Kuala Lumpur: The government has removed the floor price imposed on Malaysia Airlines (MAS) under the new domestic aviation policy and given the airline three new domestic routes, Johor Baharu-Kuching, Kuala Lumpur-Tawau and Kuala Lumpur-Sandakan.
MAS said in a statement Sunday the removal of the floor price, which takes effect on Aug 1, will enable the national airline to provide discounts to its passengers when it makes commercial sense to do so.
With the additional three routes, MAS' domestic routes have now increased to 22.
"During lean periods each year when air travel is typically low, it is important that MAS, like all other global airlines, has the opportunity to implement tactical and discounted prices to encourage more air travel, as it had done prior to being asked to discontinue its Supersaver fares.
"The additional three routes were reinstated because all these routes have high international traffic and high business class passengers," said MAS.
It was reported recently that the Johor and Sarawak governments had appealed to the federal government to allow MAS to fly the Johor Baharu-Kuching route. This will enable customers to choose to fly either Malaysia Airlines or low-cost carrier AirAsia.
Commenting on the government's directive, MAS Managing Director and Chief Executive Officer Idris Jala said it was timely as MAS was taking back the profit and loss of the domestic operations from Penerbangan Malaysia Bhd (PMB).
He said the new domestic aviation policy would give MAS a free hand to restructure its domestic operations to make it profitable, as outlined in its business turnaround plan announced on Feb 27, 2006.
"We can now exercise full control over our customer value proposition, frequencies, fleet, capacity and pricing to best serve the needs of our passengers as well as improve our yields on this segment of our operation," he added.
Meanwhile, MAS also denied AirAsia's claim that the national carrier received a RM1-billion subsidy from the government.
Its Executive Director and Chief Financial Officer, Tengku Azmil Zahruddin, said that under the new domestic aviation policy, MAS does not receive any subsidy or assistance from the government for any part of the domestic business.
"PMB is paying compensation of RM650 million to Malaysia Airlines in line with the contractual terms of the domestic agreement under the Widespread Asset Unbundling (WAU) Agreement.
"This is not a subsidy but a one-off contractual obligation. We are using the funds to restructure the business as this has become necessary as a consequence of terminating the agreement," he said.
MAS said in a statement Sunday the removal of the floor price, which takes effect on Aug 1, will enable the national airline to provide discounts to its passengers when it makes commercial sense to do so.
With the additional three routes, MAS' domestic routes have now increased to 22.
"During lean periods each year when air travel is typically low, it is important that MAS, like all other global airlines, has the opportunity to implement tactical and discounted prices to encourage more air travel, as it had done prior to being asked to discontinue its Supersaver fares.
"The additional three routes were reinstated because all these routes have high international traffic and high business class passengers," said MAS.
It was reported recently that the Johor and Sarawak governments had appealed to the federal government to allow MAS to fly the Johor Baharu-Kuching route. This will enable customers to choose to fly either Malaysia Airlines or low-cost carrier AirAsia.
Commenting on the government's directive, MAS Managing Director and Chief Executive Officer Idris Jala said it was timely as MAS was taking back the profit and loss of the domestic operations from Penerbangan Malaysia Bhd (PMB).
He said the new domestic aviation policy would give MAS a free hand to restructure its domestic operations to make it profitable, as outlined in its business turnaround plan announced on Feb 27, 2006.
"We can now exercise full control over our customer value proposition, frequencies, fleet, capacity and pricing to best serve the needs of our passengers as well as improve our yields on this segment of our operation," he added.
Meanwhile, MAS also denied AirAsia's claim that the national carrier received a RM1-billion subsidy from the government.
Its Executive Director and Chief Financial Officer, Tengku Azmil Zahruddin, said that under the new domestic aviation policy, MAS does not receive any subsidy or assistance from the government for any part of the domestic business.
"PMB is paying compensation of RM650 million to Malaysia Airlines in line with the contractual terms of the domestic agreement under the Widespread Asset Unbundling (WAU) Agreement.
"This is not a subsidy but a one-off contractual obligation. We are using the funds to restructure the business as this has become necessary as a consequence of terminating the agreement," he said.
Source: BERNAMA
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