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Old March 4th, 2006, 06:15 AM   #401
hkskyline
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Air Asia offers to take up Malaysia Airlines assets

KUALA LUMPUR, March 4, 2006 (AFP) - Budget carrier AirAsia has offered to take on staff and aircraft from ailing Malaysia Airlines if it wins approval to ply most of the national airline's domestic network, a report said Saturday.

AirAsia chief executive Tony Fernandes said he had submitted the offer to the government, which could see the carrier recruit up to 800 Malaysia Airlines (MAS) staff, and buy or lease between four and nine of its current B737s.

"These are among the proposals that we have put forward to help the government cap losses in MAS domestic operations," he was quoted as saying in the New Straits Times.

"The market for aircraft is very buoyant right now. There is so much demand for the 737-400. This could generate a lot of cash for (Malaysia Airlines), which is good for their turnaround plan," he added.

Loss-making Malaysia Airlines this week announced a three-year rescue plan to return the carrier to profitability, which includes proposals for a revamp of its domestic network.

Budget carrier Air Asia has been lobbying the government to expedite a plan to rationalise domestic air routes and has offered to take over the lion's share of Malaysia Airlines routes.

Fernandes said his budget carrier, which derives much of its business within Malaysia, stood at the ready to take on the routes.

"We are prepared to take on the responsibility almost immediately. In addition, we can also guarantee that the services provided will be profitable as we will use our present business model," he was quoted as saying in the NST.

AirAsia, which launched as a budget carrier in December 2001 with just two aircraft, has become a significant player in the industry and been imitated by national carriers along with a host of new low-cost entrants.

It is now Southeast Asia's biggest low-cost carrier in terms of fleet size. It also operates in Thailand, Indonesia, the Philippines and China.
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Old March 4th, 2006, 02:11 PM   #402
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From: http://au.news.yahoo.com/060304/19/y49p.html
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Saturday March 4, 02:42 PM
Malaysia Airlines to start route rationalisation end March

KUALA LUMPUR (AFP) - Malaysia Airlines will start cutting out unprofitable routes by the end of March as part of efforts to restructure the loss-making national carrier.
The first phase of its route rationalisation program will start on March 26 and involve the axing of domestic destinations currently included in long-haul international flights, it said in a statement late Friday.

"This rationalisation is part of the national airline's business turnaround plan to refocus from a largely point-to-point carrier to a world-class connecting carrier with a major hub in KLIA," it said, referring to the Kuala Lumpur International Airport.

Managing director Idris Jala on February 27 floated a three-year rescue plan to revive the carrier's fortunes as it posted a 1.3 billion ringgit (350 million dollar) loss for the 2005 financial year.

"Given the existing market realities, Malaysia Airlines flight operations will thus gradually shift from point-to-point network to a "hub and spoke" network, thus increasing competitiveness to connect as many core markets as possible," it said.

In the changes, twice weekly one-way flights from London to Kuala Lumpur which currently stop in either the northern Malaysian islands of Langkawi or Penang will become direct flights from the British capital.

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Kuching, the capital of eastern Sarawak state, will be dropped from twice weekly one-way and return flights from Sydney and to Perth respectively, as well as thrice weekly return flights to Frankfurt.

"Malaysia Airlines will use its existing Malaysian domestic services between KLIA, Langkawi, Penang and Kuching to provide immediate connections for these realigned long haul international flights," said the carrier.

Malaysia Airlines has blamed its losses on crippling fuel prices and lower load factors but projected a return to profitability in 2007.

The turnaround plan, to cost some four billion ringgit, includes the restructuring of the carrier's loss-making domestic service to collaborate with, but also better compete against, low-cost carrier Air Asia.

Idris has asked the government for a freehand in making changes, including taking over the domestic route operations from parent company Penerbangan Malaysia.

"I believe we can fix the domestic sector to improve the profitability and as long as we are given the last say ... I know we can do it," Idris was quoted Saturday as saying in the New Straits Times.

