Malaysia Airlines Reports Loss for 3Q 2011
Subang, 22 November 2011 : Despite recording a 5% higher revenue of RM3,565 million compared to RM3,400 million in the previous quarter, Malaysia Airlines yesterday evening announced a net loss of RM478 million for the third quarter of 2011 ended 30 September 2011. This was attributed to higher fuel costs and unrealized foreign exchange losses from outstanding USD borrowings. The cumulative year-to-date net loss for the Group stood at RM1,247 million.
However, operating loss for the quarter under review was RM156 million, a significant improvement from the preceding two quarters, 2Q 2011/RM412 million; 1Q 2011/RM312 milllion.
According to Malaysia Airlines Group Chief Executive Officer, Ahmad Jauhari Yahya, “Despite being a challenging quarter, Management has been quick to address the situation to stem the losses. These pro-active initiatives have helped improve our operating loss substantially.”
The Group also saw higher revenue as compared to the previous quarter due to an 11% increase in passenger revenue and surcharges. Yield performance for the third quarter saw a 6% growth to 25.5 sen from 24 sen per Revenue Passenger Kilometre (RPK) in 3Q 2010. Meanwhile, Revenue per Available Seat-Kilometre (RASK) grew 3% to 19.4 sen for the quarter under review from 18.9 sen in the previous corresponding period.
Going forward, Malaysia Airlines described the operating environment for airlines in general as continuing to be challenging for the last quarter of 2011. Apart from jet fuel prices staying high, the worsening economic situation in Europe has translated into weak forward booking profiles for its long-haul routes.
In addressing the situation, its Management is undertaking immediate counter-measures via heightened dynamic revenue management activities, and other commercial initiatives to mitigate the situation. Notwithstanding these efforts to mitigate the adverse situation, the national airline expects the fourth quarter operational results to be weaker than the current quarter.
Malaysia Airlines is reviewing all aspects of its operations and inventories. A significant network rationalization exercise is underway to withdraw structurally weak, loss-making routes, and to possibly embark on new higher yielding routes focusing on Asia. The adoption of a leaner network would accelerate the return of ageing aircraft, and improve the fuel efficiency of its fleet.
According to Malaysia Airlines, the full impact of these initiatives is expected to begin bearing fruit in 2012. No material impact is expected on the results of 2011.
These strategic initiatives will be amongst several other strategic key initiatives to be outlined in MAS’ forthcoming Business Plan, expected to be announced sometime in December 2011.
With respect to the Comprehensive Collaboration Framework between MAS, AirAsia, AirAsia X, the national airline anticipates several initiatives to be realized and announced soon in the areas of training, ground handling, Maintenance, Repair and Overhaul (‘MRO’), joint procurement, and sharing of best practices such as on fuel efficiency.
Malaysia Airlines continued to be acknowledged for its exemplary customer service by winning the ‘Asia’s Leading Airline’ and ‘Asia’s Leading Airline Lounge’ awards at the World Travel Awards (Asia & Australasia) in September this year.
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