Pack up: Malaysia Airlines calls it quits in Pakistan

Published: January 11, 2012
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Company decided in September to abandon the twice-weekly Dubai-Karachi-Kuala Lumpur route
. DESIGN: ESSA MALIK

Company decided in September to abandon the twice-weekly Dubai-Karachi-Kuala Lumpur route . DESIGN: ESSA MALIK

KARACHI: 

Malaysia Airlines on Monday ceased its operations from Pakistan – a decision that will affect a significant number of Pakistani students, tourists and business people who frequently travel to Malaysia and Australia through the  airline.

Malaysia Airlines has embarked on a significant route rationalisation exercise as part of its Business Plan announced in December last year, to stem its losses anticipated in 2011 and 2012. The airline is gradually cutting its operations on seven loss-making routes, including the Dubai-Karachi-Kuala Lumpur route – a significant one for Pakistani travellers to the Pacific Rim.

The airline had two weekly flights from Pakistan on the Dubai-Karachi-Kuala Lumpur route. The decision will help the other airlines operating on this route like Cathay Pacific and Thai Airways as nearly all of the Pakistani traffic of Malaysia Airlines will now be diverted to these airlines.

Malaysia Airlines is only the most recent international airline leaving Pakistan in recent years. Singapore Airlines, Lufthansa and Swiss International Air Lines have all closed down operations in Pakistan over the last few years, usually citing low revenues and profitability.

Industry officials believe that the remaining airlines on these routes will increase their fares owing to the increase in number of passengers and a reduction in competition, which will hurt Pakistani travellers most.

As for Malaysia Airlines itself, it appears to have arrived at this decision after careful deliberation, even though its announcement appears somewhat abrupt.

“The decision is not abrupt. The airline had decided to wrap up its operations in Pakistan last year in September,” Nihal Akbar, finance head of Malaysia Airlines, told The Express Tribune. “According to our information, the government of Malaysia informed the government of Pakistan about the pending closure in October last year.”

While Malaysia Airlines dominated the market for Pakistanis travelling to Malaysia, the traffic did not seem to be enough to sustain the route. Akbar estimates that about 35,000 to 40,000 Pakistanis travel to Malaysia every year. Most of these are tourists, students and business people. Pakistan International Airlines, which runs two flights a week to Kuala Lumpur, is now likely to benefit from the flow of this traffic.

Another segment of business that Malaysia Airlines used to capture, but now will not be able to, is that of people travelling between Pakistan and Australia, a large and growing market as the number of Pakistani students and immigrants in Australia expands. Most of these people now travel through Hong Kong or Dubai, which is both costlier and takes more time. Malaysia Airlines’ only real competitor for this route – Singapore Airlines – had already left Pakistan.

According to Malaysia Airlines’ website, the company’s focus area includes Southeast Asia, Greater China, North Asia and South Asia. Yet it now appears that South Asia does not seem to include Pakistan.

The company’s focus on those regions appears motivated by a burgeoning middle class and increased global and intra-regional trade. Malaysia Airlines plans to increase frequencies to key regional cities to benefit from the strong growth in regional demand.

A spokesperson for the Civil Aviation Authority (CAA) said that decision of Malaysia Airlines was purely based on economic reasons and not because they had any problems in Pakistan. “This fact is clear because they have cut down their global operations in different countries and not only in Pakistan,” he added.

Aviation industry officials say that government of Pakistan should increase its efforts to lure foreign airlines to country because of the immense economic advantages that the aviation industry offers to any economy. They say that an increase in the operations of foreign airlines will help improve hotel occupancy, tourism and other associated industries that Pakistan needs in these difficult economic times.

Published in The Express Tribune, January 11th, 2012.

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Reader Comments (34)

  • Khan Bhai
    Jan 11, 2012 - 1:42AM

    This is a testament to PIA’s competitiveness in the domestic market.Recommend

  • fahim
    Jan 11, 2012 - 1:51AM

    Some key lines in the article shows our position in the new world.. “Malaysian Airlines, Singapore Airlines, Lufthansa and Swiss International” all closed door here in last couple of years. Also “South Asia which is focus market does not seem to include Pakistan.” .. what more does anyone has to say? Another report in ET suggests that our “brotherly ummah nations” have decided NOT to give us free oil credits any more. This country seems to be spiraling down in a black hole as we keep spending 40% of our budget on useless defense.

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  • CK
    Jan 11, 2012 - 1:59AM

    Millions of Pakistanis live abroad and visit Pakistan frequently, If PIA is managed properly it can do so well and make so much money.

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  • You Said It
    Jan 11, 2012 - 2:01AM

    Pakistan should remind Malaysian Airlines of brotherly muslim relations as being part of the ummah they should not do this.

