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KUALA LUMPUR : Malaysia Airlines will start cutting out unprofitable routes by the end of March as part of efforts to restructure the loss-making national carrier.
The first phase of its route rationalisation programme will start on March 26 and involve the axing of domestic destinations currently included in long-haul international flights, it said in a statement late Friday.
"This rationalisation is part of the national airline's business turnaround plan to refocus from a largely point-to-point carrier to a world-class connecting carrier with a major hub in KLIA," it said, referring to the Kuala Lumpur International Airport.
Managing director Idris Jala on February 27 floated a three-year rescue plan to revive the carrier's fortunes as it posted a 1.3 billion ringgit (US$350 million) loss for the 2005 financial year.
"Given the existing market realities, Malaysia Airlines flight operations will thus gradually shift from point-to-point network to a "hub and spoke" network, thus increasing competitiveness to connect as many core markets as possible," it said.
In the changes, twice weekly one-way flights from London to Kuala Lumpur which currently stop in either the northern Malaysian islands of Langkawi or Penang will become direct flights from the British capital.
Kuching, the capital of eastern Sarawak state, will be dropped from twice weekly one-way and return flights from Sydney and to Perth respectively, as well as thrice weekly return flights to Frankfurt.
"Malaysia Airlines will use its existing Malaysian domestic services between KLIA, Langkawi, Penang and Kuching to provide immediate connections for these realigned long haul international flights," said the carrier.
Malaysia Airlines has blamed its losses on crippling fuel prices and lower load factors but projected a return to profitability in 2007.
The turnaround plan, to cost some four billion ringgit, includes the restructuring of the carrier's loss-making domestic service to collaborate with, but also better compete against, low-cost carrier Air Asia.
Idris has asked the government for a freehand in making changes, including taking over the domestic route operations from parent company Penerbangan Malaysia.
"I believe we can fix the domestic sector to improve the profitability and as long as we are given the last say...I know we can do it," Idris was quoted Saturday as saying in the New Straits Times.
"Going forward, we would need to reduce our cost drastically to make it profitable." - AFP/ch
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