Full recovery of domestic airline industry expected by end-2022 — Malaysia Airlines

Ahmad Luqman Mohd Azmi (Photo by Shahrin Yahya/The Edge)

Ahmad Luqman Mohd Azmi (Photo by Shahrin Yahya/The Edge)

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KUALA LUMPUR (Aug 26): Malaysia Airlines Bhd is projecting the domestic airline industry to restart in the fourth quarter of 2021 and to reach its peak — being pre-pandemic levels, by the end of 2022 — if the current Covid-19 situation improves as projected.

Speaking to the media today at a virtual "Airline 101" session, Malaysia Airlines group chief operations officer Ahmad Luqman Mohd Azmi added that for the international space, the airline is projecting a full recovery to happen only in 2023 or 2024.

When asked if Malaysia Aviation Group Bhd's (MAG) Long Term Business Plan 2.0 (LTBP 2.0) would see a reset because of the Movement Control Order 3.0 (MCO 3.0), Ahmad Luqman said that the LTBP 2.0 was launched during the pandemic and took into consideration certain projections of recovery.

"We have started that process with our restructuring programme, which we successfully implemented in March this year. We are in full gear to implement the LTBP 2.0 and we have taken into consideration some recovery scenarios in our plan. I believe we are on track for that," he replied.

Malaysia Airlines is a wholly-owned subsidiary of MAG.

Under the group's five-year turnaround plan from 2021 to 2025, it is aiming to be cash flow positive by 2023 by slashing costs while growing revenue.

Notably, one of the five strategic pillars in MAG's LTBP 2.0 is to recapture market share in its home ground, being the domestic and ASEAN markets.

Wholly-owned turboprop operator FlyFirefly Sdn Bhd is re-entering the short- to medium-haul jet operations to help in its bid to recapture market share.

The plan was to have Firefly commence its jet operations in May from the Penang International Airport hub using Boeing 737-800s. Firefly plans to eventually operate up to 10 narrow-body jets, connecting seven countries by 2025, including Japan, China and South Korea.

While the operations did commence in May this year, it hit a speed bump. Ahmad Luqman said that the plan had to be temporarily deferred due to the MCO 3.0.

"We started briefly in May this year. Unfortunately, the MCO 3.0 happened and we had to defer the plan. If things go well, we will have the operations starting again in the early first quarter next year, subject to the recovery of domestic business," he said.

Meanwhile, Ahmad Luqman also shared that the most pressing challenge that the airline industry will face when it restarts is the readiness of the team to meet the rebound in the market.

"It comes from the aircraft service team, the ground readiness as well as the pilot readiness. Compared with in 2019, the airline, on average, has been operating at about 30% of its network since the pandemic.

"The challenge will be to ensure that staff competency remains high. I would like to avoid unnecessary human error," he said, adding that it is a risk that the group is closely monitoring.

Lam Jian Wyn