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  • Arijit Sharma
    Jan 11, 2012 - 2:29AM

    Oh another brother deserts !! What if China also deserts Pakistan ? Can happen you know.

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  • John B
    Jan 11, 2012 - 5:28AM

    Malaysian airline may have read the Arab Origin theory of Pakistan and may have decided to drop Pakistan from their SE Asia business model.

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  • Mard-e-Haq
    Jan 11, 2012 - 5:32AM

    Malaysia Airlines is a corrupt entity that needs constant bailouts from their government. It is now being bought over by Air Asia — a low cost airlines. I’d say good riddance.

    At least, PIA does its best to function despite limitations, government bureaucracy and corruption.Recommend

  • mohammed
    Jan 11, 2012 - 8:25AM

    They are also pulling out from south africa.they are making a lossRecommend

  • Muhamad Ali
    Jan 11, 2012 - 9:00AM

    Pakistani’s need to protest this injustice. If South Asia is a focus area for Malaysian Airlines, they should have the same number of flights to Pakistan as India. Else, they should pull out of India too if they are not not making enough money in South Asia. Malaysia needs to remember that we are the only Islamic nuclear power in the world.

    We should request Saudia, Gulf Air, Emirates, Ethihad, Qatar etc. to have routes via Pakistan for their flights from the gulf to Australia and South East Asia.

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  • Baynazir
    Jan 11, 2012 - 10:24AM

    PIA needs to be fixed or to be sold . Before its planes start dropping out of the clear blue sky and lots of lives are lost .Recommend

  • zezu
    Jan 11, 2012 - 10:33AM

    Oh now i get it. This decision may have links to the recent fraudulent visas ….

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  • Jack
    Jan 11, 2012 - 10:35AM

    @Muhamad Ali:
    Brilliant! Islamic socialism at its best!

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  • raza khan
    Jan 11, 2012 - 12:07PM

    @Mard-e-Haq:
    PIA is going to be an item in the museum in the coming year. Only needed the last nail in the PIA`s coffin.

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  • Mirza
    Jan 11, 2012 - 12:35PM

    @fahim:
    Spot on, very realistic thinking. The future of Pakistan looks more and more questionable. I know it is going to make many Pakistanis upset but while there are increasing number of flights (some direct) from North America to India but the most top airlines in the world are avoiding Pakistan. If it were not due to some Middle East airlines, it would be difficult to go to Pakistan from North America and other far away countries.
    Regards,
    Mirza

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  • Hafiz Shah Ali
    Jan 11, 2012 - 12:52PM

    What a pity; does any one realise that no European Airline nor a North American airlines flies into Pakistan ( BA with flight into ISL is an exception due to traffic of Kashmiris).And Pakistan is nation of 185 Million people.

    BOI wake up; forget getting FDI into Pakistan which you have failed,consider stopping flowing out of FDI from Pakistan.Recommend

  • Burner
    Jan 11, 2012 - 1:16PM

    For all those thinking, hey! Malaysia is a muslim country,why are they doing this? They are mistaken my the fact that around 90% of the business here is owned and controlled by the Chinese (malaysian)

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  • Khalid
    Jan 11, 2012 - 3:23PM

    Its obvious that they are leaving because there is something dodgy going on.

    Slowly slowly you will see a lot of big multinationals leave Pakistan until we get a good government who puts the economy on a strong footing and sorts out the law and order situation

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  • Ashvinn
    Jan 11, 2012 - 4:26PM

    Observation of Malaysian airline business focus begin south asia,I think the website is not updated. Airlines world over are not doing well, since pak economy is suffering it is kinda adding fuel to the fire.All Pakistani do know what needs to be done, we Indians hope you can pull it off and may maybe we can add organically to each others economy. In the meantime just make sure PIA is working fine on all routes used by pakistanis

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  • jimmy
    Jan 11, 2012 - 4:27PM

    @Muhamad Ali:
    lol what does being nuclear power have to do with this ? lol same flights as india.. our economy is bigger so its obvious international airlines gets bigger profits…pak is a smaller economy , with security problem , instability of the govt, terrorism, corruption etc… india also has lots of these similar problems .but atleast we are run by a govt. are better organized in comparison to u .no one in the world knows who runs pakistan= the army, ISI, Govt, or the taliban ! the way u have spoken shows how arrogant u are…..no wonder even yr other muslim countries helps us much more compared to u ppl… try being humble first then u will see other countries showing u more respect ….

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  • Ali Tanoli
    Jan 11, 2012 - 6:39PM

    Its nothing to do with pakistan its a international economy after stupit war 2003 in iraq america
    distroyed not only u,s but whole world economy. and thats a reason now american air lines fly
    ing to india and china which used to be they called dirty and third world.

