Thursday March 28, 2013

Timely for British Airways and Qantas to return to KLIA


Comeback of 3 legacy carriers to KLIA may trigger the 2 airlines to fly into KL

PETALING JAYA: Three legacy carriers are making a comeback to the KL International Airport (KLIA) over the next two months with one returning after three decades to tap into the pent up demand for air services.

And their comeback could also trigger the return of two more airlines - British Airways (BA) and Qantas.

The three legacy carriers are Air France, which is returning after 30 years, Turkish Airlines and Philippines Airlines (PAL), both coming back after a 10-year absence.

Those in the know claimed that BA officials were in Kuala Lumpur recently to check out the facilities and were in talks with Malaysia Airports Holdings Bhd (MAHB) officials.

What transpired was not clear, but they said that BA had been exploring, and they did not discount a return sooner, if not, by 2015.

“It could be this or next year, if not 2015. It is waiting for some of its existing arrangements with other airlines to lapse before flying into KLIA,” said a source.

Both BA and Qantas pulled out of KLIA in 2000.

The growth in Asean is forcing most of these legacy carriers to re-look at their Asian strategy as some markets are registering double-digit passenger traffic growth.

A lot of pent up demand in Malaysia is being served as airlines put in more capacity, so the return now would make more sense than previously as the justification that transit traffic is necessary is more evident now than previously, said the source.

Last year, KLIA handed 39.9 million passengers and this year the numbers are expected to reach nearly 45 million. In total, the airport company which manages 39 airports handled 67.2 million passengers last year compared with Changi's 52.1 million.

Asia-Pacific airlines saw a 5.2% growth rate last year even though in some markets the growth was in double digit.

BA's once deep partner Qantas is now a competitor, aligned with Emirates, and the Australian authorities yesterday gave their nod to the alliance. Qantas is also establishing a Jetstar franchise on Cathay Pacific's home turf in Hong Kong.

According to CAPA Centre for Aviation, BA and Cathay are united by a common enemy not the first occasion this reasoning has spawned an alliance but also other factors. BA has lost its Australian network access and Cathay fits in; meanwhile Cathay will be receptive to feed to sustain its positioning after China Southern and Singapore Airlines made large capacity increases in Australia.

Alliances are evolving, and this partnership will surely change or go extinct as BA becomes more familiar with new oneworld members Malaysia Airlines (MAS) and Qatar Airways, with whom it will have more in common than it does with Cathay, CAPA added.

Qantas on its own, with the marriage with Emirates, has changed its timings for its Asian flights since it no longer needs to time them with the BA arrivals, but the latter will continue to fly into Singapore and onto Sydney.

Air France saw the demand for air travel growing, hence its return to Malaysia. The KL-Paris route is currently only served by MAS and 90% of the passengers travelling on the flights are not Asians and that is a factor that perhaps had excited Air France to return. It will begin plying the route on April 23. This will be followed by the Turkish Airlines flight from Istanbul to KL on April 25.

Turkish Airways is already saying it hopes for load on the route will average 80% with its three weekly flights and currently the only direct connectivity is served by MAS.

From June 17, Turkish Airlines will add an additional flight to make it four weekly flights. PAL will start with four weekly flights to KLIA from May 1.

Currently, some 56 airlines fly into KLIA, Malaysia's main gateway and before the year is out there would be more than 60 going by the number of airlines that have plans to fly into KLIA.

India's Spicejet and Indigo are also keen, and Jet Airways which pulled out less than a year ago, may also return. The main routes - New Delhi and Mumbai - are currently only served by MAS.

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