MALAYSIA AIRLINES Q2 PROGRESS

MALAYSIA Airlines has recorded continued progress over the second quarter of 2016 with a promising outlook moving into the third quarter. As expected, the second quarter was weaker due to seasonality with revenue down, a result of the soft demand during Ramadan. Whilst overall load factor was softer, domestic travel loads improved. The group expects to record a loss for the whole fiscal year of 2016 but a significantly smaller one than initially budgeted for at the beginning of the year, and ahead of the turnaround plan for the airline to be sustainably profitable by 2018. The carrier’s punctuality remained stable during the period, reaching a year-to-date level of 82% for punctuality. The on-time performance ratio was, however, mainly affected by external factors, such as delays in immigration processing and infrastructure constraints at KLIA. Particularly pleasing for the airline was the increase in overall customer satisfaction as a result of product enhancements. These included the newly revamped mobile app and the new “dine anytime” service, enabling First and Business class customers to enjoy their meals at their convenience. Upgrades to the airline’s Economy class were also well received with the introduction of larger protein portions for in-flight meals. When looking at fleet enhancements a further two Airbus A350-900 were leased in the quarter for delivery in 2018 and construction started in June at Airbus in Toulouse of the first of six new Airbus A350900 aircraft, to be delivered in October 2017. Malaysia Airlines has a new revenue management plan in place to intensify its sales and marketing efforts in the second half of the year. The airline will also be engaging with travel agents, a key target audience in Malaysia.