Dubai : Malaysia's national carrier Malaysia Airlines has defined its growth areas in the coming years, which include Asia-Pacific and the Middle East. The carrier's new CEO, Tengku Dato' Azmil Aziz, told Gulf News in an interview at the company's Middle East headquarters in Dubai that these regions are "the most exciting" in the aviation business at the moment.
The airline in January received shareholders' approval for a proposed rights issue to raise an expected 2.67 billion Malaysian ringgit (Dh2.85 billion) to buy new aircraft and expand its network.
Gulf News: How is Malaysia Airlines going to use the fresh capital raised?
TENGKU DATO' AZMIL AZIZ: We are definitely looking at growth next year. We will expand our fleet and renew parts of it. There are, besides others, orders out for 15 new A330-300s with an option to buy 25 in total. The list price for this deal is $5 billion, but we were fortunately able to negotiate a discount given the current situation of the industry.
The new planes will be delivered between 2011 and 2016 and will allow Malaysia Airlines to serve any part in the Middle East, India, China, North Asia and Australia.
What about your long-haul routes to Europe and the US?
Presently, growth of the aviation business in Eur-ope is negative. The exciting areas are Asia and the Middle East now. We have suspended our flights to New York and serve only Los Angeles at the moment. Europe is on a ‘hold and fix' status within our network planning.
There is a range of top airlines serving the entire Asian continent — Singapore Airlines, Cathay Pacific, Thai and JAL for example. Chinese carriers are also gaining market share. What is your company's position in this very competitive environment?
We are well positioned among the Asian airlines. The Malaysian government follows an ‘open sky' policy, and we are ready to face competition as long as it is done in a fair and orderly manner.
But, beyond that, the pressure on ticket prices must be extreme given the popularity of discount carriers such as Air Asia.
Of course, we have had to reduce our yields due to this and had to cut ticket prices, but we were not the first to do that. Our difference is that we are well known for our service, and we are constantly developing new offers, for example our new mobile booking platform whose acceptance among customers is very encouraging.
On the other hand, the business model of budget carriers can be tricky. Could you comment on Air Asia's surprising move to suspend its newly inaugurated Abu Dhabi-Kuala Lumpur flights?
It is difficult to comment on other airlines' decisions. I can only say that Malaysia Airlines has no plans to pull out of the UAE whatsoever. We even want to step up our seven weekly flights to Dubai, but we are limited by the number of aircraft at the moment.
Which destinations does Malaysia Airlines serve in the Middle East and will there be more in the near future?
Besides Dubai, we operate flights to Jeddah, Istanbul, Beirut and Karachi. We are also serving Abu Dhabi, Cairo, Bahrain, Doha, Kuwait and Muscat via our code share partners Etihad, Gulf Air, Qatar Airlines and Egypt Air. We are looking at a number of new destinations in the Middle East, but I cannot disclose them at the moment.
The other way round, most popular destinations from the Middle East to Malaysia are Kuala Lumpur, Langkawi and Penang, both in terms of business and leisure travel.
Malaysia Airlines conducted a restructuring recently. What is the current status?
We have been running a turnaround programme and have had a change at the management level. The programme has concluded, although the transformation of the company is still ongoing.
There was a voluntary separation scheme for our staff, which was reduced by 15 per cent and stands currently at 19,500.
We have imposed a hiring freeze with very few exceptions. Any new appointment has to be signed off by me personally.
When do you expect Malaysia Airlnes to reach profitability again?
We always look at profit, but a lot depends on the status of the global economy. We will start moving to growth rates in 2011 or 2012, and we feel to be in a good position as we have invested at the right time.
Recently, the Malaysian tourism minister brought up the idea of a unified Asian carrier. What is your comment on this?
This was probably a proposal based on similar developments in Europe and the US where national carriers, for example Air France-KLM, are building up large combined networks.
The advantage might be a possible consolidation of the regional aviation markets. But I need to check first what she really meant.
