Malaysia Airlines' chief commercial officer Dersenish Aresandiran.
Credit: Special Arrangement
Kuala Lumpur-based Malaysia Airlines, is set to increase its India network from six to nine cities, adding Thiruvananthapuram, Amritsar and Ahmedabad during the winter season. The airline has reached over 90 per cent of pre-pandemic capacity in India, chief commercial officer Dersenish Aresandiran told DH’s Lavpreet Kaur in an exclusive interview as he threw light on the airline’s strategy for India, its global expansion plans, demand trends and outlook for the burgeoning travel market.
Edited excerpts.
What does your current network look like? What are your most robust routes globally?
As a member of the oneworld alliance, Malaysia Airlines boasts an extensive network that encompasses more than 900 destinations across 170 territories. Travel demand has been very encouraging, with our passenger traffic up 90 per cent year to date compared to pre-Covid levels. Most of the routes we operate in are recording a steady increase in load factor performance and strong forward booking. Our network recovery continues to be led by the domestic market, with long-haul destinations such as Australia and India also recording healthy load factors.
We will gradually add capacity in 2023 as demand recovers and are looking to increase the group’s capacity to 92 per cent in 2023 with full recovery expected in 2024.
What is your outlook for the airline market and the travel market in general?
Encouragingly, the demand for travel appears robust, both on the domestic and international front. We foresee a stronger rebound in international travel for 2023 compared to 2022, especially since China eased its border measures. Even as consumer sentiment is upbeat, the highly volatile economic and geopolitical environment presents several risks for the travel industry. Notably, there has been an increase in average fares globally due to factors such as pent-up demand, restricted capacities and impact from fuel and forex. We continue to proactively manage our capacity and operations to mitigate unprofitable routes due to rising fuel costs and market conditions.
How important is India to your business? Tell us about your plans for Indian market.
Being the third-largest aviation market globally and one of the fastest growing ones, India assures us of multiple opportunities for growth and expansion. Favourable factors such as a rapidly growing population and increased spending capacity are expected to stimulate travel demand, both domestically and internationally. For Malaysia Airlines, India has already emerged as our top international market. We have already achieved over 90% of our pre-pandemic capacity in India, operating 57 weekly flights to six destinations, comprising New Delhi, Mumbai, Bengaluru, Chennai, Hyderabad, and Kochi. We are looking at returning to pre-pandemic levels by the end of this year. Our direct services to Amritsar, Trivandrum and Ahmedabad beginning November 2023 will further help us cross our pre-pandemic levels in the country. This will also mark the first time that we will be launching three new Indian routes in the span of one month.
What are the key reasons for the launch of these specific routes?
One of the primary considerations which dictates the launch of any new route is often the demand. In that respect, Amritsar, Ahmedabad, and Trivandrum are major commercial and cultural centres in their respective states. Therefore, we foresee a healthy demand from these cities and believe that they will be profitable, just like our other operational Indian routes.
Competitive positioning is another prominent factor that has a bearing on the launch of a new route. For Amritsar and Trivandrum, we hold the distinction of being the first full-service premium carrier to offer flights to South Asia and the Pacific. Some of the other factors that influence our decision-making while launching new routes are strategic importance and the anticipated financial viability of the route.
We learned you're also offering special fares for the launch of new Indian routes. What more do you have to offer with these new launches?
Alongside the launch of our new India routes, we have also expanded our offerings by introducing MHsports and MHcruise. MHsports caters to sports enthusiasts, providing unbeatable rewards for groups of five or more. MHcruise, specifically designed for cruise agents and companies, offers discounted fares and flexibility for travellers. These tailored options ensure a hassle-free travel experience, meeting diverse needs and budgets.
Give us an estimate of the load factor and revenue share from the Indian market
The travel demand from India has been strong, with average load factor at 81%, prompting us to enhance our connectivity and increase frequencies to the country.
Do you currently have codeshare agreements with any of the Indian airlines? Are exploring more such partnerships to expand your connectivity into India?
We have established interline partnerships with Air India and Vistara. These partnerships allow us to offer seamless travel options through connecting flights operated by both airlines. We will continue to adopt a balanced approach with respect to partnerships, especially eyeing partnerships with carriers within, but not limited to the OneWorld Alliance.
What are the challenges you find in expanding your presence in India?
We have been deploying our fleet and network expansion opportunistically during peak periods to service high-demand/capacity sectors and continue to closely monitor the level of capacity coming into the market as all airlines rush to ramp up operations. The challenge is to work towards the right level of supply of seats versus the level of demand that is expected to exist in the market. Too much supply and we are likely to see a price war which is unhealthy and unsustainable.
Take us through some latest travel trends both for the global and the Indian markets.
Much like other industries, sustainability has become a catchword in the space of travel. In 2023, travel trends have shifted from 'revenge travel' to eco-conscious choices, as consumers prioritise environmental impact. Furthermore, ‘set jetting’, where travellers visit the exact locations they see in a film or TV series, has also emerged as a phenomenon. This trend has given a spike to tourism in destinations such as Paris, New York, and Greece. We also anticipate that the trend of experiential travel will continue throughout the year, with travellers wanting to splurge on offbeat locations rather than popular tourist destinations.
While most of the above-mentioned trends emerged on a global scale, they have now penetrated the Indian market as well. Additionally, religious tourism is particularly strong within India, and it will continue to be one of the major growth drivers for the sector moving forward as well. In terms of travel destinations, Indians are preferring short-haul travel destinations such as Malaysia, Indonesia, Thailand and Singapore. We also see a lot of demand for Australia, Indonesia and other Asia Pacific destinations on our network from India and hence added more frequencies to Australia. We are steadfast in making Kuala Lumpur the preferred gateway to Asia and beyond.
Tell us about your expansion plans for the global market.
With increasing demands, the airline will also enhance its frequencies to build dominance in other key markets including Australia, China, and ASEAN. Beginning from October 2023 onwards, flights from KUL to Guangzhou will be increased from five to seven flights weekly; Beijing from three to seven flights weekly; Shanghai from nine to 10 flights weekly; Hong Kong from 11 to 14 flights weekly; Bangkok from 34 to 42 flights weekly; Ho Chi Minh City from 15 to 19 flights weekly; Melbourne from 14 to 15 flights weekly, and Sydney from 14 to 16 flights weekly, providing travellers with more travel flexibility and choices.
In addition, new flights to Kertajati in Indonesia will begin from October 30 2023, allowing travellers to seamlessly explore Bandung and more of West Java with ease. This will bring the airline’s direct connectivity to the country to seven cities including Jakarta, Denpasar, Medan, Yogyakarta, Pekanbaru and Surabaya.