"Going forward, we would need to reduce our cost drastically to make it profitable."
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Old March 4th, 2006, 02:13 PM   #403
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From: http://au.news.yahoo.com/060304/19/y4b4.html
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Saturday March 4, 06:56 PM
Malaysia Airlines restructures as AirAsia makes offer on assets

KUALA LUMPUR (AFP) - Embattled Malaysia Airlines has begun implementing a restructuring plan by revamping unprofitable routes as budget carrier AirAsia offered to take up some of the national carrier's assets.
The loss-making national airline said it will start the first phase of a route rationalisation program on March 26, when it drops domestic destinations currently included in several long-haul international flights.

"This rationalisation is part of the national airline's business turnaround plan to refocus from a largely point-to-point carrier to a world-class connecting carrier with a major hub in (Kuala Lumpur International Airport)," it said in a statement late Friday.

Managing director Idris Jala on February 27 floated a three-year rescue plan to revive the carrier's fortunes as it posted a 1.3 billion ringgit (350 million dollar) loss for the 2005 financial year.

The plan includes extensive cost-cutting and the axing of unprofitable domestic and international routes.

"Malaysia Airlines flight operations will thus gradually shift from point-to-point network to a "hub and spoke" network, thus increasing competitiveness to connect as many core markets as possible," it said.

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In the changes, twice weekly one-way flights from London to Kuala Lumpur which currently stop in either the northern Malaysian islands of Langkawi or Penang will become direct flights from the British capital.

Kuching, the capital of eastern Sarawak state, will be dropped from twice weekly one-way and return flights from Sydney and to Perth respectively, as well as thrice weekly return flights to Frankfurt.

Malaysia Airlines has blamed its losses on crippling fuel prices and lower load factors, but projected a return to profitability in 2007.

The turnaround plan, to cost some four billion ringgit, includes the restructuring of the carrier's loss-making domestic service to collaborate with, but also better compete against, low-cost carrier Air Asia.

Budget carrier AirAsia in turn has been lobbying the government to expedite a long-awaited plan to rationalise domestic air routes and has offered to take over the lion's share of Malaysia Airlines routes.

As part of the push, AirAsia chief executive Tony Fernandes has offered to take on staff and aircraft from ailing Malaysia Airlines if it wins approval to ply most of the national airline's domestic network, according to reports Saturday.

Fernandes said he had submitted the offer to the government, which could see the carrier recruit up to 800 Malaysia Airlines staff, and buy or lease between four and nine of its current B737s.

"These are among the proposals that we have put forward to help the government cap losses in MAS domestic operations," he was quoted as saying in the New Straits Times.

"The market for aircraft is very buoyant right now. There is so much demand for the 737-400. This could generate a lot of cash for (Malaysia Airlines), which is good for their turnaround plan," he added.

Idris, who is reportedly willing to collaborate with AirAsia on domestic routes, has asked the government for a freehand in making domestic network changes, including taking over the operations from parent company Penerbangan Malaysia.

"I believe we can fix the domestic sector to improve the profitability and as long as we are given the last say ... I know we can do it," Idris was quoted Saturday as saying in the NST.
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Old March 5th, 2006, 08:23 PM   #404
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hi all, actually is there any problem in Air Asia I.T departments except all those articles published?? I feel this company is monopolizing airlines in malaysia...
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Old March 6th, 2006, 07:09 AM   #405
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Quote:
Originally Posted by junglebellaz
hi all, actually is there any problem in Air Asia I.T departments except all those articles published?? I feel this company is monopolizing airlines in malaysia...
Not really. AirAsia doesn't operate long-haul international routes and won't likely start since it is not profitable under their budget model.
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Old March 6th, 2006, 01:03 PM   #406
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Malaysia Airlines Removes Stopovers

Associated Press
All Associated Press News

KUALA LUMPUR, Malaysia (AP) - Money-losing Malaysia Airlines said it will remove stopovers on several long-haul flights to Europe and Australia next month as part of the company's turnaround plan.

