Demand for business-class seats on Malaysia Airlines planes has surged.
Demand for business-class seats on Malaysia Airlines planes has surged.
Malaysia Airlines says fares are on the way down after spiking during the past 18 months.
Giles Gilbert, regional manager for Australia, NZ and the southwest Pacific, said after the summer peak, fares on the carrier would continue falling from highs this year.
It was already happening.
“Airfares are startingto come down, probably a bit more than 10 per cent. We’re also seeing more carriers come in here.”
Before the pandemic, Malaysia Airlines offered a good way of getting to London: a full-service carrier whose fares were cheaper than its competitors.
Gilbert said just before Covid-19 hit, it was a “bloodbath” for airlines, with return economy fares between Auckland and London about $1800-$1900.
The lowest fares now were about $2200 on Malaysia, the first airline to restore all its pre-Covid capacity into New Zealand. It is operating eight flights a week using a 290-seat Airbus A330-200.
“In high season, there’s probably not that much difference to pre-Covid because we’ve not increased the base fare. It’s just that we’re not selling so many of the lower booking classes.”
The latest figures from Flight Centre’s FCM corporate travel arm show in the first two months of the year, international business-class airfares were up 24 per cent compared to the same period in 2019, and economy fares were up 11 per cent. Gilbert said that in February-March next year, fares would “really ease up” but wouldn’t get back to 2019 levels.
The airline is about to change its aircraft to an A330-300 with more business-class seats, and from later next year, New Zealand is in line to be one of the first markets to get new A330-neos on the Auckland-Kuala Lumpur route. The aircraft will have state-of-the-art new cabin product.
“They should already be here, but there are manufacturing delays at the moment and they’re scheduled for delivery around September next year,” he said.
This year, Malaysia Airlines’ parent company Malaysia Aviation Group reported one of its best quarterly performances in the past two decades, attributed to robust demand, higher yields and effective cost management.
Gilbert said aside from quitting six Airbus A380s during the pandemic, the airline had not mothballed any aircraft so was able to restore capacity as quickly as border restrictions allowed.
Its widebody fleet comprises six A350-900s, 15 A330-300s and six A330-200s. It also has 20 A330-Neos and two A350-900s on order.
It flies to 44 international destinations in 22 countries and 16 places in Malaysia, also with its Firefly and MASwings domestic and regional airlines.
“Demand from New Zealand has been much stronger throughout the year than it was prior to Covid, but the inbound demand has been less. There’s still hesitancy within Asia to travel long-haul.”
The airline wasn’t yet seeing many European backpackers heading to New Zealand, but that market was gradually recovering.
“But certainly, the inbound tourism has not been as strong as it was pre-Covid. We’ve been lucky in that the outbound has been particularly strong. It’s made the on board mix very much more Kiwi than it was.”
Giles Gilbert, regional manager for Australia, NZ and the southwest Pacific. Photo / Grant Bradley
India, Kuala Lumpur and London were the main destinations for travellers from New Zealand.
Another trend was leisure travellers’ readiness to upgrade to business class. “That is perhaps a bit of a surprise. People are making that decision because they haven’t flown for four or five years - they say, ‘I’m gonna really enjoy this trip this time’. They are prepared to spend that [much] more.”
Malaysia Airlines faces competition from AirAsia X, which operates an A330 to Kuala Lumpur from Auckland via Sydney daily, and newcomer Batik Air, which flies via Perth six days a week.
Gilbert said the two competitors had different offerings to Malaysia Airlines’ proposition.
He said in Australia, more competition had lifted total passenger numbers for all airlines. “We’ll keep an eye on them, but we’re not too concerned.”
Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.
