The extensive code share agreement between Emirates and the new Malaysia Airlines will empty KLIA role of an international hub in Southeast Asia.
The latest step to Malaysia Airlines restructuring process is probably the most dramatic for Malaysia aviation. The Malaysian national carrier signed early December with Emirates a new partnership that will give their customers a seamless international network connecting Malaysia to more than 90 destinations on the Emirates network across Europe, Middle East, Africa and the Americas, exclusive frequent flyer benefits and world-class travel experiences.
Under the agreement signed by Emirates’ President Tim Clark and Malaysia CEO Christoph Mueller, Malaysia Airlines will add its code on flights of Emirates to Europe, Middle East, Africa and the Americas. In return, Emirates will add its code on flights of Malaysia Airlines to domestic routes in Malaysia, South East Asia and selective cities across the Asia Pacific region. The code-share will be implemented progressively throughout 2016 subject to regulatory approvals.
With the Emirates partnership, Malaysia Airlines’ customers will have access to 38 European, 15 Americas and 38 destinations in the Middle East and Africa and Indian Ocean, whilst Emirates’ customers will have access to Malaysia Airlines’ extensive Asia Pacific network with up to 300 daily departures in the region. The code-share agreement will officially start from February 1 2016.
According to Christoph Mueller in a media release, “the strategic partnership paves the path towards an integrated customer proposition offering for both airlines. The improved connectivity will enable MAS customers to reach up to 38 destinations in Europe on a daily and even double daily basis. This partnership gives our customers access to a dramatically expanded range of travel options. Not only will this provide Malaysians unprecedented super-connectivity to the whole world, it will also make it much easier for travellers from all corners of the globe to visit Malaysia. This is part of the national carrier’s initiative towards enhancing air connectivity with key priority markets overseas for increased tourist arrivals into Malaysia.”
MAS CEO is right to say that Malaysia is likely to gain from this seamless travel access via Dubai for some 90 markets. However, the comment of Tim Clark questions and eventually awakes doubts. “Our new code-share agreement with Malaysia Airlines will enable our passengers to experience new destinations and improved connectivity in the ever-popular Southeast Asia region, and also additional comforts such as reciprocal lounge access and priority check-in,” he declared in the official media release.
Malaysia government’s ambition was indeed for long to firmly establish Kuala Lumpur as a major hub and air gateway for ASEAN. Until now, many travellers chose KLIA as a convenient gateway to further fly not only to Malaysia but also to other Southeast Asian destinations -particularly Indonesia or Thailand-, Australia or even China. This market is likely now to wane as stop-over will be multiplied by two or three. Let’s look at a simple case: Who will be out of Europe or the Middle East fly to Kuala Lumpur and transfer on Malaysia Airlines to Sydney or Jakarta if it has to add a stop-over in Dubai? Especially as Emirates itself offers more convenient one-stop connections to both destinations?
Malaysia Airlines will only be an alternative for the Dubai/Abu Dhabi market and of course within Southeast Asia. Malaysia national carrier is then definitely reduced to a regional airline as it is only left with two destinations overseas –London and Dubai- and to Australia –Adelaide, Darwin, Melbourne, Perth and Sydney.
Emirates emerges as the big winner in this new code-share agreement. The Dubai-based carrier further consolidates its position on the “Kangaroo Route” which links Europe to Australia by emptying KLIA transfer function. It also strengthens its role of an “air service provider” into Southeast Asia directly from Dubai. Unfortunately, MAS is financially far too weak today to maintain a real competition anymore in the region until its full recovery.