revenue, minimising costs and filling aircraft at a good average fare.

He points out that Malaysia Airlines will launch up to seven new routes over the year, without having to expand its fleet. This is since the carrier is working to raise the utilisation of its narrowbody fleet to about 12 hours, from under 10 hours currently. This essentially gives it the capacity of six additional narrowbodies.

“We got to get those out of the system, redeploy them to China, Japan and Korea. That’s where our growth markets are.”

The Malaysian flag carrier has also been aggressive on fares, especially on the front end of the cabin, bringing an increase in take-up. It is also using revenue management to better price fares in the economy section, which competes with low-cost peers AirAsia and Malindo Air.

Bellew says the airline is also short on widebody aircraft, and that he is confident of deploying three to four additional Airbus A330-300s overnight to China and Japan, and “be profitable immediately”.

On its six A380s, which it plans to phase out in 2018, Bellew believes the airline will have to be "a bit more imaginative" on how it markets the aircraft. With the widebody sale market being soft, Malaysia Airlines is open to wet-leasing the jet to operators which have routes that could absorb the jumbos, but are nervous about buying the jets.

These include Chinese airlines which could use the jet on high-density routes such as Beijing-Shanghai, to free up precious slots for other more profitable services.

“We don’t want to see the A380s parked in Kuala Lumpur, or the desert,” he adds.

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