Beleaguered Malaysia Airlines posts “expected” Q1 loss
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Malaysia Airlines (MAS) slumped to another loss in the first quarter of the year, as the national carrier’s considerable recent woes continued.
In a quarter marked by the disappearance of flight MH370, MAS posted a MYR443 million (US$137m) net loss, which it said was partially attributable to “negative sentiment” among passengers.
Despite this, MAS was able to increase its revenues by 8% in Q1, to MYR360 billion, driven by an 18% rise in passenger traffic (measured in revenue passenger kilometres, or RPK). But the airline said that its yields had come under “severe pressure”, falling 9% to just 22.5 sen per RPK.
“The net loss this first quarter is not unexpected,” said MAS group CEO, Ahmad Jauhari Yahya. “However, the results were made worse with the impact on air travel in general following the disappearance of MH370. The whole market has reacted by slowing down demand.
“While the search for MH370 continues… our group needs to accelerate efforts to improve its revenue stream and better manage our high costs which have increased in line with greater capacity. This need has become even more urgent for Malaysia Airlines’ future survival and sustainability in a market that is not showing any signs of letting up on competition,” he added.
MAS said that in terms of costs relating to MH370, a large proportion of the losses are covered by insurance. But the airline admitted that it needs to ramp up its efforts to “regain lost momentum and grow its share of wallet”.
This means that marketing and other activities that were put on hold after MH370 will now be resumed and increased. This will include a “greater branding and marketing push”, according to the airline.
But MAS has a lot of ground to make up. The Q1 loss compounds three consecutive full-year net losses from 2011 to 2013, totalling more than MYR4 billion.
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