Malaysia Airlines Plans New Airline for Pilgrim Flights; Cautious on 2017 Outlook

Malaysia Airlines Berhad on Wednesday said it was finalising plans to form a new airline that will put to use its six A380 superjumbos to fly passengers undertaking the Muslim pilgrimages of Haj and Umrah.
The carrier said it was already transporting Muslim pilgrims on charter flights to Saudi Arabia and was "in a good position to cater to increased passenger demand on this route".

The Haj is a pilgrimage to Mecca in Saudi Arabia and takes place once a year, with more than one million Muslims travelling by air, while the Umrah pilgrimage, also to Mecca, can be undertaken at any time of the year.

Malaysia Airlines had previously said that it was in talks to lease its aircraft for the pilgrimages.
Malaysia's national airline has been trying to find use for its A380s -- the world's biggest jetliners -- after it failed to sell them. It has said in the past that the Airbus jets do not make economic sense at a time when it is cutting costs.

The Kuala Lumpur-based carrier has been battling to turn around its business since a disastrous 2014, which saw the disappearance of flight MH370, aviation's greatest mystery, and the shooting down of flight MH17 over eastern Ukraine.

The group expects to record a loss for the year 2016, although significantly smaller than initially expected. It remains cautious in its outlook for 2017.

"We have delivered a stronger second half of 2016 but a weak Malaysian ringgit, Brexit uncertainty and overcapacity in the Malaysian market will be the dominant features of 2017," the airline said.
Its third-quarter passenger load factor improved to 79 percent from 74 percent a year ago.

Group Chief Executive Officer Peter Bellew said while focus in the first half of 2016 was on reducing costs and improving the customer experience, the airline has pushed for revenue generation through more aggressive sales and marketing initiatives since July.
The airline recently said it would launch eight new routes to destinations in China, and add 11 new routes between the countries in early 2017. It aims to return to profitability in 2018 and list the year after.
By Liz Lee, Reuters