Ailing Malaysia Airline to launch new regional carrier

Loss-making Malaysia Airlines or MAS announced on Wednesday that it would launch a new regional airline, spin off ancillary businesses and trim unprofitable routes to help the airline return to the black by 2013. The ailing flag carrier posted a net loss of 1.247 billion ringgit (329.32 million U.S. dollars) in the first nine months of the year and expected a bleak fourth quarter. "We are very deep in crisis... and we do not see any improvement," MAS group CEO Ahmad Jauhari Yahya told reporters when unveiling the airline's new strategy. "Our plan now is to set the course," he said. The airline would suspend flights to Cape Town, Johannesburg, Buenos Aires and other loss-making routes and launch a regional premium airline to target Southeast Asia, South Asia and greater China by mid-next year. It will spin off its cargo, aerospace engineering, ground services and pilot training and safety academy. The carrier needs about 12 billion ringgit (3.77 billion U.S. dollars) over the next two years for aircraft purchases and is looking at debt and leasing options. Ahmad Jauhari said the airline is bracing challenges from increased competition from low cost and full service carriers, overcapacity in the Asian aviation industry and high fuel cost.