Kuala Lumpur-headquartered Malaysian Airlines is still bullish on India despite the weakening Indian economy and will continue to seek growth opportunities here.
It expects to get traction from people travelling to India across its wide global network making this country a very relevant market for the airline.
"India's performance has been awesome," said Duncan Bureau, Senior Vice President, Global Sales and Distribution, Malaysian Airlines, on Thursday. He added that while the current
downturn in the Indian economy was being watched carefully, it had not made any difference to the airline's view that the Indian market was one of strategic importance.
Malaysian Airlines posted a profit of RM8 million (Malaysian Ringgit or Rs 16.34 crore) for the second quarter ending June 30 as against an operating loss of RM102 million for the corresponding quarter last year. This is its fourth consecutive quarter of operational profit. The number of passengers on its network has risen by 24 per cent.
It has seen a revenue growth of 23 per cent in the India market.
"Global markets are fluctuating all the time. When we deploy an aircraft as an asset we need to decide if the market size and its strategic importance justify the deployment or not. Currently Indian might not look attractive for an outbound traveller (with rupee deprecation having pushed up travel costs) but we still see it attractive for those who want to fly in from Australia, Indonesia and Malaysia," Bureau added.
The airline will add a new destination, Kochi, to its list in September. This is aligned with its strategy to strengthen its position in the southern market.
Malaysian Airlines already connects Delhi, Mumbai, Hyderabad, Chennai and Bangalore with Kuala Lumpur. In July, it increased its frequency on the Mumbai route in response to growing demand and started a daytime service.
In Malaysia, Malaysian Airlines competes with the
aggressive low cost carrier AirAsia, which is set to launch an airline in India later this year and is awaiting regulatory clearances and intends to make South India its first hub.
"But we are
not worried about AirAsia entering this market as we are a premium carrier and compete across our global network with all international airlines," Bureau said.
Malaysian airlines has achieved a turnaround of sorts after posting dismal results with record losses of RM 2.5 bn in 2011.
The airline embarked on a turnaround plan which involved using aircraft for longer periods daily. It uses its B738s* for 12 hours a day against its previous utilisation of nine hours and its A380s up to 17 hours against 12 to 14 hours by most airlines. It also signed travel trade pacts, joined airline alliance such as 'oneworld' which opened up nearly 859 markets for the carrier as opposed to 68 markets it operated previously.
For Malaysian Airlines, the India market contributes 10 per cent of its entire revenues and is the third largest market outside its home country, after Australia and Europe.
Bureau said he is evaluating possibilities of
opening newer market in India further but refused to state when the airline will connect to more cities.
"Like any other market where we deploy an aircraft we look at opportunity and also evaluate the margins, we are looking for the right mix of markets and will not go to markets that are 100% leisure as we need a mix of both and leisure travellers to enter a market," Bureau said.
Malaysian Airlines recently deployed an upgraded product on its A330 aircraft type on the Delhi route and said it is selling a good number of its front - end seats that is allowing it to yield better.
"For India even the economy seats are selling good," he said, adding that if because of new competition in the market he has to compete on a price point with newer entrants (like AirAsia) it will be willing to do so."
But the airline is currently guarded about an equity investment in India and said the recent
deal between Abu Dhabi-based Etihad and Indian carrier Jet Airways whereby Etihad has extended the code share into an equity deal to get skin in the game is not the model it follows.
"But I have learnt one thing in this industry... never say never... so may be our position might change someday but currently we are focussed on making our airline a sustainable airline," Bureau said.
(*An earlier version of this story had incorrectly mentioned the aircraft to be A330s. It has now been corrected to B738s) 
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