From March 26, the airline will fly direct between Kuala Lumpur and London, Sydney, Perth and Frankfurt. At present, some flights to these destinations touch down in the Malaysian airports of Langkawi, Penang and Kuching.

The carrier, Southeast Asia's biggest by fleet size of about 100 aircraft, said it would use domestic flights between Kuala Lumpur International Airport and Langkawi, Penang and Kuching to provide convenient connections for these realigned international flights.

"This rationalization is part of the national airline's business turnaround plan to refocus from a largely point-to-point carrier to a world-class connecting carrier with a major hub in KLIA," it said in a statement over the weekend.

It said its flights operations would gradually shift to a "hub and spoke network" to boost its competitiveness, suggesting more unprofitable routes would be rationalized.

The carrier, which reported its third straight quarterly loss last week, has said only 48 of its 114 international routes are profitable while of the 118 domestic routes, 114 are losing money.

Malaysia Airlines Managing Director Idris Jala was quoted as saying by Monday's Business Times that the carrier has too many destinations in Europe.

"We must focus on hub and spoke concept for Europe. Instead of flying from the KLIA to 10 points in Europe, (the airline) will consolidate it to four points namely London, Amsterdam, Paris and Rome," he said.

Idris has said he plans to meet Air France executives this week to seek support for Malaysia Airline's entry into the SkyTeam global alliance -- a bid to boost competitiveness as it is the only regional airline that is not part of a global alliance.

Rivals Singapore Airlines and Thai Airways are members of Star Alliance, while Cathay Pacific is part of OneWorld. The nine-member SkyTeam currently only has one Asian member, Korean Air.

Malaysia Airlines last week unveiled a radical restructuring plan to raise 4 billion ringgit (US$1.07 billion; euro898 million) to stay afloat and return to profitability by next year.

The national carrier lost 616.4 million ringgit (US$166 million; euro138.45 million) for the October-December quarter, its third straight quarterly loss, which it blamed on higher fuel cost and higher provisions.

Under the restructuring plan, the airline pledged to cut its budget by 20 percent across the board, terminate many unprofitable routes, freeze recruitment except for front-line staff, crack down on corruption by encouraging whistle-blowing and stop corporate sponsorship.

http://news.moneycentral.msn.com/pro...306&ID=5536717
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Old March 6th, 2006, 03:01 PM   #407
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OH really?! i read the Enteriprise Resource Planning (ERP) tool on..don't know which page in this thread already...sounds like AirAsia making big money...anyway...actually i was doing research on Air Asia company and there are lot of info on Air Asia business environment after i scanned through this thread....but i don't see any problem problem occurs in this company in the aspect of Information Technology...

could anyone tell me any problems that they might facing in I.T area??? Thanks
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Old March 6th, 2006, 05:03 PM   #408
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Malaysia Airlines currently flies to Buenos Aires on Wednesdays and Sundays. The route is Kuala Lumpur-Johannesburg-Cape Town-Buenos Aires and viceversa.

JAL and MAS are the only two Asians' airlines that fly to Latin America. The former does to Mexico City from Tokyo via Vancouver.

Varig is the only Latin American airline that flies to Asia, on the route Sao Paulo-Los Angeles-Tokyo. Mexicana de Aviación will start a non-stop service between Mexico City and Beijing.

I hope Latin American aviation grows up to Asia and Asian's does too. There are many asians in Latin American countries.
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Old March 7th, 2006, 03:25 AM   #409
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Quote:
Originally Posted by josevaldia
Malaysia Airlines currently flies to Buenos Aires on Wednesdays and Sundays. The route is Kuala Lumpur-Johannesburg-Cape Town-Buenos Aires and viceversa.

JAL and MAS are the only two Asians' airlines that fly to Latin America. The former does to Mexico City from Tokyo via Vancouver.

