Thursday, September 17, 2009

MAS and AirAsia

MAS and AirAsia Can Work Together
By: John Teo

The less-than satisfactory exercise to “rationalise” air services within the country has returned to haunt us.

The government first gave AirAsia its approval to ply the Kota Kinabalu-Sibu route, only to withdraw it upon representation by MASWings, the affiliate of the national carrier created to serve the unprofitable rural routes in Sabah and Sarawak. The route will henceforth be taken off some time in October.

MASWings appears able to produce paperwork showing it has the route exclusively to itself, as part of the deal with the government to take on unwanted rural air services.

Although the rural air services are subsidised by the government, MASWings claims that subsidies are only partial and that it, therefore, needs profitable routes, such as Kota Kinabalu-Sibu, to cross-subsidise its other routes.

All very well, except that air passengers in Sibu feel shortchanged and are making their unhappiness felt, to the particular discomfort of Sibu member of parliament and Deputy Transport Minister Datuk Robert Lau.

Why shouldn’t they? AirAsia’s Airbus 320s provide superior speed and comfort at more attractive fares than MASWings’ 70-seater planes. It is small wonder Sibu passengers started deserting MASWings after AirAsia started its route from there to Kota Kinabalu. Hence, the complaint to the government by MasWings.

The ugly catfights between Malaysia Airlines (MAS) and AirAsia that we thought were history are revived, with Mas employees’ unions pitching in, blaming AirAsia for the redundancies and retrenchments they’ve had to endure, among other things.

By the looks of things, MAS and MasWings are looking back wistfully to the days of old when they had a monopoly of flights all across the nation. They charged exorbitant fares and yet lost money. Their resentment of AirAsia is understandable, but their arguments against what they see as a competitor will not wash.

AirAsia did not cause a race to the bottom, as MAS would have us believe. The low-cost carrier did not so much steal passengers from the national carrier as create plenty of new passengers. I have relatives living and working in various parts of the country, for example, who now regularly commute back to Kuching over long weekends. That would have been unthinkable back in the days when the only option was to travel on MAS.

AirAsia would most probably be unsustainable had it relied only on poaching passengers who used to fly MAS. Cheap air travel has to be one of the greatest contributors to pulling our far-flung country closer together.

The more plausible problem for Mas is that it has been caught on the back foot by AirAsia and is still struggling to get a grip on what sort of airline it should now be. That need not necessarily reflect negatively upon MAS.

AirAsia, after all, is a phenomenally successful low-cost carrier pioneer in all of Asia and unfortunately for MAS, both share the same home base. Going forward, where Malaysia goes in aviation, the rest of Asia is likely to follow.

It may well be that the future of air travel around the world post-Great Recession is low-cost airlines. We should hope not. If nothing else, we do not want to exchange a MAS monopoly for one by AirAsia.

AirAsia does need to be held in check. We all have come to accept it is a budget carrier by putting up with the occasional delays and other in conveniences. We would not think of risking any important appointment, for example, by opting for AirAsia and expecting it to unfailingly fly at the appointed time.

Yet, I have a sneaking suspicion that the airline is starting to take too cavalier an attitude towards its passengers’ growing acceptance of its shortcomings. It needs to be very careful that it does not jeopardize its leadership position in the low-cost segment by taking its customers’ goodwill too much for granted.

How to ensure that MAS remains a sustainable full-service option for domestic air travellers? Now, that is a really tough question. I do not for one moment envy MAS’ management for having to grapple with that problem. It probably needs to downsize even further, to become a much more nimble, truly niche airline that goes for the high yields of passengers willing to pay full fares for hassle-free comfort, reliable services and interline connectivity to destinations beyond Malaysia.

Now that we have become the regional aviation leader, we also need a competent government agency to oversee the industry’s healthy growth and development. We need to sustain that leadership position in the lead-up to full open-skies liberalisation in the region.

The “rationalisation” exercise clearly still needs tidying up. It seems plain that what are truly rural air services need to be fully recognised as such and full government subsidies extended to MASWings so that MAS is freed to compete with- and/or complement – AirAsia, as the travelling public clearly wants them to.

Source: New Straits Times, Friday, August 21, 2009.
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Saturday, September 1, 2007

50 Years of Malaysian Airport

50 Years of Malaysian Airport

It was a circular concrete landing ground 1,000 yards in diameter. It was bound by an open perimeter ditch and drained by a system of sub-soil drains. On the outside of the perimeter ditch, an annular space 200 yards wide provided extra clearance for aircraft rising from the landing ground.

This described Malaysia's first civilian airport in Bayan Lepas, Penang. It was built in 1932 at a cost of RM135,741. Three years later, it had full night landing facilities and a permanent hangar 100 feet square by 25 feet high was being built.

