Brisbane has succeeded at wooing back Malaysia Airlines with an incentive package supported under Queensland’s Attracting Aviation Investment Fund. Brisbane Airport, the Queensland Government and Tourism Queensland have been working towards regaining a nonstop link with Kuala Lumpur since Malaysia Airlines suspended the Brisbane-Kuala Lumpur route in Aug-2015.
- Malaysia airlines is resuming services to Brisbane in Jun-2018, following a nearly three-year hiatus;
- Queensland is hoping the new flight boosts visitor numbers, but Malaysia Airlines will mainly be regaining traffic lost to competitors, rather than necessarily growing the overall market;
- The local Brisbane-Kuala Lumpur market is relatively limited, forcing Malaysia Airlines to rely heavily on transit traffic.
Malaysia Airlines will resume Brisbane-Kuala Lumpur on 6-Jun-2018 with four weekly flights using 288-seat A330-300s, generating 59,904 annual one-way seats. Malaysia Airlines previously served Brisbane daily and the hope is the route will eventually again be operated on a daily basis.
Queensland announced the resumed service will deliver 60,000 additional visitors to the state per annum and generate AUD98 million in revenue for the state’s tourism industry over the next three years. However, these figures assume a 100% load factor and no shift of traffic from existing airlines.
Malaysia Airlines will likely attract local Queensland-Malaysia traffic, which is now flying on AirAsia X, Malindo and Singapore Airlines. Stimulating additional local traffic is possible, particularly with the right packages and marketing campaigns, but will likely account for a small portion of the total number of passengers carried by the new flight.
AirAsia X is cutting four of its 11 weekly Kuala Lumpur-Gold Coast flights at the beginning of Feb-2018, leaving a potential void in the Queensland-Malaysia market that Malaysia Airlines can potentially fill. Due to the AirAsia X cut, the total number of Queensland-Malaysia flights is actually not increasing. The Brisbane and Gold Coast airports caters to slightly different market segments but are only 100km apart and are both located in southern Queensland.
Brisbane-Kuala Lumpur passengers who have not been keen to travel to Gold Coast Airport and/or prefer a full-service airline have had to opt for one-stop products since Malaysia Airlines dropped Brisbane in 2015. Kuala Lumpur-based Malindo launched services to Brisbane in 2016 but with a stop in Bali. Singapore Airlines also offers quick one-stop connections in the Brisbane-Kuala Lumpur market with multiple daily options.
Malaysia Airlines also expects its new Brisbane flight will attract significant transit traffic beyond Kuala Lumpur. In announcing the resumption of Brisbane, the airline stated the Brisbane-Kuala Lumpur schedule is designed “to provide seamless connectivity” throughout Malaysia, Southeast Asia and South Asia as well as to London.
The CAPA Queensland Aviation & Corporate Travel Summit is scheduled for 15-Feb-2018 at the Belise Hotel, located on the corner of St Pauls Terrace and Brookes Street in Bowen Hills, Brisbane. To find out more or register click here.
These are all highly competitive markets from Brisbane. Several airlines benefitted when Malaysia Airlines pulled out of Brisbane in 2015. Malaysia Airlines will now essentially be able to attract back some of this traffic.
Malaysia Airlines relied mainly on transit traffic the last time it served Brisbane, particularly connections to Europe. Malaysia is a big source market for Australia but relatively small for Queensland’s tourism industry.
Malaysia Airlines this time will need to rely more on regional connections within Asia as the airline has since suspended four of its five European destinations. Capacity to London, its only remaining European destination, is also being significantly reduced over the next few months (prior to the relaunch of Brisbane) as A380s are replaced with smaller A350s.
The new service will operate as a daytime flight to Brisbane, departing Kuala Lumpur at 930am, and as an overnight flight from Brisbane, landing in Kuala Lumpur at 550am. Previously, the flight operated as a daytime flight from Brisbane and an overnight flight from Kuala Lumpur, following the typical Australia-Asia schedule. The new schedule is a bit odd for local traffic and could particularly impact local business traffic.
The new schedule works well for London, South Asia and domestic destinations within Malaysia. However, most regional international destinations in Southeast Asia do not land in Kuala Lumpur early enough to make the 930am departure to Brisbane. India, a booming market with huge potential for Queensland, will therefore be critical.