Malaysia Airlines expects to break even this year

Group CEO Captain Izham Ismail says the airline is developing a medium-term strategy.

KUALA LUMPUR: Malaysia Airlines Bhd (MAB) aims to at least break even this year despite facing global economic and geopolitical challenges, competition, and uncertainty in foreign exchange and fuel prices.

Group chief executive officer (GCEO) Captain Izham Ismail said MAB’s current operations and finance were not yet viable, recording inconsistent monthly and weekly profits.

“No doubt we have reset ourselves, we’ve shrunk slightly, we will grow again, but (my) first job is to make this company sustainable again.

“We can still go to four corners of the world through good partnerships with other airlines, synergy with other airlines, but we are taking a few steps back and I don’t see why we can’t grow again,” he said in an interview on TV3 recently.

Izham said Malaysia Airlines is currently developing a medium-term strategy, which includes enhancing partnerships with other airlines to improve its network of routes.

Not only that, he said, Malaysia Airlines was aware that it could not compete directly with low-cost airlines on several routes, as well as the need to switch to other routes more suited to its aircraft and business model.

However, for the time being, the main focus is to work with other major airlines that provide access to important routes in Europe besides India.

Currently, MAB is planning to expand its operations to several new routes.

“While waiting for Malaysia Airlines to grow into a 120-airplane company, there must be an intermediate strategy, this is through partnerships, as long as the 14,000 people and whole country (give the) support, there is no reason to fail,” Izham said.

Izham took over as GCEO from Dec 1.

Described as the most challenging corporate task in Malaysia, if not the world, to the extent that two foreign aviation experts withdrew as CEO in quick succession, the responsibility is now shouldered by a home-grown talent again.

Izham is no stranger to the national carrier, having spent 38 years at the airline and handled 18 portfolios in the last 20 years.

Unlike his predecessors, Izham said he would take time to set the strategy.

Asked about the possibility for the MAB to be renamed as proposed by ex-CEO Christoph Mueller in 2015, Izham said the value of Malaysia Airlines was still strong.

“Our value (is) very strong, it’s our tradition, we are humble people, caring people, we help each other, we smile always, not negative towards others, I don’t see anything wrong with the brand, we probably had some issues in 2014, but the brand is stronger than ever (now),” he said.

Moving forward, MAB is expected to introduce three to four new routes a year to suit the specifications of its new aircraft.

In fact, Izham also hinted that more destinations would be introduced instead of only focusing on certain markets.

“Malaysia Airlines needs to smartly distribute our basket equally, not only on Australia, not only Europe, we need also to focus on China, Indonesia, equally spread out our basket, if one region is not economical, we have other routes,” he said.

The restructuring plan of Malaysia Aviation Group, which includes MAB, will also be announced at the end of March.

Currently, a detailed study is being carried out at the operational level of branches of all MAB’s subsidiaries, including Firefly, Maskargo and AeroDarat Services to ensure that the organisation is re-strengthened.

Izham said Malaysia Airlines should not have just one plan but it should be prepared with a few plans to face various possibilities.

With the exception of Maswings – whose mandate was given by the government to link Sabah’s and Sarawak’s towns with Peninsular Malaysia – the objectives of other subsidiaries in the group should be scrutinised.

“Moving forward, we are also reviewing what is the prime objective of Firefly, what’s the objective of AeroDarat, if it makes sense for MAB to have a cargo division, I am reviewing all these and then by end-Q1, I’ll have a more concrete (picture), to make (the) organisation structurally stronger,” Izham said.

On Malaysia Airlines’ “Project Amal” (to cater specifically for haj and umrah pilgrims), which was introduced by his predecessor, he said it would be continued.

“We anticipate to get the licence at end-Q3 or Q4. Project Amal will commence operations with its planes, sometime in late 2018, meanwhile, the assets will be utilised by MAB,” he said.

Projected as the world’s first airline to cater specifically and only to haj and umrah pilgrims, Projek Amal, will use Airbus 380. It will operate on its own first, before opening up to potential cooperation and investment from outsiders. -FMT