Press Room

Malaysia Airlines Posts RM226 million Net Profit, Operating Profit Up At RM137 Million For 4Q10

Subang, 25 February 2011 : Malaysia Airlines posts RM226 million net profit, operating profit up at RM137 million for 4Q10 Subang (25 February 2011): Malaysia Airlines (MAS) reported a RM226 million net profit for 4Q10 with an operating profit of RM137 million, a RM108 million improvement from 4Q09.

There was sustained recovery with unit revenue per ASK (RASK) moving up by 6% to 18.8 sen, with a yield improvement of 5%. Traffic was up by 10% outperforming the International Air Transport Association (IATA) forecast of 8.9% growth. Seat factor also moved up at 77.4% in 4Q10 compared to 76.5% in 4Q09. Despite a 9% capacity increase, non-fuel unit cost (cost per ASK) dropped 7% to 17.5 sen.

On a full year basis, MAS reported a net profit of RM234 million with an operating profit of RM264 million. The operating profit swing of RM879 million from FY09 reflects a healthy recovery in load factors and yields.

MASkargo remained profitable for the fifth consecutive quarter with yields higher by 13% to 81.9 sen on a full year basis and overall load up 4.3 pts to 74.6%. Managing Director/ Chief Executive Officer, Tengku Dato’ Sri Azmil Zahruddin said, “We were able to see a strong rebound in 2010 due to added capacity through increased frequencies, new destinations and stronger international revenue from higher seat factor and yield.

“At the same time, we have acquired new aircraft and introduced our Eastern hub in Kota Kinabalu, offering a better product and greater connectivity to customers. We also have strengthened our balance sheet through the completion of our rights issue, with proceeds going towards the funding of our fleet renewal. This gives us a strong platform for sustained growth as we transform from a 100% leased fleet to owning at least a third of our own aircraft,” he said.

In the last quarter of the financial year, Malaysia Airlines took delivery of three new Boeing 737-800s while Firefly acquired three additional ATR 72-500s.

Azmil said, “We have put in solid building blocks and are positioning ourselves to capitalise on the action in our backyard, with Asia-Pacific demonstrating strong growth.”

According to IATA, Asia Pacific’s international passenger demand is expected to grow 7.6%. By 2014, China, Japan and Hong Kong will be the biggest international passenger markets in the region, with China being the largest international and domestic market in Asia. The fastest growing markets for international passenger traffic will be China (10.8%), the United Arab Emirates (10.2%), Vietnam (10.2%), Malaysia (10.1%) and Sri Lanka (9.5%).

Moving forward, Malaysia Airlines intends to stay competitive and is committed to provide customers with a seamless journey.

“We realize that the customer is at the centre of everything we do. As such, our focus moving forward is on truly providing a better flying experience to our customers while maintaining a strong presence in Asia, Europe, Australia and the Middle East.

“There is more room for improvement in the front end business. We need to grow this part of the business. We will receive more new aircraft with the Airbus 330-300 coming in April.

“This year will also be a year of technology advances, with the launch of the next phase of the Passenger Services System (PSS) journey where we will see the introduction and upgrade of our core systems. We are also acquiring a new Revenue Management System which will allow us to better manage our revenue and pricing,” he added. However Azmil cautioned that while the carrier was doing the right things, there are still challenges ahead.

“Fuel cost will remain a major expense. The price of jet fuel is currently at US$120 per barrel. It is difficult to predict how the price will behave over the course of the year. At this point, we have restructured our hedge levels to 25% of fuel requirements at US$88/ bbl WTI for 2011, in line with our peers,” he said.

“In addition, the economy in Europe and North America are still weak while the unrest in the Middle East will fuel a steep rise in fuel prices. Competition is also expected to intensify. In a challenging and unpredictable industry such as this, we are vulnerable to many things beyond our control which can quickly have an impact on the business,” he said.

Azmil concluded, “Over the next few years, we will be growing our network. With the new aircraft coming into the system, especially with the A380 in 2012, we expect to see more capacity increases as well.

“By continuously developing new products and services, investing in innovation technology while pushing the boundaries of service quality, we are confident we will achieve our goal of profitable growth.”


For media enquiries, please contact:

Su Wong
Email  : suwong@malaysiaairlines.com
Phone : (03) 7840 4485
Mobile : (017) 237 9355

Aizzura Ab Rahim
Email  : aizzura@malaysiaairlines.com
Phone : Tel: (03) 7840 4523
Mobile : (012) 340 8594