Varig is the only Latin American airline that flies to Asia, on the route Sao Paulo-Los Angeles-Tokyo. Mexicana de Aviación will start a non-stop service between Mexico City and Beijing.

I hope Latin American aviation grows up to Asia and Asian's does too. There are many asians in Latin American countries.

Malaysia airlines used to fly the LA - Mexico city route at one stage. I've heard rumours that it was enjoying such high load factors until the Mexican government terminated their fifth freedom rights. Asian airlines like MAS usually offers better service compared to American and Mexican carriers and i am not surprised that they felt threatened at that time. I've flown US carriers on international routes and their services sucks.
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Old March 8th, 2006, 04:32 AM   #410
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MAS keen on sale of aircraft

MAS keen on sale of aircraft
Wednesday March 8, 2006

By B.K. SIDHU

[email protected]

PETALING JAYA: About 30 aircraft are expected to be put up for sale if Malaysia Airlines (MAS) can persuade its parent Penerbangan Malaysia Bhd (PMB) to dispose of the planes to raise cash that it needs to fund its operations.

Sources said MAS was looking to dispose of 12 or 13 B747-400, several B737-400, Fokkers and even some Twin-Otters. The final list would be drawn when MAS has finalised its network rationalisation and fleet requirement plan, which sources said might be completed by mid-year.

“One thing for sure is the B747 would not fit into MAS’ new network plan. But MAS likes the B777 and A330 aircraft,’’ a source said.

PMB has thirty-five B737 and sixteen B747 planes. It also has 10 Fokkers and five Twin-Otters and is in negotiations to dispose of one Fokker. Talk of the B737 sale has been circulating for some time now but nothing has materialised.

A source said that this time around MAS was more serious because it needed to source for funds and maintain a fleet that was cost effective and met its requirements.

PMB has yet to decide on the request as talks between the airline and PMB were halted days before MAS managing director Idris Jala presented his business turnaround plan for the airline on Feb 27.

“They have not got back to the negotiating table but would do so in due time,’’ said an industry source.

Such a move would help the airline raise about RM759mil as it will get 80% of the proceeds from any aircraft sale as spelt out in an agreement crafted during the widespread asset unbundling exercise years ago.

The remaining 20% will go to PMB, which is 100% owned by Khazanah Nasional Bhd, the Government’s investment arm. PMB has 69% stake in MAS.

Although MAS also leases aircraft from other parties, it is leasing about 90 aircraft from PMB.

About 50% of the PMB aircraft are unencumbered and about 30 of them would be put up for sale if needed, the sources said.

MAS, in its business turnaround plan, said the average age of its fleet was seven to eight years and this had seen a 10% rise in the “number of annual heavy maintenance visits since 2001.’’

Hopefully, with the sale, MAS can rid itself of the older planes that are said to be less fuel-efficient and lease some of the latest versions that are highly fuel-efficient. Fuel is a major component of its cost and, with rising jet fuel prices, the airline is looking at ways of trimming costs.

MAS, which is turning into a leisure/business carrier, said its future fleet would comprise smaller and more fuel-efficient aircraft. It also intends to focus on regular services to destinations that it would choose to serve.

That may be MAS’ story, but is PMB gung-ho over the sale when it is also aspiring to become a regional leasor? No, according to some sources but, at the same time, PMB is very keen to help MAS ride through turbulent times and is seriously looking at the request.

“PMB wants to evaluate the case as there are pros and cons to it. If PMB sells these planes, it has to lease some of the latest versions for MAS as the sale will come with a leaseback option,’’ a source said.

AirAsia Bhd said last week it was “prepared to buy some MAS aircraft’’ and was looking at four to nine B737 planes.

