Malaysia Airlines' premium pivot pays off with RM766m profit in 2023

Malay Mail

2 days ago

KUALA LUMPUR, Aug 1 — Malaysia Airlines' move into the premium market, along with fleet upgrades and new strategic partnerships, has been key to its turnaround after years of financial turbulence.
According to Free Malaysia Today, Malaysia Aviation Group (MAG) group managing director Captain Izham Ismail said the airline's major shift came in 2019 when it realised it had been targeting the wrong customer segment.
'We were competing with low-cost carriers, battling in endless price (fare) wars when we have a higher cost base,' he was quoted as saying.
This then led to a fundamental repositioning of the national carrier, where it stepped back from low-cost competition to focus on being a premium airline.
Malaysia Airlines also dropped its point-to-point route model in favour of a network-flow strategy, using Kuala Lumpur International Airport (KLIA) as a central hub to connect long-haul passengers, such as those flying between Europe and Australia.
'By October and November 2019, we already saw the hockey stick (turnaround),' Izham said.
The pivot showed results: MAG posted a profit of RM766 million in 2023, marking a return to the black after restructuring efforts that began post-pandemic.
Operating profits had already re-emerged by 2022.
A major obstacle in the airline's recovery was its ageing fleet, with aircraft averaging 14 years old — well above the global norm of 11.
By late 2024, the group had to ground several planes, slashing capacity by 18 per cent. This resulted in 6,300 cancelled flights and nearly a million affected passengers.
In response, MAG committed to a comprehensive fleet renewal.
Deliveries of Airbus A330neos and Boeing 737-8s are underway, with Boeing 737-10s scheduled to arrive in phases from 2028 onwards.
So far, four of the 20 ordered Airbus A330neos have arrived, while 12 of the initial 25 Boeing 737-8s are in service.
Another 30 aircraft are expected to be delivered under a second phase beginning in 2029.
Malaysia Airlines recognised that as a mid-sized airline it needed to work with others to expand its global footprint and to date, it has entered into code-sharing agreements with over 20 airlines, giving it access to nearly 900 destinations worldwide.
'A moderate-size airline, which doesn't have too many metals (airplanes). What's the best proposition? It is partners,' said Izham.
The airline is also leaning into Malaysia's unique offerings — such as its culture, hospitality and food — to distinguish itself in the premium segment.
One such initiative is the Bonus Side Trip (BST), which lets international passengers transiting through KLIA explore a second Malaysian city at no additional cost.
'BST reflects our commitment to championing Malaysia as a preferred destination in Asia,' he said.
'By strengthening the connection between international arrivals and local tourism economies, the programme drives inclusive growth and supports businesses and communities across the country.'
MAG's turnaround has earned international plaudits, with Brand Finance ranking the national carrier the world's fastest-growing airline brand, with brand value surging 209 per cent to US$607 million in its 2025 Airlines 50 report.
It also secured top 10 rankings across several categories at the 2025 Skytrax World Airline Awards:
6th for World's Best Airport Services
8th for World's Best Cabin Crew
7th for Best Airline Staff in Asia
9th for Best Airlines in Asia
10th for Best Economy Class Seats
'This is not an overnight change, but a strategy to future-proof the airline for the next five, 10 or 15 years,' said Izham.