MAS looks to China market, new routes

Malaysia Airlines (MAS) is betting on its first new routes in almost a decade and growth in China, where it wants to triple business over five years, to help it return to profitability in 2018 and list the year after, its chief executive said yesterday.

Mr Peter Bellew, who took the reins at the Malaysian flag carrier in July, said the group was already losing less money than it had forecast and was on track to break even in the last quarter of 2017, with bookings for the coming months ahead of last year, despite a reduced fleet.

"We are in expansion mode," he told a gathering at the CAPA Asia Summit 2016. "March 2019. Notwithstanding shocks, that's our Olympic Games, that's what we're focused on at the moment," he said, referring to the group's plans to be ready for a listing by 2019.

Key to its plans is China, where MAS is launching flights to eight new destinations and adding 11 routes between the two countries starting next year, betting on geographic proximity and linguistic ties.

"They say they don't need low- cost carriers. They are looking for full-service carriers, with alliances," he said.

Mr Bellew, a former Ryanair executive, said he also saw a shakeout among low-cost airlines in the region, which is one of the most crowded and includes some of the toughest competitors globally.

Aircraft orders in Indonesia and Malaysia are more than double Chinese orders. "There are going to be some big losers. There is going to be blood on the floor," he said.

MAS has been battling to turn around its business since a disastrous 2014, which saw aviation's greatest mystery, the disappearance of Flight MH370, and the shooting down of Flight MH17 over eastern Ukraine.

The carrier was later taken private by state-fund Khazanah Nasional as part of a restructuring, which included a shrinking of its network. Since then, MAS has cancelled all non-stop flights to Europe except to London, and ended several low-yield Asia-Pacific services.

Mr Bellew said the group, through a new unit, would rent out its Airbus A380 superjumbos to religious travel groups for Haj and Umrah pilgrimages - a move that could dispel recent gloom over demand for the huge jets.

REUTERS

A version of this article appeared in the print edition of The Straits Times on November 16, 2016, with the headline 'MAS looks to China market, new routes'. Print Edition | Subscribe