Besides the aircraft sale, MAS is also looking to dispose of some of the extra engines that it had ordered years ago. In total, MAS should make about RM800mil to RM1bil from aircraft and engine sales, Jala said when he unveiled the business turnaround plan.
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Old March 8th, 2006, 04:39 AM   #411
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Oh gosh... AirAsia is doing better than MAS...

so many bad news about MAS recently...

This is very bad
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Old March 9th, 2006, 08:52 AM   #412
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Quote:
Originally Posted by globocentric
Malaysia airlines used to fly the LA - Mexico city route at one stage. I've heard rumours that it was enjoying such high load factors until the Mexican government terminated their fifth freedom rights. Asian airlines like MAS usually offers better service compared to American and Mexican carriers and i am not surprised that they felt threatened at that time. I've flown US carriers on international routes and their services sucks.
I was not talking about US airlines. But I've flown American Airlines, Continental Airlines and United Airlines. The best service of those three was offered by United Airlines.

Talking about what I meant... (Latin American airlines)... I've not flown Mexican airlines, but at least I know Mexicana de Aviación and AeroMexico have ones of the most modern fleet in Latin America Region. LAN (from Chile) does offer an excellent service. So do Varig and Aerolíneas Argentinas.

I also knew MAS flew to Mexico City, but I don't know why the service is off.

I'd like the idea about Asian airlines fly more Latin American cities. I've heard they offer excellent service, particularly Emirates and Cathay Pacific.
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Old March 10th, 2006, 05:00 PM   #413
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AirAsia to operate flights from Bangladesh

DHAKA, March 10, 2006 (AFP) - Malaysia's budget airline AirAsia will start operating flights from Bangladesh by year-end and expects the route to flourish due to demand for regional travel, an official said Friday.

"The airline will start operating flights from Bangladesh from the winter season," said Salman Obaidul Karim, managing director of East West Airlines.

East West Airlines is general sales agent for the Malaysian carrier.

The airline would begin with cheap regional flights to countries in southeast Asia followed by a joint venture with East West Airlines offering domestic flights in Bangladesh, he said.

"We see huge prospects for operating flights from Bangladesh with a large number of passengers flying regularly to Malaysia, Thailand and other destinations in the region," added Kamaruddin Meranun, deputy chief executive officer of the airline.

AirAsia, which was launched as a budget carrier in December 2001 with just two aircraft, has become a significant player in the industry and been imitated by national carriers along with a host of new low-cost entrants.

It is now southeast Asia's biggest low-cost carrier in terms of fleet size and derives much of its business within Malaysia. It also operates in Thailand, Indonesia, the Philippines and China.
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Old March 11th, 2006, 09:36 AM   #414
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MAS-Airasia Agreement On Domestic Routes In A Week Or Two

March 10, 2006 21:15 PM E-mail this news to a friend Printable version of this news

MAS-Airasia Agreement On Domestic Routes In A Week Or Two

PEKAN, March 10 (Bernama) -- Several aspects in the proposed handover of most domestic routes operated by Malaysia Airlines (MAS) to AirAsia are still being negotiated but the talks will not take long, Deputy Prime Minister Datuk Seri Najib Tun Razak said.

"It will not be long, a week or two," he said.

He said the two airlines had been asked to hold discussions in the shortest time, with the supervision of the Transport Ministry, to decide on the domestic routes each would operate.

"The outcome of the discussions would be submitted to Prime Minister Datuk Seri Abdullah Ahmad Badawi and me to make the final decision," he told reporters after launching the Pekan Maxis Cyberlab and Maxis Titian Technology Friday.

He was asked to comment on a New Straits Times report Friday which quoted sources as saying that MAS and AirAsia had agreed to divide the domestic routes between them.

The paper said MAS would be allowed to continue operating the premier domestic routes such as to Penang, Kota Kinabalu, Kuching, Alor Star and Langkawi while the rest would be handed over to the budget airline.

Najib said MAS and AirAsia in principle had agreed that most of the domestic routes would be handed over to the budget airline.

