FLAG carrier, Malaysia Airlines (MAS) is not likely to launch any new route to European countries anytime soon but will continue to re-energise its products in Europe next year, according to regional senior vice-president UK/Europe Huib Gorter.
We've got some exciting plans for next year. There will be a lot of buzz coming from MAS. Additionally, we will be flying the A380 for KL-Paris-KL route in March 2013 on top of the current KL-London route, he tells StarBizWeek in Amsterdam.
With the new A380 plying KL-Paris-KL daily route, Gorter expects the new product will attract customers to fly with MAS just like they did in London.
MAS has increased its daily A380 flights on the KL-London route to twice daily. It will begin daily A380 operations on the KL-Paris return route from March 1, 2013.
Despite the larger capacity on the jumbo jet, Gorter expects KL-Paris route load factor to average about 80%. He adds that the KL-London-KL flights on A380 had been averaging about 80% load factor.
In 2003, MAS ordered six A380 but delivery had been delayed for a while. It finally received the first A380 in June. So far, it has received four aircraft and will be receiving the balance next year.
The A380 has a capacity of 494 seats in a three-class configuration comprising eight first-class seats and 350 economy-class on the main deck, together with 66 business-class seats and 70 economy-class seats on the upper deck.
One of the key things is to price your products creatively and at the right time. We have very good airlines competing with us and we can never ever lose sight on the ball, we have to be on top of that and I think we have done it quite well, Gorter says, adding that its business plan for Europe was to develop traffic to home base.
Additionally, he says, MAS works with various groups including Tourism Malaysia, Sabah and Sarawak Tourism, hoteliers and tour operators.
Gorter points out that there is no lack of capacity flying from Europe to Malaysia and one of its challenges is to move ahead of the curve.
The are sufficient direct flights from Europe to Malaysia (including code sharing) with 17 from Amsterdam, Frankfurt (nine), London (14), Paris (daily) and Istanbul (3), of which 14 of the direct flights are operated by MAS. UK is MAS' biggest market in Europe followed by Paris and Amsterdam.
We have to be very quick and competitive. We need to have strategies and we have estimated about 122 European tour operators will feature Malaysia in their brochures and online sites, Gorter says.
On competition from airlines, he says consumer trends is hard to predict these days because consumer trend changes fast.
One minute they could be looking at travelling to Malaysia and the next it could be other destinations. It is a challenge for everyone. We have to act very quick and price our products well. Its mind-boggling, Gorter says.
As brand loyalty poses another challenge, Gorter says MAS entry into oneworld alliance is timely. MAS will become a full member of oneworld alliance effective Feb 1, 2013.
He points out that the industry is experiencing a declining brand loyalty so there is a need for a constant reinforcement for the brand.
Enrich (MAS' frequent flyer programme) is great but Enrich itself is not the key driver (for brand loyalty). With oneworld alliance, travellers flying British Airways or member airlines will be able to accrue flying miles, Gorter says, adding that the new oneworld alliance will allow MAS to enter the corporate market in Europe, which has great potential.
Although there is only one MAS' Golden Lounge in London in Europe region, Gorter says there is no plan to set up lounges in other European destinations MAS flies to such as Amsterdam and Paris.
We have third party contract to allow passengers on business and first class to gain access to these lounges. We're not setting up Golden Lounges ... not at this point, Gorter says.
He proudly says MAS' business class product is second to none. We're a very good airline, he adds.
Last year MAS announced a major route rationalisation to stem losses. The rationalisation takes effect early this year and involves the withdrawal of loss-making flights from Kuala Lumpur to cities that include Surabaya, Karachi, Johannesburg, Cape Town, Rome and Buenos Aires.
Gorter describes the KL-Rome route cut as a very painful exercise as a need to achieve its revenue target and stem losses from low-yield route. We made the decision to drop non-strategic routes and Rome was one of it. Life is tough, he reckons.
Gorter says MAS is a lot better now. We have started to get profitable on some routes.
Despite the uncertainty in the eurozone economic outlook, Gorter sees next year as an excellent one for MAS in Europe as the A380 aircraft will definitely enhance MAS' brandname.
The uncertainty makes it even more challenging in an industry which is so competitive. There are still a lot of travel between Europe and Asia despite the potential slowdown in economy, he says.
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