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Carrier is working towards breaking even by year-end
Malaysia Airlines group CEO Izham Ismail posing with the cabin crew for the airline’s latest brand campaign, Malaysian Hospitality Begins With Us.
SEPANG: Malaysia Airlines Bhd (MAS) needs 30 more new aircraft and replacement over the next decade and is working towards breaking even by year-end, said group chief executive officer Izham Ismail.
Unlike his predecessor, Izham’s focus is on growing yields (revenue per seat kilometer or Rask) rather than loads.
“Our focus is on Rask – we want to make profit even if loads have to take a beating,’’ he said.
Izham has given “impossible targets’’ to his team because he is serious about turning in profit for the airline. He has put in place several measures that will ensure the airline is able to make profit for seats sold instead of just filling up the plane.
Izham said MAS is “already cash positive at this stage’’ but the “acid test will be on how the airline performs in the second and third quarters of this year’’ even though the target is to break even by year-end.
For the fourth quarter of 2017, the airline’s Rask has improved, translating into a growth of 2% year-on-year. Its yields for the quarter were the highest for the year at 23.6 sen.
For this and next year, he is looking at 3%-4% sustainable net- work growth rate.
Izham said the airline is managing its forex exposure and fuel comfortably. As at last month, it has hedged 75% of its fuel requirements.
On competition in the domestic sector, he said MAS would remain a premium airline and would not venture into the low-cost sector. It will continue to focus on regional markets.
On the new aircraft, MAS has issued a request for proposal for more new-generation fuel-efficient jets to Boeing and Airbus. It needs to add more narrow-body and wide-body aircraft for future growth and replacement.
The A330 aircraft are due for replacement in 2023, said Izham.
He expects that by 2028, the airline will have over 120 aircraft. This will be made up of a 60:40 combina- tion of narrow-body and wide-body aircraft. Group wide, the airline currently has about 100 aircraft, of which MAS operates 65.
Izham was appointed more than three months ago to lead the airline to profitability and after 112 days, he said “It has never been a dull moment at MAS. I am steering the airline to recovery ... the path is never smooth.’’
He has spent a lot of time re-establishing the entire organisation and is working on pushing for greater acceptance of product and services offered by the airline, using technology to further enhance passenger experience, and improve every touch point for travellers.
Yesterday, Izham launched the refurbished MAS Golden Lounge. It is part of the airline’s new brand campaign which rides on Malaysian Hospitality (MH). In fact, all the three lounges at KLIA have been refurbished, offering a fresh appeal.
The airline is keen on strengthening itself as a “warm, genuine and efficient’’ airline once again after winning many accolades in the past. For that, it has put 300 of its frontline staff under training.
But Izham won’t say how much MAS is spending on the initiatives and re-branding exercise.
Asked if the airline is ready for a foreign investor, he said it is not looking at that currently.