MAS’ plan for regional airline fails to take off

Short-haul operations will proceed as a division within Malaysia Airlines, where its primary objectives and goals remain intact, says MAS


Kuala Lumpur: Malaysia Airlines (MAS) has scrapped its plan to start a regional premium airline but is going ahead with the short-haul operations.

The national carrier said yesterday the decision to drop the premium airline plan was part of a business model review.

“Short-haul operations will proceed as a division within Malaysia Airlines, where its primary objectives and goals remain intact,” MAS said in an email response to Business Times’ queries.

However, MAS group deputy chief executive officer Mohammed Rashdan Mohd Yusof will no longer head the short-haul operations.

In December last year, the ailing aviation group announced it would set up a regional premium airline as part of its gameplan to reposition and turn itself around.

MAS workers’ unions, however,viewed the initiative as a move to disband the carrier’s many unions.

The airline also denied the latest moves had anything to do with
Qantas’ decision to end talks of a partnership, which was
announced early last month.

Ignatius Ong, when met at the 5th anniversary celebration of Firefly yesterday, said he would remain as chief operating officer of MAS’ short-haul operations and the budget airline.

MAS said the business plan it unveiled last December was very much intact and no other changes had been made.

“The key primary objectives for short haul is to spearhead a robust network with high aircraft utilisation, improve efficiencies, drive cost downwards and increase productivity in
addition to focus on enhancing customer experience,”MAS said in its reply.

Analysts were indifferent to the news. “I am neutral on this and I don’t think anyone had assumed the regional premium airline’s
operations in their estimations,” said an analyst who declined to be named.

Another analyst from Maybank Investment Bank declined to comment, saying there was no clarity on the issue.

“It would be great if MAS’ management could spare an hour or two to explain the current state of things to the analyst community,” he said.

“The business turnaround document announced in December is too basic to be used as a premise to comment.”