KUCHING: A recent Malaysia Airlines (MAS) pricing issue has highlighted the importance of better communication and well-planned pricing strategies to avoid unreasonably high one-way ticket costs.
“This situation provides an important learning opportunity for the airliner,” said aviation analyst Daniel Mihar James, who is affiliated with an investment bank here.
“They should not let the prices go up beyond a certain amount and follow AirAsia’s approach, allowing flights to sell out and avoiding similar issues.”
The spike in prices can be illustrated by the flight on April 20, from Kuala Lumpur to Tawau, which cost a staggering RM3,000 for a one-way ticket on MAS. This increase was likely due to the anticipated Raya celebration the following day.
When searching for flights on that day, only two options were available: a MAS flight with a 21-hour layover in Sandakan priced at RM3,259, and another direct flight at RM1,933.
In contrast, AirAsia opted not to significantly increase their prices, resulting in their flights selling out quickly. By April 22, AirAsia was offering tickets as low as RM754.
“Even if a flight is sold out, airlines may still allow overbooking to occur,” Daniel explained.
“This is because they can predict how many passengers may not show up for a particular flight, and overbooked passengers can fill those empty seats, allowing the flight to be full and profitable.”
Understanding airline pricing mechanisms is crucial for consumers. Last-minute bookings often result in higher prices due to yield management, which rewards early bookings with lower fares.
“People who pay high prices, such as RM1,900 for a one-way flight, are actually subsidising those who pay lower fares, such as RM100-200,” he added.
Daniel referred to the claim made by former Transport Minister Datuk Seri Dr Wee Ka Siong, who stated that the economy class ticket price from Kuala Lumpur to Tawau on April 20 was too expensive at RM3,138.
Transport Minister Anthony Loke subsequently contacted Malaysia Airlines chief executive officer (CEO), Captain Izham Ismail, to discuss the issue.
Izham revealed some inaccuracies and confirmed that all economy class tickets were sold out, with only business class tickets remaining. The ticket price mentioned was actually for a business class ticket, which cost RM2,863.40, not RM3,138.
According to Daniel, more than 80 per cent of low-cost airline tickets have been sold out one week before the Raya celebration.
He said as of April 13, AirAsia, for example, has managed to sell about 82 per cent of the 11,400 additional seats for the period from April 19 until April 22.
He said among the most sought-after routes were Kuala Lumpur – Tawau, Johor Baru – Kuching, Johor Bahru – Sibu and Kuala Lumpur – Kuching.
“However, there are still seats available for low-cost fixed-price tickets such as Kota Kinabalu to Johor Baru, Johor Baru to Kota Kinabalu, Bintulu to Kuala Lumpur, Kuching to Johor Baru, Miri to Johor Bahru, Sibu to Johor Baru and Kuala Lumpur, and Tawau to Kuala Lumpur for the same period,” he said.
At the same time, seats for special additional flights at fixed low-cost prices for flights between April 28 and May 1 are still available.
On March 7, the airline launched 124 special additional fixed low-cost flights for the Raya celebration between April 19 and May 1.
Meanwhile, the newest low-cost airline MYAirline Sdn Bhd received a positive response as between 85 and 90 per cent of its tickets for all destinations have been sold.
Daniel said Kota Baru, Tawau and Kota Kinabalu have received high demand to date.
“For now, there are still seats available but they are selling fast.
“They’re adding two more flights from Kuala Lumpur to Kota Baru from April 19 to 21. They have also doubled Kuala Lumpur to Tawau flights due to high demand,” he added.
