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1. Launch of Firefly

During March 2007, Malaysian Airlines secured regulatory approval to launch Firefly,

Malaysia’s first community airline. Firefly is new low-cost community airline which currently

offers 14 weekly flights to Kota Bahru, Kuantan, Kuala Terengganu and Langkawi and seven

weekly flights to Phuket and Koh Samui from Penang. It is expected to become profitable by next

year end is expected to tap into a potential customer base of 100 million in the Indonesia-

Malaysia-Thailand Growth Triangle.

Firefly is also expected to capture the growing leisure travelers market in the north and east coast

of the Peninsula and South Thailand, flying from Penang to six destinations that are currently not

served by any other airline. It is also the only airline connecting three popular tourist destinations

- Penang, Koh Samui and Phuket. Apart from the opportunity to grow from a new market

segment, Firefly will also function as a test-bed for Malaysia Airlines in managing a low-cost

operation. Once it is proven successful, the group hopes to adapt Firefly’s processes into the

operations of the national carrier and expand its customer base further.

2. Physical infrastructure support

New infrastructure like the Kuala Lumpur International Airport (KLIA), the speed train

Expressway Rail Link (ERL), Light Railway Transit (LRT) and public transport were designed to

give maximum access for user to the MAS services. Besides that, the cargo facilities

infrastructure such as the international port has also helped MAS in providing an added value to

its cargo service.

3. Expanding passenger traffic in Asia Pacific

Malaysia Airline has a strong presence in Asia. The company covers several regional destinations

and various destinations in China, Japan, India and the Middle East where demand for travel is

high. The demand for air travel to the Asia Pacific is rising which is driven by increased

economic activity in emerging Asian countries such as China and India. Traffic is projected to

grow at 7% in China and India combined, above the world average of 5%. Further, the share of

Asia Pacific region in world passenger traffic (revenue passenger kilometers) is forecast to rise

from 25% in 2003 to 31% in 2023. Malaysia Airline already derives more than15% of its

revenues from the Asian region and is well positioned to benefit from increasing air travel to Asia.

4. Increasing cargo traffic

There has been a rise in cargo traffic in the South East Asian countries. The rise in demand is

driven by growth of export related industries particularly agro-based products in Southeast Asian

countries. The group has a dedicated cargo carrying subsidiary (MASkargo) and a wide global

network in place. Therefore it is well poised to benefit from increasing demand for air cargo


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