Malaysia Airlines grows its presence in China
The new chief executive officer of Malaysia Airlines, Peter Bellew, made it clear during his on-stage interview during the World Routes Strategy Summit in Chengdu, China in late September that China would become a key focus for the carrier due to the significant opportunities it would provide for profitable growth. Just over a month later, he has delivered on this promise as the Asian carrier reveals plans to serve eight new destinations and eleven new routes with 35 additional frequencies between Malaysia and China from the end of this year.
The expanded network, which includes six Chinese cities that have never been served directly by a Malaysian airline, is just the first stage of an ambitious plan to more than triple Malaysia Airlines’ China business, adding more than ten additional cities to its network by the early 2020s.
“I see potential for direct flights to 20 Chinese cities from Kuala Lumpur, Penang, Kota Kinabalu and Kuching by 2019. We have huge confidence in China. The improved connectivity will foster deeper business links between the two nations,” said Bellew.
The expanded network includes flights from Kuala Lumpur to Chengdu, Chongqing, Fuzhou, Haikou and Nanjing; from Kota Kinabalu to Tianjin; and from Penang to Shanghai and Shanzhen. These will be rolled out over the space of the coming year with the first new routes being introduced as early as December 2016. The new routes will be complement by capacity on existing routes from Kuala Lumpur to Hong Kong (capacity upgauge from 737 to A330) and Shanghai (a second daily rotation).
“I see potential for direct flights to 20 Chinese cities from Kuala Lumpur, Penang, Kota Kinabalu and Kuching by 2019. We have huge confidence in China. The improved connectivity will foster deeper business links between the two nations.”Peter Bellew
CEO, Malaysia Airlines
In addition to this initial growth, Malaysia Airlines plans to promote tourism in Malaysia and China through seasonal or ad-hoc services to key leisure markets such as Langkawi, Kuching and Kota Kinabalu.
“Malaysians relish the business opportunities and tourism experience in China. The Chinese tourist market to Malaysia is growing rapidly due to the shared food, language and cultural connections,” added Bellew.
Malaysia has seen a growth in the number of Chinese tourists over the past year, thanks, in part, to the various tourism programmes and efforts undertaken by the Tourism and Culture Ministry. Malaysia Tourism Promotion Board, Tourism Malaysia, reported Chinese tourist arrivals to the country rose four percent in 2015 and tourism receipts from the market went up to RM5,734.7 million, an increase of 16.1 percent compared to the previous year.
A relaxation in visa restrictions has seen a significant rise in applications during the first half of this year and tourism sources confirm that 2016 will easily pass the 2015 level and also exceed 2013 as the busiest year for Chinese arrivals into the country, with the latest network expansion from Malaysia Airlines growing this further in 2017.
Malaysia welcomed a total of 25.7 million tourists and RM69.1 billion in tourism receipts in 2015 with China now the third largest source market after Singapore and Indonesia. It is the largest expanding market according to data trends and the Malaysian Ministry of Tourism and Culture anticipates that the new visa provisions will see Chinese arrivals to Malaysia reach two million this year, with ambitions that the figure could be as high as five million in 2017.
Scheduled flight data from intelligence provider OAG shows that capacity between Malaysia and mainland China has almost doubled since the start of the decade growing 83.9 percent. This includes a significant 23.1 percent year-on-year rise during the current calendar year. The recent restructuring of Malaysia Airlines has meant its own capacity in this market hits a ten year low in 2016, but the expanded schedules for 2017 will help the carrier grow its share of the market from 12.6 percent (2016) to a ten-year high of 67.5 percent in 2006.