MAS returns to profitability in Q4

Guest Writer

Subang (22 February 2010): Malaysia Airlines returned to profitability for its fourth quarter ending 31 December 2009, posting a net profit of RM610 million, rebounding from RM300 million net loss in Q309 and an improvement over its RM46 million net profit in Q408.
 
The national carrier reported a small operating profit of RM3.8 million for the quarter under review with its traffic increasing 12%, outperforming the Association of Asia Pacific Airlines’ (AAPA) 17 member airlines’ growth of 4%.
 
The increase in traffic is attributable to aggressive domestic and global sales campaigns, competitive pricing coupled with the seasonal peak travel period. The result: the number of passengers carried in Q409 was 3.4 million, the highest since Q108, boosting the load factor to 76.5% compared to 65.3% in Q408.
 
Two other contributing factors were a RM500 million or 13% reduction in operating costs mainly due to the decrease in fuel prices and a rebound in cargo business which saw MASkargo’s revenue increasing 7% to RM414 million.
 
The balance sheet remains healthy with cash and negotiable deposits of some RM2.95 billion as at 31 December 2009.
 
On an annual basis, MAS reported a net profit of RM490 million for FY2009 compared to RM244 million net profit a year earlier. This was primarily attributed to derivative mark-to-market on fuel gains of RM1.15 billion.
 
Managing Director/ Chief Executive Officer, Tengku Dato’ Azmil Zahruddin said, “We have been resilient in the face of adversity as shown by our modest Q409 net profit. We have focused on bringing in the sales, proactively reducing capacity to cope with the fall in demand and building strategic partnerships.
 
“For 2010, we are positioning ourselves to capture the growth in light of signs of recovery. One of the ways we are doing this is through the modernization of our fleet and expanding our network - timely in the context of expected growth in the Asia Pacific region.”
 
According to the International Air Transport Association, intra-Asia Pacific travel had eclipsed the number of travelers in North America to become the world’s largest aviation market. Asia Pacific’s travelers numbered 647 million compared to the 638 million who travelled within North America. By 2013, an additional 217 million travelers are expected to take to the skies within Asia Pacific.
 
“In January, we received shareholders’ approval for a rights issue to raise an expected amount of RM2.67 billion to partially fund our future fleet growth and expansion. Proceeds will be used for our fleet renewal and working capital. This gives us a strong and sustained platform for growth as we transform from a 100% leased fleet to owning at least a third of our aircraft,” he said.

MAS’s new fleet will comprise up to 17 ATR72-500, 55 B737-800, 25 A330-300 and 6 A380s. The national carrier will start receiving its new aircraft this year, with the delivery of 3 B737-800s. By 2015, all the aircraft ordered will be in, and MAS expects to have one of the youngest, most fuel efficient and environmentally friendly fleets in Asia.
The A380 will serve key long haul destinations such as London and Sydney, the A330 medium haul markets, while the B737-800 will be used to strengthen the domestic and regional routes.
 
“To capitalize on the expected growth, we are adding frequencies to key destinations starting March this year. When our new aircraft come in, we’ll be able to progressively increase capacity. The better operating cost advantage in operating the new aircraft works in our favour,” Azmil also said.
 
Commencing 28 March 2010, MAS will be increasing frequencies to Jakarta, Bangkok, Saigon and Bangalore. There will also be additional flights to Perth, Auckland, Paris and Johannesburg. In addition, passengers flying to Brisbane will enjoy direct flights.
 
He added, “We are also evaluating the feasibility of introducing new destinations. We are in the process of assessing the route profitability, and will be able to share more details come the second half of the year.”
 
The 2010 prospects are also bright for MASkargo and the MRO business.
 
With a rebound in cargo demand in Q409 led by the Asia Pacific region, MASkargo is looking at growing capacity by more than 10% in 2010.
 
“We are developing our partnership with HNA Air Group in China, growing our freighter network and upgrading the Advanced Cargo Centre at KLIA. New initiatives are also being introduced to increase our capacity and efficiency as an airline and ground handler at KLIA,” he said.
 
In January, MAS’s JV MRO company, MAS-GMR Aerospace Engineering Company Ltd, signed a Memorandum of Understanding with Jet Airways. This is to provide exclusive heavy maintenance services to Jet’s fleet over the next 10 years with an option of another 5 years.
 
In addition, MAS has also sealed a 3-year deal to provide maintenance support to SpiceJet, India’s low cost carrier.
 
At the same time, the airline will continue to enhance its systems and infrastructure to ensure that customers enjoy a seamless journey. These include a RM480 million investment in the Passenger Services System over 10 years to enable faster service delivery, faster online purchase and new services.
 
A key service enabled by the PSS is flymas.mobi, one of the most comprehensive mobile phone functionalities available to airline passengers anywhere in the world.
 
“All this – capital raising, fleet refresh programme, continuous investment in new systems and infrastructure - position us in high gear for expansion and growth. I am looking forward to the exciting times ahead,” Azmil added.

– Ends –

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