KUALA LUMPUR: MALAYSIA Airlines Bhd (MAB) will not set up a new unit to operate leisure flights out of Kuala Lumpur International Airport 2 (klia2) next year.
Instead, the national carrier will operate new flights under MAB, said newly-appointed managing director and chief executive officer Peter Bellew.
“No new airline etc. Leisure routes would be new destinations which are point-to-point and not connecting customers,” he told Business Times when contacted yesterday.
In a statement last week, MAB said airport costs will be its immediate focus in the future as it plans to operate leisure flights from klia2 where costs are RM33 per passenger lower or RM5,412 per flight lower, which would translate to a savings of RM1.97 million on one daily flight in a year.
In an email response yesterday, MAB said it would operate the flights under the same flight code to offer cheaper airfares to new holiday destinations. The cheap fares are due to the lower passenger service charge (PSC) at klia2 compared with KLIA.
The current PSC at klia2 for international and domestic destinations are RM32 and RM6, respectively, per passenger, while at KLIA the charges are RM65 for international and RM9 for domestic.
Meanwhile, Maybank Investment Bank (Maybank IB) aviation analyst Mohshin Aziz said MAB would have to go on a recruitment drive as it needs to deploy separate staff at klia2.
MAB released 6,000 employees last year as part of its turnaround plan to be profitable by 2018.
Mohshin also reckoned that MAB’s new flights would be to destinations which traditionally do not have many business class passengers.
“Maybe it would possibly be to Phuket or Bali, but not to critical capital cities like Hong Kong, Jakarta, Bangkok or Manila from klia2. I think it will be to destinations where there are not many business passengers on the flight,” he said, adding that the plan shows that MAB is thinking like a real cost conscious airline.
However, the move to klia2 could spark a price war between MAB and AirAsia Bhd, giving the latter a run for its money.
AirAsia is currently the largest tenant in klia2, with 98 per cent of flights operating out of the terminal.
Although there could be only small competition between the two airlines, AirAsia would need to lower its fares as most travellers are cost conscious and would opt for cheaper flights, said Mohshin.
“Customers are very open in terms of where they want to go and they are cost-conscious. If MAB lowers its fares by RM33 per passenger, they would steal customers away from AirAsia,” he said.