The new airline’s arrival is deemed favourable for the overall market, travellers, as well as MAHB
by S BIRRUNTHA
THE year 2022 saw the launch of Malaysia’s new low-cost carrier, MYAirline Sdn Bhd, which is expected to brighten up the local aviation scene, according to analysts.
This is as the Malaysian aviation industry sees modest growth after being mired in the Covid-19 pandemic for more than two years.
The new airline’s arrival is deemed favourable for the overall market, travellers, as well as airport operator, the Malaysia Airports Holdings Bhd (MAHB).
Aviation consultancy Endau Analytics founder and analyst Shukor Yusof said competition is always a positive thing in any business, including the airline industry.
He noted that it gives more options to consumers to choose in terms of ticket fares, services, number of stops and duration of travel.
“We have seen airlines come and go in the past, so the strongest will survive,” he told The Malaysian Reserve (TMR).
Commenting on whether it will be an easy start for MYAirline, Shukor opined that it is not difficult to start an airline but very tough to sustain one.
“As long as MYAirline has money, it can continue to fly,” he added.
Nevertheless, Shukor said MYAirline is run by some executives who have experience working for low-cost carriers in the past.
“Therefore, the management will no doubt have ideas on how to beat the competition,” he noted.
Meanwhile, Putra Business School Assoc Prof Dr Ahmed Razman Abdul Latiff said whenever a new competitor joins the budget airline market, it will always be welcomed by the customers as it will create more flight options as well as competitive pricing.
He hoped that MYAirline’s entry would help to further accelerate the recovery of aviation, travelling and hospitality sectors, especially at domestic level.
“Of course, it is not going to be easy for MYAirline due to the strengthening of the US dollar and that oil prices remain high.
“However, with proper hedging and by focusing more on increasing domestic passenger load, MYAirline can remain competitive and sustainable, but it will not be an easy road for them,” he told TMR.
Differentiating from Others
Ahmed Razman highlighted that MYAirline is currently in the business of price differentiation where it is offering competitive pricing to the customers.
He said to stand out, MYAirline should differentiate its service by offering more value-added, especially by being customer-centric, which means offering the right kind of service that is demanded by the customers.
“Listening to and acting on customers’ concerns should also remain a top priority for them,” he noted.
Meanwhile, Maybank Investment Bank Bhd (Maybank IB) remains positive on Malaysia’s aviation sector as MYAirline took to the air on Dec 1 this year.
The investment bank said MYAirline is expected to have a moderate positive impact on MAHB and a slight negative impact on Capital A Bhd.
“Although we believe that history is repeating itself with the new airline, Maybank IB believes that there are some very important differences in 2013 when another Malaysian airline, Malindo Airways Sdn Bhd, started its maiden operation.
“Industry capacity growth in the future will be more moderate this time even with the entry of MYAirline in the Malaysian aviation sector.
“Therefore, the positive or negative impact on MAHB and Capital A should be more moderate at this time as well,” Maybank IB said in a recent research note.
According to the investment bank, although MYAirline did not share any financial data, it did state that it does not expect to be profitable in the next two years. However, it hopes to break even before five years.
The Establishment of MYAirline
MYAirline was born out of a discussion that took place in late 2020 between an airline industry veteran, Rayner Teo Kheng Hock and a Malaysian entrepreneur, Datuk Goh Hwan Hua.
It is 88%-owned by Zillion Wealth Bhd, Trillion Cove Holdings Bhd (10%) and Teo (2%), who is also MYAirline CEO.
Goh is a shareholder of both Zillion Wealth and Trillion Cove, and he maintains a 98% stake in MYAirline.
MYAirline established its headquarters in Subang Jaya, Selangor.
The airline introduced a red colour scheme with grey stripes progressing towards the aircraft’s front fuselage, while its logo is painted on the vertical stabiliser.
Meanwhile, MYAirline was granted its initial Air Service Licence from the Malaysian Aviation Commission on Nov 15.
The Air Operator Certificate was awarded by the Civil Aviation Authority of Malaysia on Oct 1.
MYAirline currently utilises an all-Airbus A320 fleet. The carrier maintains that the usage of a single-type of narrow-body aircraft is suitable to accommodate its low-cost airline module.
Within the next five years, the airline aims to incorporate 50 aircrafts in its network.
Born during the height of Covid-19 pandemic, MYAirline had created employment in the aviation industry, building a new aviation ecosystem in Malaysia.
The low-cost carrier is currently home to more than 370 employees, targeting to reach 500 employees by the end of this year.
Spreading Its Wings on Dec 1
On Nov 25, MYAirline announced its first three routes from Kuala Lumpur (KL) to Langkawi, Kedah; Kuching, Sarawak; and Kota Kinabalu, Sabah, with open-for-sale airfares.
