MAB to retain current domestic and International routes of MAS, says Mueller

Malaysia Airlines Bhd (MAB) will retain the current domestic and international routes of Malaysian Airline System Bhd (MAS), but focus on a competitive cost structure in pursuit of becoming the regional leader by 2018.

The company will also retain the existing aircraft fleet.

MAB is the entity established to take over the assets and operation of MAS as part of the national carrier's 12-point recovery plan announced by major shareholder Khazanah Nasional Bhd.

Chief executive officer-designate Christoph Mueller said more than 40 projects had been identified to position the company for future growth, including overhauling the information technology (IT) system and refurbishing inflight offerings.

"These projects will impact all aspects of the airline and create an ongoing, sustainable operation," he told a media briefing here today.

He said the company had identified those factors which had been a drag on the revenue of MAS, among which were overcapacity in the market and declining revenue per passenger.

He added that MAB would also review its entire product range to make offerings more appealing.

Mueller said MAS also lacks a state-of-the-art IT system which could lower operational costs by 20 per cent, while driving ancillary revenue from retail and merchandising.

The airline, he added, also had a high number of suppliers at 20,000 and MAB would trim this to between 2,000 and 2,500.

He said other planned improvements for the MAB includes, the introduction of a premium class with full flat beds, refurbishment of cabin interior and upgrading of inflight entertainment.

According to Mueller, MAB also plans to increase the domestic flight frequencies of subsidiaries, Firefly and MASwings.

He said the re-branding plan for the airline is expected to be concluded in the next eight weeks.

As part of the re-branding the MAB headquarters would be located at the Kuala Lumpur International Airport (KLIA), while the Subang office operations would be shut down entirely with Firefly moving to a location close to the Subang airport.

He said the airline would also consider in the future, trimming its holdings in subsidiaries such as the maintenance, repair and operations (MRO) business, by partnering with other industry players.

By 2018, he said MAB would emerge as a leader in Southeast Asia with a competitive cost base, best network, competence in revenue management and operations driven by industry leading technology.

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Meanwhile, en route for operations on Sept 1, Mueller said administrative work on the transfer of assets, contracts and liabilities from MAS to MAB commenced from last week and is scheduled for completion in three months.

"Within the next few months, we will transfer all the credentials which are necessary to operate the new airline," he added.

He said MAB is also applying for an airline operating certificate (AOC) from Department of Civil Aviation and authorisation to use International Air Transport Association's MH code.

When operations commence, he said the airline would employ at least 14,000 staff from MAS.