KUALA LUMPUR: Malaysia Aviation Group Bhd’s (MAG) turboprop arm, FlyFirefly Sdn Bhd (Firefly), is going through a restructuring exercise due to the weak economic environment and overcapacity at the Sultan Abdul Aziz Shah Airport in Subang.
MAG group chief executive officer (CEO) Peter Bellew told Business Times Firefly had removed six aircraft from its turboprop fleet in October and cut some unprofitable international routes, including Medan in Indonesia and Koh Samui in Thailand.
Bellew is also Malaysia Airlines Bhd (MAS) group managing director and CEO.
Currently, Firefly’s only international destination from the Sultan Abdul Aziz Shah Airport is Singapore while it serves Banda Aceh and Phuket from the Penang International Airport .
“Firefly has lost money consistently for the last four years. No staff reduction. Any excess staff absorbed into MASwings and MAS. Gross overcapacity in Subang,” said Bellew in a text message yesterday.
Meanwhile, Firefly CEO Ignatius Ong said yesterday the six ATR 72-600 aircraft were returned to lessors MAB Leasing Sdn Bhd and MAB Pesawat Sdn Bhd.
MAB Leasing and MAB Pesawat are the leasing arms of MAG.
Ong said the fleet reduction and route cuts were part of Firefly’s consolidation exercise this year.
“With both Firefly and Malindo Air’s capacity and their incessant increase in fleet size, there is just too much capacity out of Subang,” he said.
Firefly is facing tough competition from the Malaysia-Indonesia joint-venture at the Sultan Abdul Aziz Shah Airport.
Malindo Air operates 16 ATR 72-600s out of Subang and plans to increase the frequency of certain flights.
According to Centre for Aviation (CAPA), Malindo Air’s capacity at Subang will likely increase next year as the airline is looking to add another two or three turboprops to its fleet.
“Subang is a relatively small niche market that can potentially support up to 30 aircraft.
“However, that is a total maximum figure for the entire market and the reality is that Firefly now has to share the market with Malindo Air,” said CAPA in its report dated December 23.
Ong had said in August Firefly did not have any plans to add new turboprops to its fleet.
In 2013, Malaysia Airlines ordered 36 new ATR 72-600s for Firefly and MASwings. Eight were delivered to Firefly and four to MASwings.
However, both airlines had removed the ATR 72-600 from their fleet, said CAPA.