Malaysia Airlines to restructure domestic operations

RESTRUCTURING: Malaysia Airlines will restructure its domestic operations through 19 trunk routes.

Each of these routes currently generate an annual average load of 15,000 international connection passengers, and/or 13,000 front end (business/first class) passengers.

Applying these two dimensions, Malaysia Airlines will now operate seven routes between KL International Airport (KLIA) and Peninsular Malaysia cities, six routes between KLIA and Sabah/Sarawak, and six routes within Sabah and Sarawak.

"Our original intention was to take back the P&L for the domestic sector from PMB in 2007 and build this out as a viable business unit. Having said that, we understand the Government's vision to establish two national champions in the international aviation sector - one in full service and the other in low cost.

Taking this as a starting point, we analysed all our domestic routes and identified these 19 routes as key to ensuring our future success.

We are confident that we will be able to work closely with Air Asia to ensure that connectivity and interlining issues are addressed in a timely manner and that international passenger traffic in and out of Kuala Lumpur will not be affected," said Idris Jala, Managing Director, Malaysia Airlines.

"This collaboration is the beginning of a new era for the airline industry in Malaysia. Malaysia Airlines and Air Asia will use the current framework to build a strong platform for launching a airline powerhouse in Asia Pacific.

"The Government has agreed to give us a free hand in managing the network, and this will mean that we will have full control on determining capacity, frequency and pricing. Managing yields will be a key factor to ensure profitability and it's important for us to be able to manage this."

This exercise will see aircraft being reduced from 40 to 21, and stations right-sized from 32 to 16. This will also result in Malaysia Airlines' current manpower being reduced by around 6500 from its existing staff strength of approximately 23,000.