-- BERNAMA
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Old March 11th, 2006, 01:13 PM   #415
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Malaysia has been squeezed between AirAsia, Singapore, and Thai. AirAsia has soaked up domestic and short haul demand and Singapore and Thai have attracted a larger share of the long haul business traffic to the region. However Malaysia remains an excellent brand and I hope they succeed in their restructuring and recovery.
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Old March 12th, 2006, 08:59 AM   #416
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Indonesia AirAsia starts with one
GEORGE TOWN, Sat.


Indonesia AirAsia’s maiden flight from Medan to Penang touched down at the Penang International Airport yesterday evening, carrying 148 passengers.

Penang is the second Malaysian destination operated by the airline following the commencement of its Jakarta-Kuala Lumpur route last September.

Operating one service daily, the flight leaves Medan at 6.20pm and arrives in Penang at 7.20pm.

On hand to welcome the passengers were Indonesia AirAsia director Sendjaja Widjaja, Malaysian Tourism Board Medan director Noor Azman Samsudin and Ayer Itam assemblyman Cheang Chee Gooi.

Sendjaja said Penang had become the favourite destination among Medan residents attracted by its affordable medical facilities and local delicacies.

"Similarly, people from here like to travel to Medan for golf tournaments.

"Depending on the response, we will consider increasing the frequency of the flight to two per day," said Sendjaja.

The airline is offering an introductory fare of RM9.99 one-way for a week.

The budget airline is expanding its fleet of aircraft, with its fifth Boeing 737-300 received recently.

AirAsia Bhd holds a 49 per cent stake in Indonesia AirAsia.
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Old March 13th, 2006, 03:42 AM   #417
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March 13, 8:28 AM
Malaysian Airline: Domestic Route Talks Still "Ongoing"

KUALA LUMPUR (Dow Jones)--Malaysian Airline System Bhd. (3786.KU), budget carrier AirAsia Bhd. (5099.KU) and the Malaysian government are still in talks over the domestic air route plan, the national carrier said late Friday.

"Our discussions with the Government and AirAsia on the rationalization of the domestic sector are ongoing," Malaysian Airline, or MAS, said in a statement.

"We will need to analyze the profitability of all our domestic routes before we make any decisions on which routes will remain. At this stage, it will be premature on our part to make any announcements," it added.

MAS was responding to media reports Friday citing unnamed government sources that it would concentrate on five destinations under the domestic route rationalization.

AirAsia would operate the remaining domestic routes, the reports said.

A committee chaired by Prime Minister Abdullah Ahmad Badawi had decided that MAS would operate flights to Penang, Kuching, Kota Kinabalu, Alor Star and Langkawi, the reports added.
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Old March 14th, 2006, 05:30 AM   #418
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AirAsia reports leap in January, February passenger traffic

KUALA LUMPUR, March 13, 2006 (AFP) - Low-cost carrier AirAsia said Monday it had recorded increases of over 50 percent in its January and February passenger traffic in figures for the airline and its Asian associates.

Figures for January showed an increase of 50.3 percent or some 800,786 passengers carried in total by AirAsia compared to 532,667 a year earlier for the same month, it said in a statement.

AirAsia in Malaysia recorded an increase of 31 percent, Thai AirAsia a gain of 60.7 percent and Indonesia AirAsia, which started operations in December 2004, a huge gain of 236 percent.

"The number of aircraft grew from the time it was launched," an AirAsia spokesperson told AFP of Indonesia AirAsia's increase in passengers.

For the month of February, AirAsia's total operations recorded an increase of 54.8 percent in traffic, with 776,568 passengers compared to 501,798 a year earlier, it said in a second statement.

AirAsia recorded an increase of 41.2 percent, Thai AirAsia flew 58.8 percent more passengers and Indonesia AirAsia rose by 145.5 percent.

The totals represent the number of seats flown by AirAsia, regardless of whether passengers turn up, since the airline does not issue refunds for no-shows, the group said.

