PETALING JAYA: Just a week after inking a code-sharing agreement with South African Airways (SAA) for greater connectivity to the African continent, Malaysia Airlines (MAS) yesterday added Italy’s Alitalia as its latest code-share partner in a bid to strengthen its network access across Europe.
But still pending are code-share arrangements in India and China. Talks are under way and MAS managing director Idris Jala expects agreements to be sealed before the year-end “barring any unforeseen circumstances”.
Having code-share accords in China and India would complete the hub-and-spoke model that the MAS had embarked on as part of its business turnaround plan.
“The airline business is like a tribe; if you do not belong to the tribe and run it solo, you cannot succeed in this highly competitive environment of connectivity,” Jala told reporters after the agreement signing between MAS and Alitalia.
Code-share is the route that MAS is taking to expand and strengthen its network, given that it is not a member of any alliance. Such an arrangement allows airlines to pool their resources in passenger flights, accessing new markets, reducing costs and increasing revenues. The hub-and-spoke model is a shift from the previous point-to-point network.
Jala said with code-share arrangements in India and China, MAS’ network would cover “most of the points on the map” and that the airline would achieve continental reach. The national carrier is said to be talking to China Southern Airlines and Jet Airways, among other carriers, for code-share arrangements in China and India respectively.
On the latest deal, Jala said typically, airlines saw a 5% increase in passenger volume in having collective routes via code-share.
But Alitalia director of network arrangements Aureliano Cicala was more bullish, estimating volumes to increase between 8% and 10%, based on the Italian carrier’s experience.
“We are happy to be the choice partner for MAS and we believe we can add value,” Cicala said. MAS commercial director Datuk Rashid Khan said the business between Italy, South-East Asia and Australia was worth US$650mil annually.
“With this agreement, we hope both airlines would be able to garner strong market share because of our brands. We (MAS and Alitalia) are now getting 9% market share and it would grow beyond that,” Rashid said.
With the latest inclusion, MAS now offers access to Milan, Frankfurt, Athens, Madrid, Barcelona, Geneva and Rome. Apart from Rome, the carrier's other hubs in Europe are London, Paris, Zurich, Frankfurt, Amsterdam and Stockholm.
Source : STAR
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