Malaysia Airlines today entered into a Re-Accommodation Agreement (“RA”) with AirAsia X to re-accommodate the latter airline’s passengers on four routes cancelled using excess capacity on Malaysia Airlines flights. The four routes involve Mumbai, Delhi, London and Paris.
Economy and premium class passengers holding confirmed AirAsia X tickets issued before 13 January 2012 on the four routes would be transferred for travel on Malaysia Airlines between 28 March and 27 October 2012.
Under the terms of the RA, Malaysia Airlines would receive upfront cash payments or pre-payments on tickets for the re-accommodated passengers before departure. To date, Malaysia Airlines has received a prepayment of RM20 million in cash.
Malaysia Airlines benefits as it is able to achieve higher passenger numbers on its flights which would be incremental to its normal load patterns. Hence, the related revenue from this arrangement is pure incremental revenue for the airline and would significantly contribute to the profitability of Malaysia Airlines.
Re-accommodation of passengers is an industry practice whereby airlines support each other to minimise disruption to passenger travel arrangements. In the past, Malaysia Airlines has upon request and on an ad-hoc basis provided uplift and re-accommodation of passengers of other airlines.
These arrangements were provided with regard to excess seats available and agreed costs involved. In all cases of re-accommodation, Malaysia Airlines would charge the airline concerned for the re-accommodation. Recent reports that Malaysia Airlines may have re-accommodated AirAsia X passengers without payment or at rates unfavourable to the national airline are unfounded and untrue.
Malaysia Airlines would also like to put on record that it continues to respect and abide by all governance requirements in the execution of this transaction.