AirAsia was launched as a budget carrier in December 2001 with just two aircraft, and is now southeast Asia's biggest low-cost carrier in terms of fleet size.

AirAsia in February said its profits rose to 53.4 million ringgit (14.4 million dollars) in the second quarter to December from 44.4 million ringgit a year ago, due to higher loads and fares during the festive season.
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Old March 17th, 2006, 08:23 AM   #419
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MAS forges alliance with Air France KLM

MAS forges alliance with Air France KLM
Friday March 17, 2006 - www.thestar.com.my
By sabry tahir

SEPANG: Malaysia Airlines (MAS) has received Air France KLM's nod to upgrade their code-sharing agreement into an alliance, MAS managing director Idris Jala said.

However, he said no timeframe had been set for the alliance.

“We are also working towards improving bilateral code-sharing agreements and joining alliances with other airlines,” Jala said after the launch of the upgraded Animal Hotel at the KL International Airport yesterday.

Jala is believed to have met top executives of Air France KLM earlier this month to seek support for the national carrier's entry into the SkyTeam group, one of the three main global air alliances, which has a network of 684 destinations in 133 countries. MAS, which posted a net loss of RM1.26bil for the nine months to Dec 31, 2005, is the only regional airline that has yet to enter any global alliance.

On AirAsia's plan to acquire some MAS assets, including a number of aircraft, Jala said MAS would have a free hand to fully decide on its business operations, the network, the routes and even the restructuring of its domestic operations, once the MAS-AirAsia route restructuring is completed next year.

Meanwhile, MAS' cargo arm, Malaysia Airlines Cargo Sdn Bhd (MASkargo), has turned its Animal Hotel at the KLIA into one of the world's three 6-star animal hotels.

The airline invested RM15mil to build and launch the hotel – the only animal hotel in Asia – in 1998. From a hub for staging and delivery of animal shipment, the hotel has evolved into a one-stop centre for activities such as import and transhipment of animals, ranging from horses to sharks.

“We take anything except protected animals,” said MASkargo senior general manager Datuk J.J. Ong.

The new facilities at the hotel include an animal spa and jacuzzi, aromatic bath, air-conditioned rooms and spacious play areas for cats and dogs.
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Old March 17th, 2006, 01:38 PM   #420
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RATIONALIZATION OF MALAYSIAN DOMESTIC AIR TRAVEL OPERATIONS

Media Release

16 Mar, 2006
RATIONALIZATION OF MALAYSIAN DOMESTIC AIR TRAVEL OPERATIONS

We refer to the Malaysian Government's decision and guidelines released today on the above subject.

We have clearly explained our position in the Business Turnaround Plan. In the plan, we proposed to take back the P & L responsibility from Penerbangan Malaysia Berhad (PMB) on 1 January 2007 and thereafter, Government subsidy will cease on condition that we have the same freedom as AirAsia to determine flight destinations, frequency, schedule and fares and that we are allowed to restructure the business.

Based on our Business Turnaround Plan, we have the confidence to make the domestic aviation sector profitable. Consequently, effective 1 January 2007, Government subsidy will cease.

Today, we have been steered by the Government towards relinquishing routes to AirAsia based on the split between 'trunk' and 'non-trunk' routes.

We will be conducting a detail study of the commercial implication of this decision on our P & L, including engaging with AirAsia and the Government on what constitutes "trunk" and "non-trunk" routes.

Upon completion of this study, from a governance perspective, we will be engaging the Board, our staff, unions and also, shareholders as Malaysia Airlines is a public listed company.

We have also been asked by the Government to cease our 'Supersavers' scheme from Monday next week. The scheme was to cater for low sales period and targeted at a unique customer segment who want low price and 'value-for-money' offer. We have been assured that the losses incurred by its cessation will be borne by the Government. We would like to assure our customers that we will honour all the sales we have made todate under this scheme.

From MAS Media Office
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