Tuesday, May 06, 2008

MAS profits via new scheme

y offering limited zero-fare seats for domestic flights, Malaysia Airlines (MAS) is actually making money for seats that would have otherwise been unsold.

MAS managing director/chief executive officer Datuk Seri Idris Jala said that on average, domestic MAS flights were only 70% full.

“So the remaining 30% we would not have been sold anyway. By offering zero-fare for these seats, it’s actually giving us some incremental revenue through the YSQ charges (fuel surcharge, administrative fee and airport tax).

“It’s profitable in the sense that rather than letting them go empty, we have some revenue for it. But if we were to sell the entire plane seats at that rate, then of course we rugi (suffer losses),” he told the press after launching the zero fare for domestic destinations here yesterday.

It was reported yesterday that such tickets could only be obtained through the MAS website www.malaysiaairlines.com and passengers had to make bookings at least a month before the travel period.

For domestic offer, the total charge for travel between the peninsula and Sabah and Sarawak is RM122.40.

For domestic travel without crossing the South China Sea, the charge will be RM81.45.

He added that this would only be implemented on lean flights and not for peak-period flights.

“It’s part of managing the inventory. If you give an open period, it’s not the best practice for managing it.

“We’re starting with zero fare in controlled seats, but if there is over-subscription, then we will put in a nominal fare. We will take stock of this, and then examine it on a flight-by-flight basis, then we will open the inventory for subsequent bookings in future.”

He said the cost for running their latest product was “very negligible”, as it only involved serving food, drinks and fuel cost for carrying additional passengers.

MAS has 1.3 million zero-fare seats up for grabs from now until the end of the year, but the booking period is only until May 19.

Asked if MAS would honour the bookings made even if fuel prices shot up, Jala replied: “Whatever we sell the passengers, we’ll honour.”

Asked if this was a measure taken to compete with low-cost carrier, AirAsia, he said:

“AirAsia has always said that they have created new demands from low fares and I entirely agree with them.

“When we come out to do this, we are also creating new demand.”

Plans to extend such fares for the Asean routes will be announced later this month, but Jala said there was currently no need to include long-haul flights as “loads to Australia, New Zealand and Europe were very good”.

Source : STAR
[tags : ]

No comments:




Related Posts with Thumbnails