Moving into the premium market, modernising and expanding its fleet, and forming strategic partnerships with other carriers have been instrumental in helping Malaysia Airlines return to rule the skies again.
Captain Izham Ismail, group managing director at the airline’s parent company Malaysia Aviation Group (MAG), said the turning point came in 2019 when they realised that they had been targeting the wrong segment of the market.
“We were competing with low-cost carriers, battling in endless price (fare) wars when we have a higher cost base,” he told FMT in a recent interview.
It was then that the airline decided to pull itself out of the low-cost segment to sell itself as a premium airline.
To enhance its new position, the national carrier also moved away from the budget-style point-to-point routes to adopt a network flow model, using KLIA as a hub to connect passengers from opposite ends of the globe, for instance from Europe to Australia.
“By October and November 2019, we already saw the hockey stick (turnaround),” he said.
After years of losses, MAG posted a profit of RM766 million in 2023, with operating profits returning as early as 2022 following its post-pandemic restructuring.
Modernising an aging fleet
In the next part of its turnaround strategy, MAG launched a programme to renew its fleet.
One of the group’s biggest hurdles had been its aging planes. On average its aircraft were 14 years old compared to the global standard of 11 years.
It came to a point where the airline was forced to ground several planes. By late 2024, it had reduced capacity by 18%, leaving 6,300 flights cancelled, affecting nearly a million passengers.
To address this, MAG began to invest heavily in next-generation aircraft. Deliveries of Airbus A330neos and Boeing 737-8s are already under way with more aircraft, including Boeing 737-10s, due in phases through 2028 and beyond.
As of now, four of the 20 Airbus A330neos have arrived, while 12 of the initial 25 Boeing 737-8s have been delivered. Another 30 planes are expected from 2029 under phase two.
Partnerships and soft power
As a mid-size carrier, Malaysia Airlines realised it had to work with others to expand its reach. To this end, it has struck code-sharing agreements with more than 20 carriers, expanding its list of destinations to nearly 900 worldwide.
“A moderate-size airline, which doesn’t have too many metals (airplanes). What’s the best proposition? It is partners,” Izham explained.
On the ground, MAG is also tapping into Malaysia’s many attractions, such as its hospitality, cuisine, and culture to set itself apart from other airlines in the premium segment.
Izham said a notable example is the Bonus Side Trip (BST) initiative, which allows international travellers transiting at KLIA to explore a second Malaysian city at no extra 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.”
Recognition and recovery
MAG’s transformation has not gone unnoticed. Brand Finance named Malaysia Airlines the world’s fastest-growing airline brand in its 2025 Airlines 50 report, giving it a 209% jump in brand value to US$607 million.
The airline also ranks in the top 10 across several categories at the 2025 Skytrax World Airline Awards, including:
- 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,” Izham added.
