Thursday, November 26, 2009

Malaysia Airlines (MAS) reported a net loss of RM299.6mil for the three months ended Sept 30 compared with a net profit of RM38.1mil in the previous corresponding period mainly due to the loss of RM202mil in derivative mark-to-market on fuel.
At its results briefing yesterday, managing director/chief executive officer Tengku Datuk Azmil Zahruddin said the fourth quarter continued to be tough although there were signs of improvement in passenger traffic.
“Forward bookings for fourth quarter have been very encouraging. We are seeing some signs of recovery but yields remain under pressure.
Tengku Datuk Azmil Zahruddin (left) and MAS chief financial officer Mohd Azha Abdul Jalil at the results briefing Wednesday.
“Our strategy is to continue to strengthen our domestic and Asean operations and position ourselves for the recovery and growth of the long haul sector,” he said.
For the third quarter, the carrier posted pre-tax loss of RM297.1mil from a pre-tax profit of RM19.7mil a year ago, while turnover dropped to RM2.96bil from RM4.1bil before. Its loss per share stood at 17.93 sen from an earnings per share of 2.28 sen.
As at Sept 30, MAS’ cash and negotiable deposit balance stood at about RM2.5il.
“It’s (cash) lower than quarter two but we can still buy a lot of planes,” Azmil said.
MAS narrowed its operating loss to RM73mil for the third quarter from RM421mil losses reported in the preceding quarter, due to aggressive sales campaigns and highly competitive pricing which resulted in seat factor gaining 6.9 percentage points to 76.7%. The average yield for the period stood at 23 sen.
Its total operating expenditure decreased by 26%. Fuel cost and non-fuel cost dropped by 50% and 4% respectively.
The national carrier carried 3.3 million passengers during the quarter, the highest registered since early 2008. Its domestic operations remained strong with traffic volume up 20%.
For the nine months ended Sept 30, MAS posted a net loss of RM119.5mil against a net profit of RM198.1mil previously. Revenue was lower at RM8.3bil compared with RM11.6bil before while net loss per share stood at 7.15 sen.
Year-on year, the airline reported an operating loss of RM73mil compared with RM44mil operating profit previously.
Despite MAS’ RM202mil loss in derivative mark-to-market on fuel, Azmil said it would continuously review its competitive fuel hedging strategy.
“Fuel prices are on an uptrend. Competitive hedging is the right way to go as fuel prices remain volatile,” he added.
MAS hedged 57% of its fuel requirement for the remainder of 2009 at US$90 a barrel and 60% of its fuel needs at US$100 per barrel for 2010.
To a question, Azmil said forward bookings for 2010 were better compared with the current year. “It’s good news after all the gloom and doom. Our blueprint remains the business transformation plan 2 and we aim to transform into the World’s Five Star Value Carrier and we are accelerating the key business initiatives,” he said.
Without elaborating, Azmil said MAS had plans to introduce new destinations in the Middle East.
Asked if MAS would be increasing its fares due to its low yield, Azmil said MAS would continue to offer competitive and compelling fares.
“Increasing yield is not the same as increasing fares and it is not necessary to increase fare to boost yield,” he added.
MAS will lease two additional Boeing B737-800 aircraft next year to increase domestic and regional capacity.
“We have received 13 new ATRs for Firefly and MASwings and we have new aircraft deliveries from 2010 to 2015 which will allow us to deploy capacity in profitable routes and optimise yields through our new fleet and offerings,” Azmil said.
On the funding of its new aircraft, he said MAS had yet to decide as there were many options available. “We have a year from now before we receive the first aircraft in October 2010,” Azmil said.

Source : STAR
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