Partnership set to be expanded between MAB and Silk Way

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MAB Kargo is set to expand its partnership with Silk Way West Airlines as it looks to increase the agreement it has on services.

In March, the Malaysian Airlines cargo arm penned a memorandum of co-operation with Azerbaijan-based Silk Way West that sees both leverage on each other’s aircraft fleet and network in different regions of the world.

The strategic partnership entails a block space agreement on a twice-weekly route to and from Kuala Lumpur (KL) and Amsterdam via Baku Heydar Aliyev International Airport.

MAB Kargo chief executive officer, Ahmad Luqman Mohd Azmi explains: “Things are doing well and we are going to enhance this partnership. We are going to increase the current frequency from twice a week to three or four times a week to serve Europe and are also working closely with them to support their operations to the US into Chicago and New York JFK. That will be good as we are from Asia and need to spread our wings.”

And Luqman sees it forming more co-operations in the future: “Being a oneworld member we are going to enhance some of the relationships with other oneworld partners, maybe look at a similar relationship like we have with Silk Way West but with a different routing.

“We have three aircraft from KL, but need more lift out of KL so we will enhance some of these co-operations on freighter routes – as part of a joint cooperation.”

In the fourth quarter (Q4) of 2016, MAB Kargo expanded its presence in Thailand with the launch of an Airbus A330 Freighter service to Bangkok Suvarnbhumi International Airport from Kuala Lumpur.

This has been launched to tap into the rising demand for air cargo shipments between Bangkok and KL. The freighter stops in Bangkok via Hanoi in Vietnam before heading back to KL. Cargo is expected to be lots of machinery and agricultural products from both countries along with general cargo.

In Q4, MAB Kargo also started twice a week freighter services from KL to Guanghzou with perishables and general cargo making up much of A330F’s 60 tonne payload and also started a twice-weekly service to Chongqing, where services will mainly carry high value electronic goods.

Luqman explains: “We initially operated with two A330s, but since we operate three now, that has helped us take advantage of the current peak we are seeing across our region.

“We still remain very focused on South East Asia, China and India and that is looking good for us and we are seeing good loads in and out of China and India.

“We think things are turning around for Malaysian Airlines on the passenger side and we are more active in the marketplace.

Kualu Lumpur International Airport in Malaysia
Kualu Lumpur International Airport in Malaysia

“We are turning around and have been stabilising this year and have been growing in some secondary markets like China and India. It is looking better and we have ordered new aircraft on the passenger side and will remain with three freighters.”

Luqman is happy with the performance of its A330Fs in 2016 and says it is doing well with the capacity it has. He adds: “It is what we expected and we should meet our revenue numbers this year, but yield is still a challenge for is, but we should be breaking even this year or making some profits in 2016 and are quite bullish about this.”

The e-commerce sector is the main target market and new routes added to China should drive this objective, but with this changing and growing demand there is a need to invest in infrastructure.

Luqman says: “We are focusing firmly on e-commerce as are seeing a lot more of it transiting in KL and we need to enhance that facility to meet the demand of e-commerce and right now, we are looking at that segment.

“The problem with these type of movements is you need to screen goods individually for safety reasons so we are enhancing that part of the warehouse, but the rest will remain as it is.”

The pharma market is also on the radar for MAB Kargo as Luqman explains: “We will look into gaining and working towards IATA’s CEIV Pharma certificate or GDP sometime in 2017, but our immediate focus is on e-commerce.”

As for Malaysia as a whole, he says GDP should be up around 4-5 per cent in 2016, which is helping the carrier.

He says MAB Kargo as an all-cargo carried needs to attract regional loads to consolidate in KL and is focusing more in Malaysia on high-tech industries, adding: “The problem is they are smaller and not as heavy as laptops and handheld, which creates some load issues for carriers like us, but being quite active in China and India and South East Asia is helping us win business to KL which is good.”