MYAirline’s inaugural flights officially touched down at three destinations in Malaysia on Dec 1, arriving in Kuching, Kota Kinabalu and Langkawi from KL.
In a statement, Teo said the flight to Kota Kinabalu recorded a load factor of over 80%, showing encouraging demand for travel.
He shared his excitement that the airline has touched down in Kuching, Kota Kinabalu and Langkawi, and cemented its official presence as an airline.
He added that MYAirline believes that its entry into these destinations will help boost tourism in Malaysia and accommodate increasing travel demands.
“Since our route announcements, we see encouraging response from travellers. Guests can now look to benefit from more affordable fares.
“With air travel gaining momentum this year, we look forward to increasing tourism numbers into the country via new routes and additional flight frequencies,” he said.
MYAirline is planning to expand by opening more domestic routes by the first quarter of 2023 (1Q23) from KL to Kota Baru, Kelantan; Penang; and Sibu, Sarawak.
The airline also has plans in the pipeline to fly to selected Asean destinations, connecting Malaysia to this region by 2Q23.
Additionally, Teo also noted that MYAirline tickets are selling like hotcakes as travellers are making their journeys to three destinations introduced by the airline.
He highlighted that the confidence was based on the high passenger load factor.
Committed to Sustainability Goals
At the same time, MYAirline is also committed towards achieving its sustainability goals by being the first airline in the world to be fitted with light, innovative and eco-friendly seats, according to its press statement.
Manufactured in Italy, these ergonomically-designed seats save around 800kg of weight, which translates to fuel saving.
The airline has made a significant investment in digitalisation, whereby it is the pioneer low-cost carrier in Malaysia to digitalise all relevant manuals (regulatory and non-regulatory) from day one.
MYAirline’s other green initiatives include processing recruitment documentation digitally and administering financial processes on secure cloud storage.
MYAirline is the first airline in Malaysia to design a gender-neutral uniform for cabin crew with its unique jacket and pants styled with a pair of white sneakers.
Teo said this set of attire gives a casual look whilst giving comfort for the cabin crews when on the go.
“It has been a challenging yet fulfilling two-year journey for us in MYAirline as we create this significant milestone in the Malaysian aviation industry.
“We are committed to building national pride by providing class-leading services and emphasising good customer service,” he added.
Launching New Domestic Routes
On Dec 5, MYAirline launched a new route from KL to Kota Baru, Penang and Sibu, with ticket offers as low as RM49 and RM89.
The all-in fare is as low as RM49 for the route from KL to Kota Baru and Penang, while to Sibu it starts at RM89.
Tickets were made available at www.myairline.my for bookings from Dec 5 to Dec 11, 2022, for flights from Dec 10, 2022, to March 25, 2023.
Commenting on this, Teo said the company will continue to add new destinations while expanding its domestic route network.
“Other new options for travellers include Penang and Sibu, our second destination in Sarawak.
“The feedback on our class-leading services has been positive. With more domestic routes, we continue our mission to bring more viable choices for our travellers,” he said.
Meanwhile, MYAirline recently launched two more new routes to Tawau and Miri on Dec 16, adding more destinations in Sabah and Sarawak.
The all-in fares to Miri from KL start from as low as RM89, and RM109 to Tawau.
The booking period for these fares were opened from Dec 16 to Dec 22, 2022, while the travel period for this campaign is from Jan 21, 2023, to March 25, 2023.
According to Teo, the new routes are in line with the airline’s mission to cultivate the growth of local tourism especially in East Malaysia.
“We wish to support travel movement formulations and tourists to travel to Sabah or Sarawak with affordable options — be it for work, family visits or holiday.
“With our newly launched mobile application, passengers can make their travel bookings at their own convenience,” he noted.
Recovery for Malaysia
Vibrant developments in terms of route resumption and introduction of new destinations by airlines in November and December continue to signal recovery for the aviation sector in Malaysia, according to MAHB.
During the two months, MAHB welcomed two new airlines and witnessed the resumption of four pre-pandemic route services, as well as the introduction of one new international route.
A total of 13,869 aircraft movements were recorded at KL in November, which was a 12% increase from the previous month.
MAHB said these positive developments continued into December with the introduction of Malaysia’s latest low-cost airline, MYAirline.
In regard to monthly passenger movements, Malaysian operations recorded 2.23 million international passengers in November, a 5.9% increase from the preceding month.
Domestic passenger movements recorded an 11.5% decrease at 2.93 million passengers, bringing the total passenger movements in Malaysia to 5.17 million.
- This article first appeared in The Malaysian Reserve weekly print edition