MAB Restructures LCC Arm Firefly

29th Dec 2016

As Firefly is losing ground (or is that air?) against Malindo Air, its parent company Malaysia Airlines Berhad (MAB) has decided to try and shake things up at the low-cost carrier. As a result, Firefly will fly less aircrafts as well as operate fewer flights.

When it comes to aircraft numbers, Firefly has reduced its fleet from 18 ATR 72s it had earlier in 2016, to just 12. In addition, Malaysia Airlines has reduced the LCC’s load by about 40 per cent, hoping it will help turn its subsidiary around.

Firefly currently operates out of the Subang Airport and is under heavy pressure from its biggest competitor Malindo for Subang routes. Whereas Firefly is reducing aircraft count, Malindo is increasing it. A little while ago, for example, Malindo had actually boosted its fleet with five more ATR72 turboprops to meet demand.

This is a big hit for Firefly, as the LCC was pretty much running the show for the last 10 years, ever since Malindo showed up in 2013. With this restructuring exercise, Firefly is no longer the largest carrier operating out of Subang Airport, Malindo Air now is.

Firefly also operates Kuala Lumpur to Singapore, but that route too hangs in the balance from 2018. According to the leading provider of aviation analysis, reports, intelligence and data, CAPA, as of 2018, the Singaporean civil aviation authority will be stopping turboprop flights from landing at Changi Airport. Turboprop flights will, however, be allowed to land at the new passenger terminal that is being built at Seletar Airport.

Malaysia Airlines Sells 10% Stake in Taiwan Caterer Company Evergreen Sky Catering to Singaporean SATS

Meanwhile, Malaysia Airlines Bhd has also decided to sell a 10 per cent stake it holds in the Taiwanese catering company Evergreen Sky Catering Corporation to the Singapore-based ground-handling and in-flight catering service firm SATS. Evergreen Sky Catering Corp. is a member of the Evergreen Group.

According to a Singaporean bourse filing, SATS will pay MAB a total of RM100 million (US$22.3) for the Taiwan catering company stake.

The bourse filing said:

The proposed acquisition is in line with the company’s strategy of growing the scale of its food business and enhancing its connectivity to better serve its customers across key airports in Asia.

You can download the full proposed acquisition here