LONDON (BLOOMBERG) - Malaysia Airlines Bhd's Airbus SE A380s are flying full on trial services taking Muslim pilgrims to Saudi Arabia, prompting the carrier to say it will establish the operation as a new division as early as the end of this year.
The South-east Asian company has been using two of its six A380s to transport people headed to Mecca for the year-round umrah pilgrimage since November, chief executive officer Izham Ismail said in an interview. The planes will ultimately be used for the annual haj gathering, one of the world's biggest travel events.
"I felt we needed to go to market fast," said Mr Izham, who inherited the proposal when he took over as CEO two months ago. "We've been flying these charters daily to Jeddah or Medina and we fill them up every day."
Airbus, which broke a two-year sales drought with the A380 last week, is keen to see the Malaysia plan succeed as it pitches the model for new markets, and has agreed to convert the jets to as many as 700 seats from 498. Mr Ismail said that would have to wait until 2020, when the A380s will be out of service for maintenance, and that the current density may in any case be sufficient.
"The passengers who go to the umrah and haj are often elderly, so we can't cram them into a tin can," he said in London. "We can keep the current configuration and offer a product that's superior to the current haj product. It's a captive market, so we can move the pricing up a little bit."
While flying to Saudi Arabia from Kuala Lumpur, the A380s have already carried groups originating in Indonesia, China and Bangladesh, as well as Malaysia, booked via a network of travel agents.
Fares will still be lower than for a normal commercial ticket, though there's an appetite for business-class perks among some pilgrims that the current layout could address, Mr Ismail said. The project, a brainchild of Mr Ismail's predecessor Peter Bellew, has been named Amal, meaning "hope" in Arabic.
About one million people from the Asia-Pacific region make the trip to Mecca each year, with Malaysia Airlines typically carrying around 40,000. The carrier has already secured 175 flights for this year's haj, which takes place in Aug, compared with 120 in 2017, supported by prepaid bookings, the CEO said.
The trial flights are operating under Malaysia Airlines' own licence but should be established as a standalone charter brand in the fourth quarter or early in 2019, he said. The operation will probably use four of the carrier's A380s, supplemented by smaller Airbus A330 twin-aisle models, though Mr Bellew had estimated the market might ultimately support 20 superjumbos, including jets offloaded by other carriers.
Malaysian Airlines views the A380s as too big for its scheduled flights and is replacing them with new Airbus A350 wide-bodies on routes to London and Tokyo. British Airways looked at taking over the superjumbos to expand its own fleet of the planes, but is now pursuing an order for new examples, people with knowledge of the plan said Friday (Jan 19).