NEW SHORT HAUL PREMIUM CARRIER

Malaysia Airlines' (MAS) new short-haul premium carrier will take off by January. However, it is not likely to be named Sapphire, as indicated earlier. Instead, said a source, the Firefly brand might be retained or there would be a new brand incorporating the MAS name.

The short-haul premium airline would also compete with AirAsia because there will be route overlaps in the market segment.

It is learnt that there would be no duplication of routes between MAS' long-haul premium operations and those of the short-haul premium airline. “Sapphire is definitely out, but it's not certain if the Firefly name would be used. The entire product offering has to be changed because it would be a full-service airline that offers business class seating. It would also be a feeder service for MAS' long-haul operations. It has to have the right branding and product offering to attract both the business and leisure travellers,” said the source.

“Eventually, we are talking about a product that offers value for money. Naturally, the business model has to change,” he added.

It is learnt that the MAS board approved both the long-haul premium and short-haul premium structures yesterday, paving the way for planning and implementation.

Firefly is a community airline that operates from Subang, using turboprops. It also flies jets from the KL International Airport (KLIA) but this will cease by end-October.

MAS' transformation stems from the share swap between MAS and AirAsia's founding members, who now own 20% of MAS. As part of the change, the interior of the aircraft for the short-haul services will be changed to include business-class seats for both the turboprop and jet operations.

The turboprops will continue to fly from Subang, while the jet operations from KLIA will serve short-haul routes within a three to four-hour flying radius. Since the new airline would be premium short-haul carrier, the Firefly operating model will change and so will the service quality and branding. The cost of the change, according to the source, would be minimal because the “structure is already there”.

Still, there be may room for airfares to go up because the new short-haul airline will be a premium product. Another source said “we would like to think it is value for money”.

It is also learnt that the MAS board had approved a new organisational structure, which was proposed by new managing director Ahmad Jauhari Yahya. The source said the number of heads now reporting to Ahmad Jauhari would be reduced from 14 to eight, and with that, “we are seeing a leaner structure for better coordination”.

The board is also said to have reaffirmed MAS' entry into the oneworld alliance as it saw “more upside” to such a move than otherwise.