Malaysia Airlines wants to return to Paris and Los Angeles. The question, though, is when…and why. Don’t expect service to resume to these cities anytime soon.
Malaysia Airlines’ Group Chief Executive Officer, Captain Izham Ismail, told reporters yesterday that the carrier is interested in resuming service to Paris (abandoned in 2016) and Los Angeles via Tokyo (abandoned in 2014). But when asked when, he stated:
Only if Malaysia Airlines successfully turns around.
And that’s really the key. While the restructure is ongoing, Malaysia Airlines is still not as “lean and mean” as it must be to viably compete absent state aid. Costs are still high, even as the carrier has been able to post modest profit in 2017.
Ismail is targeting growth of 4-5%, but his initial focus is certainly regional. The airline has or will soon add routes to:
- Nanjing, China
- Haikou, China
- Surabaya, Indonesia
- Brisbane, Australia
Ultimately a carrier cannot “grow” itself to profitability through cutbacks. Nevertheless, such growth targets should engage alarm bells: the previous two CEOs brought Malaysia Airlines back to profitability through discipline and abandoning loss-leading legacy routes. The new pilot-turned-CEO must be careful not to make the same growth mistakes his predecessors did.
I still think of Malaysia Airlines as the airline left without a seat when the music stops playing. It faces fierce long-haul and short-haul competition and that will only worsen. Even if it was able to offer nonstop A350 service to Los Angeles, it would be for reasons of national pride only…there would be no profit on the route. Perhaps Paris could work again, especially as Air France has now abandoned its CDG-KUL route. But considering the London route loses money, I question that as well.
image: Malaysia Airlines (A350 First Class)