Malaysia Airlines cautious on outlook this year
MAG says carrier anchored to its recovery plan amid steady progress
MALAYSIA Airlines Bhd remains cautious on its outlook this year even after posting its highest revenue for last year in the fourth quarter.
The company said fourth quarter total revenue rose two per cent year-on-year from 2016.
Parent Malaysia Airlines Group (MAG) expects supply and capacity to continue to pressure yields, although the effect should be moderate this year.
“Southeast Asia has strong traffic growth but overcapacity remains a challenge and pressurises yields. Malaysia Airlines will maintain its cautious outlook in fiscal year 2018,” said MAG in a statement yesterday.
MAG chief executive officer Captain Izham Ismail said Malaysia Airlines was firmly anchored to its recovery plan, and was happy to see steady progress continue in the fourth quarter.
Malaysia Airlines recorded its highest-ever passenger yield of 23.6 sen last year despite the overcapacity.
Load factors for the fourth quarter declined slightly to 77 per cent from 81 per cent previously, with moderation in domestic load due to refocus on higher-yield passengers.
“A concerted focus on yield in the second half of the year resulted in overall improvement in yield and RASK (revenue per available seat kilometre), bucking the general downward trend of other regional players,” said Izham.
“Overall, the airline underperformed compared to the previous year. This was due to a weaker first half impacted by a weak pricing strategy as well as the hike in foreign exchange (forex) rates and fuel costs.”
Malaysia Airlines recovered in the second half following closer oversight on yield management and ended the year in a stronger position, he added.
“We will continue to focus and drive yield to cushion the group from rising fuel costs and forex volatility.”
Izham said the rise in yield offset the slight reduction in load factor and resulted in higher RASK.
MAS welcomed the arrival of the first A350-900 at the Kuala Lumpur International Airport in November and the second the following month. The A350-900s will be replacing the A380s on the London route by this month.
MAS said its planned dedicated umrah and haj charter business under Project Amal was progressing well and on track to begin services in October.