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  • Jan 11, 2012 - 8:05PM

    PIA, Sri Lanka Air and Emirates already provide link to Pakistan via their respective hubs. Competing with them Sri Lanka Air is tough since they are considerably cheaper and have 10Kg more checked in luggage. Personally I really like the Malaysian Air since the planes were newer and service is better but business is business. Dragging politics into it and start subversive rumors is laughable at most if not stupid.

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  • Naseer Qureshi
    Jan 11, 2012 - 8:27PM

    “Deteriorating World ECONOMY” has everything to do with the cut back of Malaysian airlines. The airline industry, once flourishing, is facing bankruptcy all over the world. Every month we hear american and european airlines filing for bankruptcy protection chapters. Low international travel, higher unemloyment rates, very high diesel prices, low tourism, low business and investment activity, ceased banking sector, ie. all contribute equally to the downfall of airline industry. Having said that, one door closes two doors open. Downfall of one is beneficial to the other competitors. In this very high competitive world optimum executiong or even existence of all busines simultaneously is very cumbersome.

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  • Samir
    Jan 11, 2012 - 9:30PM

    Maybe we Pakistanis should wake up and stop pretending that our country is so great. The Armed Forces and corruption have left the nation in shambles. Just because the population is 185 million does not mean anything. No one is obligated to fly to Pakistan. Instead of reading the writing on the wall, we continue to deny it.

    Even Pakistani expats don’t want to fly back as frequently – everyone is trying to get their entire family out of Pakistan. Once that happens, they have no reason to go back to visit.

    Fix Pakistan please. Put the Armed Forces and ISI in their place- tell them to obey the people they represent.Recommend

  • Patrick
    Jan 11, 2012 - 10:05PM

    Malaysian airlines has 2 flights daily to Mumbai, Delhi, Chennai and Bangalore and about to add a daily flight to Hyderabad(India). That is where their ‘south Asian’ growth Market is.

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  • ismail suleman
    Jan 11, 2012 - 10:17PM

    what can u expect from the current corrupt government Malaysia airlines decision is correct they are not getting any profit from our country what can they do lets hope for the best in the future with economy starting to improve and a number of airlines resume thier operations to Pakistan. Back in 2005,2006 and 2007 we saw a great number airlines returning or resuming old operations to Pakistan as that time Pakistan was considered as an important market many airlines like singapore airlines and Lufthansa returned to Pakistan and others like KLM,British airways were also planning to return

    Its very sad to hear all this happening

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  • Giri
    Jan 11, 2012 - 10:35PM

    @Arjit,
    China will never abandon Pakistan until the nation is squeezed of all the resources or until Pakistan realises that they were a pawn in Chinese hands used against India and develops good relations with India. I read, longtime back a Chinese diplomat said that they never expected to use Pakistan for so long against India after independence.

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  • Siang
    Jan 11, 2012 - 10:45PM

    @Muhamad Ali:
    Dear Mr. Mohamad please do not be emotional and involve Pakistan’s rivalry with India with MAS’s commercial decision. MAS had been losing money serving the Pakistani route and who is going to compensate MAS for further loses? What is a nuclear power in South Asia got to do with a commercial airline?

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  • Mansoor
    Jan 12, 2012 - 2:53PM

    @Arijit Sharma: Believe in Allah and everything will be fine!

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  • asad
    Jan 12, 2012 - 4:18PM

    Comeon guys dont be so emotional .. that flight was via dubai Karachi and Kualalumpur and they have closed the route … so they have closed the route to dubai as well and also in many other countries … its just a cost cutting measure … so chill

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  • Jan 12, 2012 - 4:51PM

    @mansoor, way to go….u almost converted Arijit Sharma into our pure religion…cheers :)Recommend

  • ismail suleman
    Jan 12, 2012 - 7:34PM

    Dont worry after a 2012 hopefully a new government will come which will serve in the interests of Pakistan and our economy will start improving all airlines that are closing and have closed operations since 2008 will return lets hope for the best

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  • Ali Saleem
    Jan 12, 2012 - 10:40PM

    Another plot by the Zionists aimed at killing muslims. As intending travellers will have to travel on PIA.

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  • hitman
    Jan 13, 2012 - 10:21AM

    @ FAHIM
    Cant agree with you more on what you have said. Especially this statement.

    Yet it now appears that South Asia does not seem to include Pakistan

    And about military budget, I think its more than just 40%, its around 70%.

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  • saqib
    Jan 20, 2012 - 2:08PM

    I think this article is over exploiting the situation , several new airlines added Pakistan in thier desitinations over the past year , these include fly dubai , Nas air , Rak airways and Eritiean Airlines

    I think malaysian closed more due to financial reason than anything else , and one cant compare india with pakistan , there are millions of more people there thus far more travellers and due to other reasons pakisatanis get far less number of visas then indians or others do

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