Malaysia Airlines is seriously considering rebranding itself in part as a result of two tragic events in the past six months – MH17 and MH370
Malaysia Airlines was already in trouble prior to the two incidents, but since then its reputation and passengers numbers have taken big hit. Shares in Malaysia Airlines have dropped 29 percent in 2014 alone. In an interview with the UK’s Sunday Telegraph the airline’s commercial director Hugh Dunleavy has said that “Our majority shareholder, the Malaysian government, has already started a process of assessing the future shape of our business and that process will now be speeded up as a result of MH17”.
These options are likely to including renaming or rebranding the airline itself, but as the Malysian carrier is very closely linked to both the aviation industry (it employs 20,000 staff) and the tourism industry in Malaysia (the airline bears the Malaysia name) it will be a tough process. The logo alone has been with the airline since 1947.
What this could mean for the Frequent Flyer?
A name change itself shouldn’t have a significant impact alone, and it remains to be seen if any rebranding would impact Malaysia Airlines Enrich program. The more likely impact is going to come from any potential investment from rival airlines such as Singapore Airlines, Thai Airways or even a gulf carrier like Etihad (recently invested in Jet Airways). They would most likely put their stamp on the Enrich program, however this could be positive as it could result in a new set of reciprocal benefits.
The most likely downside is going to be a significant route rationalization, which we have already seen in part over the last year with the withdrawal of Malaysia Airlines from the US. This could continue and further routes being scrapped meaning that it will be harder to earn and redeem miles with Malaysia Airlines. Considering that Malaysia Airlines is now a member of Oneworld the effect of the route rationalization shouldn’t be as significant as it would have been prior t their entry.
Enrich members may also see a devaluation of the program, this regularly happens when airlines or hotels try to improve profitability. We have recently seen this with Malaysia Airlines changing the expiry rules for Enrich Miles.