MAS to relaunch with 2018 breakeven target

Malaysia Airlines is targeting breakeven by 2018 as it prepares to relaunch itself as a new carrier on 1 September.

Chief executive Christoph Mueller, briefing the media in Kuala Lumpur for the first time since taking the helm of the carrier last month, today confirmed MAS's intent to reduce its 20,000-strong workforce by 6,000.

The Oneworld carrier's owner Khazanah Nasional had already, in August 2014, outlined plans to cut its workforce by around 30%, while detailing a major restructuring of the loss-making carrier and its revamp under a new structure.

The carrier is now "technically bankrupt", admits Mueller, but he adds: "The [old] MAS has left cruising altitude and we are now preparing for a safe landing. The new airline will soon be ready for boarding."

On 25 May, an administrator was appointed for the airline to facilitate the transfer of selected assets and liabilities from MAS to the new company.

Mueller indicates that after the revamp, MAS will adopt the mindset of a start-up and adhere to a group structure rather than its current single-company format. The airline's subsidiaries MASwings, Firefly, MASkargo will join its MRO operations in the new group.

 

MAS has also applied for a new air operator's certificate, as well as for the continued use of the MH code on its flights.

 

To achieve this, he says, MAS will undergo "capacity rightsizing" by down-gauging the type of aircraft used on less passenger traffic-heavy routes or, if need be, cancel the route. The carrier will also cut its number of vendors down from nearly 20,000 to around 2,500 to bring about more "transparency and opportunities".

He adds: "A timeframe of around two years will be needed to see the effects."

Mueller also rejected reports that the carrier will focus on regional routes, but did not disclose planned changes to its network.

"We will remain a full-service international carrier, and not a regional carrier. We will not change the fingerprint of MAS."

Mueller admits MAS will not be able to claim a leading market share in the Southeast Asia region because of competition from neighbouring full-service airlines and low-cost carriers.

However, he is confident that if the group can still do well provided it "enjoys a 50% market share at home [with help from Firefly and MASwings], as well as MAS's nonstop international services".

Mueller says MAS will continue to remain in Oneworld, citing the alliance's "usefulness".

"We wouldn’t exclude anything at this time and we will continue metal-neutral relationships with our partners. We will still go forward with plans to seek more interlining and codesharing opportunities," he adds.

"There is simply no margin for error."