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Malaysia Airlines to stay ahead in lucrative business segment with new wide-body planes

 

Malaysia Airlines Bhd’s (MAB) wide-body aircraft selection will set it apart from competitors in the lucrative business class segment, said an aviation expert.

The national air carrier said that year to date as at Dec 3, the business class segment has seen a 78% booking rate.

MAB is beefing up its fleet with new Airbus A350-900s and more Airbus A330s wide-body aircraft.

“This will help the national carrier to further differentiate its service offering from the many narrowbody operators in the region,” said Francis & Low managing director Leithen Francis.

Ahead of competition, mainly from Batik Air, Malaysia Airlines has set the ball rolling with a strategy that will keep it ahead of the game in the business segment.

“Malaysia Airlines’ decision to add Airbus A350-900s and more Airbus A330s wide-body aircraft will help the national carrier to further differentiate its service offering from the many narrow-body operators in the region,” said Leithen.

Leithen said business travelers prefer wide-body aircraft because the cabin is more spacious which means the airline can install larger, more comfortable flat-bed seats, something that is very important for business travelers who want to get to their destination feeling refreshed and energised.

He said next year Malaysia Airlines will face increased competition from Batik Air, which has a full-service product offering on board its Boeing 737 narrow-body aircraft.

“Therefore, it is important for Malaysia Airlines to differentiate its in-flight service offering and stay two steps ahead of such competition by operating wide-body aircraft.

“Also, if Malaysia Airlines can achieve a high passenger load factor on the A330s and A350s, it will be more profitable than operating 737s. The 737 is a smaller aircraft, so the trip cost of operating a 737 is lower.

“But the 737-800 in a two-class configuration only seats around 160 passengers whereas Malaysia Airlines’ A330s and A350-900s seat around 285 passengers,” he said to Malay Mail.

This meant that the cost per seat per kilometer is lower than the 737-800.

If Malaysia Airlines can fill the larger capacity aircraft, it means it can actually offer a lower fare and be more profitable than the 737-800 operator.

Additionally, Malaysia Airlines told Malay Mail the fares for its business class fluctuates according to market demand.

On the other hand, Leithen said the higher trip cost of wide-body aircraft, such as the A330 and A350, meant it is crucial to achieve a high passenger load factor.

“If you have a low passenger load factor, you will lose more money on a wide-body aircraft as opposed to a narrow-body.

“For full-service carriers, such as Malaysia Airlines, wide-bodies are better. It is very hard to provide a distinct business-class service on a 737 because there is insufficient space,” he said.

This is why on a 737, the economy-class and business-class section look very similar, except that the business class passenger has more seat pitch, a slightly larger in-flight entertainment screen and a better meal service.

But on a wide-body aircraft there is a very big difference between economy-class and business-class seats.

The business-class passenger has far more space and a proper lie-flat bed.

“Business travelers will generally opt for flying on a wide-body aircraft because they know this.

“It is also important to note that while Batik Air in Malaysia currently operates 737s. It is likely to get A330s in future because Lion Group has A330s on order.

“Therefore, it is very crucial that Malaysia Airlines operates wide-body aircraft. If it operates 737s against wide-body operators, there’s a danger its loyal business travelers will switch to the wide-body operator as they value the additional space and comfort that comes with flying on a wide-body,” said Leithen.

Malaysia Airlines said there are three sections for the seat configurations that it uses for its fleet consisting four First Class, 35 Business Class, and 247 Economy Class seats.

“For the A350, yes, they will have the same seat configuration like the first one we received,” said the airline.

Kazi is the Business Editor at Malay Mail

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