Malaysia Airlines and Thai Airways International shrinking their networks

BANGKOK, Thailand – Malaysia Airlines (MAS) announced on Saturday through a statement given to Malaysia’s national press agency Bernama, that on May 29 it will terminate one of the carrier’s most symbolic routes.

The Kuala Lumpur-Frankfurt route has been flown by the carrier without interruption since 1977. Currently served by a Boeing 777 on a daily base, this MAS flight currently represents 44% of all the capacities offered between both cities, the equivalent of 6,400 seats per month. The announcement was done by Malaysia Airlines Director for Germany, David Rajkumar Subramaniam.

Competition has been particularly intense on European routes, especially after Lufthansa’s decision to start flying non-stop between Frankfurt and Kuala Lumpur last year. Earlier this year, the German carrier decided to step up frequencies to a daily flight.

According to a MAS statement, the revised network plan is in line with MAS’ overall strategy to be more regionally focused, with a strong global connectivity through its Oneworld alliance and partners.

“Our challenge is to ensure (that) MAS operates and utilizes its fleet at an optimum level, as well as maximize revenue on every route it flies,” MAS Chief Executive Officer Ahmad Jauhari Yahya said in the statement.

MAS today continued to operate several unprofitable and low yield routes, with little passenger flow through to other routes in the network. Other recently-closed routes are Kuala Lumpur to Kochi as well as Krabi and Kunming.

Across the Malaysian-Thai border, Thai Airways International is also embarked on a rehabilitation plan which looks at stopping many unprofitable routes. In Europe, Madrid is due to be abandoned in the autumn while the double-daily frequency to London has been reduced to only one flight/day. Other recently-closed routes from Bangkok include Johannesburg in January, Moscow since the end of March, as well as Phuket-Seoul. Acocrding to Kulit Sombatsiri, Director-General of the State Enterprise Policy Office, Thai Airways International is expected to turn the corner by 2016 following its rehabilitation. The airline is due to take away from its fleet its oldest aircraft and reduce its staff by voluntary retirement. It will also divest its non-core assets such as hotels or catering activities in non-aviation. New aircraft deliveries are likely to be also delayed.

Meanwhile, Garuda Indonesia – despite losing money last year – is still considering to expand this year. Garuda Indonesia’s new CEO, Arif Wibowo, indicated the airline’s intention is to soon open frequencies to Paris and Frankfurt. Both countries are targeted, because it has a major contribution to the economy of Indonesia. Garuda Indonesia is expected to receive three new Boeing 777-300ER from July 2015 boosting its B777 fleet to 9 units. The new flights could be opened in the third and fourth quarter of this year. However, they might make a stop-over en route due to runway capacity constraints for a full load B777 at Jakarta Soekarno Hatta International Airport.