Malaysia Airlines has shelved plans to join any airline alliance and will focus instead on seeking more bilateral pacts for landing rights, code sharing and joint marketing efforts, a report said today.

With the global aviation industry reconstructing after the Sept 11, 2001 attacks on the US, the Iraq war and the Sars epidemic, an airline alliance is no longer the flavour of the day, managing director Md Nor Yusof was quoted as saying by the New Straits Times.

The national carrier has been considering joining an alliance since 2000 which analysts said it would have allowed it to boost passenger traffic and expand its network without having to increase its fleet size.

"Joining an alliance may have been a trend a few years ago but not now," Md Nor said.

"There are new opportunities for those who can re-position themselves. This is what (Malaysia Airlines) is looking at, especially in Asia, and we are fortunate to have strong support from the government."

Online ticketing

Malaysia Airlines, which recently reported a profit for the first time since 1997 following large-scale restructuring after the government re-nationalised it in 2001, is expanding its capacity regionally, especially in China.

Md Nor said the airline planned to create an online ticket sales system to attract younger travellers.

The company has approved a budget of up to RM60 million a year to outsource its information and communication technology needs, he added.

Asked about the threat from domestic no-frills competitor AirAsia, Md Nor said the national carrier would not be distracted by its rival's marketing strategies.

Sustaining the business

The 18-month-old AirAsia has managed to get critical mass but sustaining the business is another matter, he said.

It will be interesting to see how AirAsia deals with high external costs, especially those linked to the US dollar, such as maintenance and servicing potential loans resulting from fleet expansion, he added.

AirAsia, which aims to go regional next year, last week roped in three foreign partners who will inject US$26 million to enable the profit-making carrier to buy new aircraft to expand its business. - AFP