Malaysia Airlines chairman Tajudin Ramli is ruffling government feathers in his drive to make the airline fully profitable, by calling for the closure of some of Malaysia's domestic airports.
The airline's domestic operations, which account for about a third of its revenue, have been a drain on profits. MAS has cross-subsidised loss-making local services from international profits.
Ramli, who bought a 32 per cent controlling interest in MAS from the government last year, is lobbying for the closure of several smaller airports, arguing they have become redundant following the completion of a new north-south highway running the length of Malaysia. The fast, motorway-style link makes it easier for travellers to drive between Kuala Lumpur and several provincial towns.
Ramli says the closure of the airports would allow the airline to restructure its domestic network and improve efficiency. Recently load factors have fallen significantly on some routes as travellers abandon flights in favour of their cars.
Nevertheless, government officials in Kuala Lumpur, as well as provincial authorities, have reacted strongly against the suggestion. 'Small airports are still needed to serve remote areas. Malaysia Airlines has a social responsibility to serve rural folk,' says transport minister Dr Ling Liong Sik. This is echoed by deputy finance minister Wong See Wah, who said the airline would have to provide services to remote areas 'even if it lost money on the routes'.
While Ramli's call has found favour with the media, he says the carrier will continue to fulfil its obligations to serve the country with domestic flights.
Source: Airline Business
