Malaysia Air­lines warns of loss for FY16

The Sun (Malaysia) - - SPEAK UP -

SEPANG: Malaysia Air­lines Bhd (MAB), which recorded a smaller net op­er­at­ing loss on higher rev­enue for the third quar­ter, ex­pects to record a loss for the cur­rent fis­cal year (FY16).

In a state­ment re­leased yes­ter­day how­ever, man­age­ment said it is re­mains con­fi­dent that it will sur­pass tar­gets based on the trac­tion gained in the turn­around ef­forts thus far.

MAB saw a re­duced net op­er­at­ing level loss by 7% in the third quar­ter (Q3) com­pared with Q2, while pas­sen­ger rev­enue for the quar­ter saw a 12% in­crease over the pre­vi­ous quar­ter.

Pas­sen­ger load fac­tor for Q3 also im­proved to 79% from 69% in Q2 and 74% in the com­par­a­tive Q3 of 2015.

The air­line con­tin­ued to make progress on cost re­duc­tion, which will re­main a key fo­cus with the rene­go­ti­a­tion of con­tracts and con­sol­i­da­tion of sup­pli­ers con­tin­u­ing across the board.

The group re­mains cau­tious on its out­look for fi­nan­cial year 2017 (FY2017) and be­lieves it will im­prove on its tar­gets for 2017 as set out in the MAS Re­cov­ery Plan.

Its guid­ance is de­pen­dent upon there be­ing no un­ex­pected ad­verse de­clines in 2017 air­fares and a pos­si­ble head­wind could be in­tense com­pe­ti­tion.

“Lim­ited vis­i­bil­ity and the planned ex­pan­sion of other car­ri­ers in Malaysia, who may add an ex­cess of air­craft, will re­sult in gross over­ca­pac­ity in our lo­cal Malaysian mar­ket and we ex­pect fares to trend sig­nif­i­cantly down­wards in 2017,” Malaysia Avi­a­tion Group Bhd group CEO Peter Bellew said.

MAB ex­pects unit costs will fall by a fur­ther 3% in FY2017. The price of fuel in 2017 com­bined with in­creased ef­fi­ciency mea­sures are ex­pected to de­liver sig­nif­i­cant sav­ings and th­ese sav­ings will be passed on to cus­tomers. It ex­pects to carry over 15 mil­lion cus­tomers in FY2017.

“De­spite the tough op­er­at­ing en­vi­ron­ment Malaysia Air­lines be­lieves that we can de­liver prof­itable growth in 2018 by con­trol­ling costs, com­pet­i­tive air­fares, and max­imis­ing load fac­tors in a man­ner that will ben­e­fit our cus­tomers, our peo­ple and our share­holder.”

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.