Malaysia Airlines (Kuala Lumpur) has ended scheduled Airbus A380 service on its flagship route to London Heathrow. The last A380 service departed from LHR on March 5 as flight MH 3. LHR was the last A380 destination for the type for the airline.
The new Airbus A350-900 is now assigned to the route.
Malaysia will continue to use the type as a charter aircraft. The aircraft are being reconfigured to carry Hajj pilgrims to Saudi Arabia.
Copyright Photo: Malaysia Airlines Airbus A380-841 9M-MNB (msn 081) LHR (SPA). Image: 935726.
Malaysia Airlines (Kuala Lumpur) is “technically bankrupt” according to its new CEO Christoph Mueller, formerly of Aer Lingus. Mueller announced today at a press conference the company will cut around 6,000 jobs in order to reduce costs. The airline continues to operate normally.
The airline will also rebrand on September 1. Mueller did not want to offer any details on the rebranding.
Mueller also stated the new airline could break even by 2018.
A full review is underway on all routes and some routes will be dropped.
As previously reported, a new legal entity, Malaysia Airlines Bhd (MAB), will replace the technically bankrupt Malaysian Airline System Bhd (MAS).
An analyst comment from Ken Odeluga, a senior market analyst at www.cityindex.co.uk
Christopher Mueller’s strategic comment very much suggests the recently appointed CEO is trying to afford himself maximum flexibility in the difficult months ahead.
There’s a moderate possibility the airline will in practice not be formally declared bankrupt.
We note Malaysian bankruptcy law provides a much lower threshold to judge going concerns than would apply to Malaysian Airlines.
Its balance sheet is remarkably clean under the circumstances with about $810m of accumulated losses including $75m of hedge accounting.
Aside from that, there is no other red ink at all—no significant impairments or other risky effects and its most recent pre-tax margin at 17% is well above MA’s internal run-rate.
The burdens that exist are of course not inconsiderable, but the point is, the airline has been carrying them for longer than its crisis has been going on.
Its bigger problems involve the significant depreciation in the ringgit against the dollar that continues to shave off its room to manoeuvre, not to mention political interference, powerful unions, and more than a whiff of alleged corruption.
MA’s cost base could be about 20% higher than those of its rivals.
Mueller will need in the near-to-immediate term, all his negotiating, persuasive and coercive skills in dealing with all sorts of stakeholders—those which are legitimate and those for whom that term is more arguable.
At least there does now appear to be a will in the State apparatus that wasn’t there a year ago.
Mueller will have the ear of those strong enough to bulldozer parties which might attempt block the root-and-branch reform of the airline that will be necessary to make it what it may never really have been—competitive.
Copyright Photo above: SPA/AirlinersGallery.com. Malaysia Airlines is reviewing its fleet of 13 Boeing 777-200 ERs and will also attempt to find buyers for two of its six Airbus A380s. Airbus A380-841 9M-MNB (msn 081) approaches the runway at London’s Heathrow Airport.
Malaysia Airlines (Kuala Lumpur), owned by a majority share by a holding company of the Malaysian government, is considering changes in the the wake of the two tragic accidents this year.
According to RT.com, the government is considering a rebrand, a different ownership restructure, a possible new name and an adjustment of its route network.
Malaysia Airlines is very likely to change.
As far as the livery, the two ill-fated Boeing 777-200 ERs wore the older 1987 livery (above) which features the red and blue Kelantan Wau Bulan (Moon Dragon Kite) tail logo which has been seen in the headlines over and over, especially with the debris in eastern Ukraine. Any brand refresh would probably retire this iconic and historic logo.
Top Copyright Photo: Richard Vandervord/AirlinersGallery.com. Boeing 737-8FZ 9M-MLH (msn 31723) is pictured in action at Phuket, Thailand in the 1987 color scheme.
Malaysia Airlines:
Below Copyright Photo: Ivan K. Nishimura/AirlinersGallery.com. Malaysia refreshed the red and blue Kelantan Wau Bulan (kite) livery in 2010 with this new twin arc look while retaining the kite tail logo. Boeing 737-8H6 9M-MSE (msn 40147) passes through Honolulu on delivery.
Below Copyright Photo: Michael B. Ing/AirlinersGallery.com. When Malaysia introduced the new Airbus A380, the airline unveiled this special A380 livery (for only the A380s) in 2012. The red and blue kite morphed into a blue kite for the A380s. Is this enough of a change? Probably not. Airbus A380-841 9M-MNB (msn 081) departs from London (Heathrow).
Bottom Copyright Photo: Christian Volpati/AirlinersGallery.com. When MSA was split into Malaysian Airline System (MAS) and Singapore Airlines, Malaysian (later Malaysia Airlines) originally introduced this livery in 1972. As you will note, the original livery featured a red and white kite tail logo. Dropping this historic logo will be a tough decision for the airline but unfortunately it is now a tarnished logo. Boeing 737-2H6 9M-MBH (msn 20926) prepares to depart from the gate at Kuala Lumpur.
