Wednesday, May 30, 2007

MAS posts higher profit, load factor and yield

Malaysia Airlines (MAS) reported a sustained turnaround with a net profit of RM133.1mil for its first quarter ended March 31, compared with a loss of RM319.9mil in the year-earlier quarter.

The net profit was derived from a group operating profit of RM129mil, comprising RM107mil from international operations and RM22mil from domestic services. Besides that, there was a gain of RM17.7mil from the sale of properties.

Chief executive officer Idris Jala said the improved operating results were due to a 21% increase in revenue, while expenditure, excluding domestic operations, decreased. The first-quarter results included the profit-and-loss account of domestic operations while it had not included that yet in the equivalent quarter last year.

Jala said MAS had conditionally agreed to take back rural air services in Sabah and Sarawak that were earlier transferred to Fly Asian Xpress. MAS agreed to this subject to the aircraft being returned in good condition and losses from such services could be recovered through a subsidy from the Government.

Idris Jala (left) at the MAS financial results announcement
The Government agreed with the arrangements a couple of weeks ago, he added.

On the first-quarter operating results, Jala told the media yesterday the airline's load factor improved to 71% from 68.6% in corresponding three months last year, while yield – the average fare per kilometre – rose 15% to 26.1 sen from 22.6 sen.

At the same time, the airline's workforce was trimmed by 15%, or 3,000, to 19,700. The employees left through a separation scheme, retirement and expiry of contract.

MAS chief financial officer Tengku Azmil Zahruddin said this was an ongoing process and that this year the workforce was projected to be reduced further by about 650 people through similar means.

The results were also helped by the stronger ringgit, Jala said, as a lot of costs, such as fuel and aircraft leases, were paid in US dollars while much of its revenue was in ringgit.

The airline is starting to plan for its next phase – expansion – by replacing its older planes with new aircraft. It has invited proposals from Airbus, Boeing and Canada's Bombardier.

The plan is to acquire up to 55 narrow-bodied planes for regional routes and about the same number of wide-bodied aircraft for long haul.

There would be a combination of purchases and leases, and it would be a prudent programme, Jala said.

Source : STAR
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