September 15, 2004
Kuala Lumpur: Malaysia Airlines (MAS), will continue to concentrate in expanding services to the lucrative China and India markets which other carriers are pursuing aggressively, its managing director Ahmad Fuaad Dahalan, said Monday.
He said the national carrier would need more aircraft to service new destinations and increase flight frequencies.
He also said MAS, which was planning to fly to Kunming, China, in January 2005 welcomes competition from within in view low cost carrier Air Asia, was set to fly to the Chinese city in December this year.
MAS has just launched its Chengdu route in China and plans were also afoot to fly to Guilin and Shenyang in the future, he told reporters after the company’s annual general meeting (AGM) here.
In China, he said there were 15 more destinations that MAS could go in.
Similarly, in India, he said MAS wants to expand its services to Punjab’s Holy City, Amritsar, as well as Cochin, Trivendrum, Trichy and Ahmedabad.
MAS also plans to increase flight frequencies to Beijing from seven to nine times as well as in India in routes such as Kolkata and Chennai.
"There is a government to government agreement. We have identified Chennai as one of the markets to upgrade. There are some commercial arrangements that need to be worked out. "But we are not stopping there. More will come depending on India’s open sky policy," he said.
Currently, he said there were some commercial talks with Air India.
In order to service these new routes, he said MAS needs extra aircraft.
"We are actually at this point of time, looking at our fleet requirements. Obviously, if you look at China and India, we need an aircraft which has a four to five hour range," he said.
Currently, MAS has 39 737-type aircrafts. They have reached a point where they need to be reviewed and refreshed.
Asked whether MAS would be leasing more aircraft to tap this lucrative market, he said for the first phase, MAS was talking about replacements.
"To some points in India, we need to have either Boeing or Airbus for longer range (more than five hours) as 737-400s cannot meet the range there. So, this is essentially our proposal, that will have to be cleared by our board."
Asked how many more aircraft MAS would require, he said, "We don’t know at this point of time. If within the five years we are focusing on China and India, we need to look at some appropriate aircraft."
On its flight to Los Angeles (LA) via Taipeh, he said MAS wants to increase the frequency to LA daily during the 2005/2006 financial year.
MAS now flies this route five times a week.
Asked whether the abolishment of the Market Development Programme (MDP) would reduce air fares or vice versa, he said, it would be based on supply and demand with more seats being offered during the off peak period.
He said when the MDP was around, the choices were limited to the carriers but now it would be open for carrier to determine their own prices.
"For instance, we will be having an opportunity to monitor and track the market and offer opportunities to consumers faster rather than waiting for a consensus from MDP.
"This will benefit consumers," he said.
As far as MAS is concerned, opening up their inventory (seats) would be through all its distribution channels, namely MAS Travel Fair, Travel Agents and also via the Internet.
MDP, which is a pricing mechanism used by airlines and travel agents to stabilise airfares, would be abolished effective November 2004.
With the abolition, travellers would be able to shop for lower fares as airlines and travel agents would be free to determine airfares depending on demand and supply.
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