Ascend Airways takes off in Malaysia as B2B provider: What's its route to success?

Ascend Airways Malaysia is set to take off as a B2B solutions provider in the Malaysian aviation market. Unlike other commercial aircrafts, it will be complementing and supporting airlines with their seasonal capacity needs.

In a statement to A+M, the company clarified that it will not sell flights or tickets directly to passengers, but will instead provide aircraft, crew, maintenance and insurance (ACMI) solutions to airlines and operate their flight schedules on their behalf during peak seasons to capture extra demand and maximise revenues. Currently, it has two Boeing B737-800s and four B737 MAX 8s and is in the process of applying for an Air Operator Certificate (AOC), and flight operations will commence once it obtains an Air Service Permit (ASP) from the Malaysian Aviation Commission (MAVCOM). 

Don’t miss: New B2B airlines Ascend Airways to launch in Malaysia this year 

Although Ascend Airways is not set to be a commercial airline, it enters the Malaysian market not too long after the collapse of local budget carrier MYAirline. MYAirline had abruptly halted its operations citing financial pressures just eleven months after it began flying in 2022. In April last year, CAAM revoked the airline’s licence to operate as a commercial airline, after it failed to find a new investor by its deadline in April. MYAirline’s air service licence expired on 14 November 2023. 

MYAirline’s suspension brought to light the carrier’s financial woes and news that it was unable to pay its service providers and employees’ salaries worth RM4.3 million on time. Its co-founder Allan Goh was also arrested to facilitate investigations under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Amla). 

At the end of 2023, the carrier had advised customers impacted by its suspension in the previous year, to use the chargeback process to obtain their refunds. At the time, about 125,000 passengers were awaiting refunds amounting to RM22 million for tickets they had purchased, while 900 employees were owed salaries. 

Can B2C woes impact B2B brands?

Unfortunately, yes. According to PR and communications professional Syed Mohamed Idid, who is currently general manager of strategic communications at West Coast Expressway, while Ascend Airways will not directly compete with commercial airlines for passenger flights, it still faces challenges related to public perception rooted in the issues consumers faced with MYAirline. 

He added that there is still a need for the upcoming ACMI provider to build public perception and trust. “The negative sentiment and mistrust arising from MYAirlines' collapse can affect the entire Malaysian aviation market, including B2B providers such as Ascend. Even if Ascend focuses on ACMI services, the consumer skepticism will remain and potential clients in the B2B realm may still be influenced by the public sentiment toward the airline industry as a whole.”

Syed said that Ascend will also need to acknowledge this lingering public mistrust and actively work to build credibility through its operational excellence and transparent communication campaigns.

However, the new company would have a competitive advantage with its ACMI model. “This distinct positioning can grant the brand advantages over traditional airlines in terms of establishing partnerships with other companies and governmental agencies that require reliable air services without direct competition in the passenger market,” Syed said.  

With the combination of strategic community engagement, leveraging the expertise of its seasoned leadership, and good long-term stakeholder relationships, Ascend Airway’s B2B approach will mitigate risks compared to conventional airlines, but they must actively address the broader context of mistrust in the aviation industry, said Syed.

According to Ascend Airway's Malaysian website, the ACMI provider will be led by a local director and CEO, Germal Singh Khera, who is a well-known aviation professional in the country. He was the director of aviation development within MAVCOM since its inception in 2015, until 2021. Germal had also worked for Malaysian Airlines for 34 years and also AirAsia in 2014. 

David Lim, co-founder of Avante Strategies told A+M, that if Ascend is able to provide a more cost-efficient wet leasing solution to the local airlines, it might stand a good chance in the market. Wet leasing is one of the two main leasing types in the aviation industry, which is normally used for the short-term and provides cabin crews, compared to damp leasing which omits cabin crews. These leasing options allow airlines access to aircraft without having to buy extra aircraft.
 
"Operating as a B2B player in the aviation industry presents a unique set of challenges, as the focus is on serving airlines rather than passengers. From my perspective, safety and cost are paramount considerations for airlines, making them the key factors in business operations."

Lim added "One of the primary hurdles for this company is the lack of a track record as an ACMI provider. To overcome this, they should emphasize the expertise of their engineers and leadership team when engaging potential airline clients."

He also said that a strategic approach would be to recruit seasoned industry professionals, a move they have already initiated with the appointment of Germal Singh Khera, a veteran with 30 years of experience in aviation to lead the business.

A+M has reached out to Ascend Airways Malaysia for comment. 

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