MALAYSIA Airlines seems to be making great strides in its business turnaround plan - achieving a record profit of RM610 million during the January-September period last year. However, despite the soaring profits, MAS still faces turbulent times ahead.

Instead of gaining more passengers, MAS is losing its market share. AirAsia is now dominating the domestic market and, I am sure, the regional market as well. Instead of increasing flights to profitable destinations, MAS is reducing services.

MAS used to be a second-placed foreign airline behind Singapore Airlines in terms of flights to Australia or New Zealand and market share. Emirates has now overtaken it and soon, Thai Airways will leapfrog MAS.

Destinations like Zurich, Manchester, Frankfurt, London and Auckland are supposedly not making any profits for MAS.

Airlines are scrambling to get valuable “slots” to operate from London’s Heathrow Airport but MAS is claiming that it is unprofitable. SIA, Cathay Pacific and Emirates operate multiple flights daily to London.

The same goes for Frankfurt where there are nine flights a week from Kuala Lumpur (combination of MAS and Lufthansa), whereas Changi sees 21 flights a week.

In fact, MAS is stopping flights to Zurich, a major financial centre in Europe. It has operated three flights a week since the start of the route 19 years ago. They cannot claim they tried to make the route work.

Since MAS announced that its Zurich flights are to be stopped, SIA has increased flights to 10 times weekly to fill the void.

Another example is Dubai where MAS flies seven times weekly, either via Karachi or as a stopover to Istanbul and Beirut. Emirates now plans to fly to Kuala Lumpur nine times weekly without the onward connections to Singapore or Jakarta. They seem to make it work.

The way to make money is by increasing the number of business passengers. To do this, you need to serve a destination at least with seven flights a week to offer them increased flexibility in travel arrangements to suit their needs.

MAS’ idea of serving destinations with three or four weekly services will only make it attractive to package or leisure passengers.

MAS will probably say that they cannot increase flights as they do not have enough aircraft. Why?

Their other strategy of making profits by selling assets (which include aircraft - four Boeing 747 aircraft so far) will not work in the long term when they have nothing more to sell.

I also think their idea of five-star service at low cost is alienating its loyal passengers, including myself. The quality of their in-flight meals leaves a lot to be desired.

They cite high oil prices as the reason for increasing fares but there is only so much we can put up with.

Their “year of growth” for this year has been marked by some dubious decisions. They plan to fly to Yogyakarta and Lahore.

Despite all this, I wish them success in their turnaround plan.

I hope that they will open their eyes and ears to see what other airlines are doing and more importantly, listen to their own loyal passengers.

DR MUHAMMAD IZANEE MOHAMED MYDIN, Kingston-upon-Hull, Britain

Source: NST – January 14, 2008