Hong Kong a big part of Malaysia Airlines’ planned comeback

Hong Kong — After reputation battered by 2014 disasters, company to extend reach into China, and bet big on flights between city and Kuala Lumpur.

After the high-profile losses of two planes in 2014, and a brand name tarnished to the brink of collapse, Malaysia Airlines will make Hong Kong a big part of its comeback in 2017, chief executive Peter Bellew has said, with flights to China a key plank of its hoped-for revival.

The Kuala Lumpur carrier is on track to add nine new mainland routes this year, with bosses planning to boost existing flights to Shanghai and Hong Kong.

But the company is stained by the nightmare of flight MH370, the Malaysia Airlines flight that went missing in March 2014 en route from Kuala Lumpur to Beijing. Of the 239 passengers aboard, 154 were Chinese.

The international underwater search for the plane was suspended last week.

“I think the Chinese have forgiven us for what has happened,” Bellew said, adding that senior aviation officials in China had backed the company’s plans.

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Bellew said China was an “outstanding” opportunity, given the cultural similarities between it and Malaysia, and said he wanted to see up to 6 million more Chinese tourists visit Malaysia.

The two countries’ political and commercial ties are growing closer, particularly after Malaysian Prime Minister Najib Razak’s visit to Beijing late last year, after which he returned home with 144 billion ringgit (HK$244 billion) of agreed trade deals.

Malaysia Airlines is looking to cement that partnership with nine new mainland routes – including to Chengdu, Chongqing, Fuzhou, Haikou and Nanjing – and by doubling its daily flights to Shanghai in response to what it sees as overwhelming demand for travel from China.

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After years of losses – widely attributed to the image damage of the MH370 disaster and the shooting down of its flight MH17 over Ukraine four months later – the airline’s future looks less bleak. In the final quarter of 2016, 82 per cent of seats were filled. The company registered a monthly profit in December, and business class bookings have doubled.

All of that would not have happened, Bellew said, “if the brand isn’t acceptable to people, or was badly damaged.”

The company’s confidence-building plans include doubling down on the its Kuala Lumpur-Hong Kong route, with a bigger plane for one of its three flights between the cities each day, more economy class seats and lie-flat business class beds.

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The airline plans to move all three daily flights to the bigger aircraft eventually.

Brendan Sobie, Southeast Asia analyst at CAPA Centre for Aviation, said the airline had momentum on its side with China.

“There is a lot of opportunity in China for Malaysia Airlines, but there is also a lot of competition in the Malaysia-China market, and some risk, as the growth we have seen in this market over the last year may not continue indefinitely,” he said.

And Maybank Kim Eng’s analyst Mohshin Aziz said the carrier was “stepping up to the first division” from recently being “fundamentally bankrupt”.

Bellew said: “MH370 will affect staff for ever, some of whom lost family and friends. But they have built resilience. Part of what we are doing is harnessing that energy. We were the pride of the nation. We want to restore that.”

Source: South China Morning Post