Penang replaced Alor Star as the transit stop for KLM and Imperial Airways that made it a port of call, where it served as the terminal port for the Penang-Hong Kong service. At the outbreak of the Second World War, Malaysia had 10 airstrips namely, Port Klang, Ipoh, Sitiawan, Taiping, Simpang Ampat, Batu Pahat, Kluang, Kota Baru, Kuching, and Bintilu.

In fact, Bintulu airport was listed in the Guiness Book of Records as the only airport in the world that is in the heart of the city. In 1933, Malaysia's first international aerodrome, the Sungai Besi Airfield, receiced its first international commercial aircraft.

The rapid growth in air transportation saw the airport expanded at a cost of RM590,000. The attap shed terminal was replaced with a new terminal as well as four hangars and a 6,200-feet tall weather runway.

In 1956, the airport was declared an international airport, marked by the flight of a turbo-propeller Bristol Britannia aircraft to Europe. By 1957, the country had two international airports and six domestic airports that recorded a total of 130,000 passengers.

Within two years of independence, the federal authorities came up with a blueprint for a brand new international airport for Kuala Lumpur to be located in Subang. Six years later in 1965, the RM52 million Subang International Airport was opened with facilities, amenities and accoutrements befitting a modern international airport.

Subang served as the main gateway to the country for the next 30 years, recording exponential passenger and cargo growth. It underwent several renovations and facility upgrade to meet the growing needs including the introduction of a primary radar for air traffic control, upgrading of the main terminal and expansion of the hangar.

At the same time, airport development projects were also carried out in other parts of the country such as Penang, Kota Bharu, Kuala Terengganu, Kota Kinabalu, Pulau Langkawi, Ipoh, Miri and Sibu.

The surge of airport development projects provided Malaysians the opportunity to acquire and upgrade their airport design and construction expertise. As a result, Malaysia developed a corps of specialists who could manage, plan, design and build airports of various sizes and scale. This reservoir of local specialists formed the bedrock of the KL International Airport (KLIA) development project. KLIA represented a giant leap in Malaysian civil aviation history.

It was the solution to the congestion experience in Subang Airport.In 1991, the government privatised the development of KLIA by forming Kuala Lumpur International Airport Berhad to undertake the project management of the new airport. In the same year, Parliament passed a bill that split the functions of the Department of Civil Aviation (DCA).

While DCA continue its role as the regulatory authority, a private company, Malaysia Airports Berhad took over the responsibility of operating, managing and maintaining the country's five international, 14 domestic and 15 Short Take-Off and Landing Ports (STOL Ports).

KLIA opened in 1998 as the result of a visionary strategy to meet the needs of new large aircraft and the traffic demand of the 21st century.

The award-winning airport is able to handle 25 million passengers per annum, and ultimately 100 million by the end of the next century.

A year later, Malaysia Airports became the first airport operating company to be listedbin Asia and the sixth in the world. The company was listed on the main board of Bursa Malaysia.

The core activities of the company include the management, operation and maintenance as well as development of airports with primary importance being placed on the operational efficiency, safety and security of passengers, cargo and aircraft operations.

Besides its core business activities, Malaysian Airports has in its corporate structure, a few subsidiary companies to offer a range of aviation and non-aviation-related products and services.

Malaysia Airports' present corporate structure includes 10 operating subsidiaries; Malaysia Airports Sdn. Bhd., Malaysia Airports (Sepang) Sdn. Bhd., Malaysia Airports (Niaga) Sdn. Bhd., Malaysia Airports Management & Technical Services Sdn., Sepang International Circuit Sdn. Bhd., Malaysia Airports Technologies Sdn. Bhd., Malaysia Airports (Properties) Sdn. Bhd., K.L Airport Hotel Sdn. Bhd., MAB Agriculture-Horticulture Sdn. Bhd. and Asia Pacific Auction Centre Sdn. Bhd. Its associated company is Urusan Teknologi Wawasan Sdn. Bhd. The Group has a total staff strength of over 7,000 deployed across 39 offices nationwide.

It is currently providing training for 238 personnel assigned to the new Hyderabad international Airport in India.

It is also part of a consortium that was awarded a contract for the restructuring and modernisation of the New Delhi Airport.

In April this year, it was awarded a 10-year contract to manage, operate and maintain the Astana International Airport in Kazakhstan under a trust management. Three months later, Malaysia Airports added another airport in its portfolio when it won the bid to manage Sabiha Gokcen International Airport, the second airport for Turkey.

The airport transportation industry is dynamic and airports are in a continuous state of flux with upgrading, expansion and maintenance works. Airports in Malaysia are no different. KLIA is nearing full capacity and a new satellite building is to be constructed soon.

A new dedicated low-cost carrier terminal was built at the KLIA, which now accommodates low-cost carriers operating to Malaysia.

The introduction of the Airbus A380 and Boeing 787 is expected to herald more changes in the design and operation of airports. The challenge to Malaysia Airports is to manage the expectations of the industry, stakeholders and the nation.

Source: Fauziah Ismail, A New Straits Times Special, August 31, 2007
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