“We are also putting in place proactive and defensive strategies to deliver profitable performance next year.”
CAPTAIN IZHAM ISMAIL, Malaysia Airlines Bhd Group chief executive officer
KUALA LUMPUR: Malaysia Airlines Bhd remains cautious about its outlook this year, given the volatility of the foreign exchange, escalating fuel prices and overcapacity in the domestic market.
Group chief executive officer Captain Izham Ismail said the national carrier was committed to driving through its planned initiatives for the remaining quarters of this year.
“We are also putting in place proactive and defensive strategies to deliver profitable performance next year. We will continue to drive yield by implementing effective pricing strategies and delivering better value products to our passengers,” he said in a statement on Thursday.
Izham said Malaysia Airlines would focus on upholding its “Malaysian Hospitality” service promise and guiding principle to deliver better flying experience, including improving food offerings and value-added services for passengers.
He said overcapacity in the domestic market had led to a worldwide pilot shortage, hampering the airline’s growth.
“Despite the challenges, we saw relatively steady results in the second quarter of this year from preemptive initiatives taken by the organisation,” he said, adding that these included better capacity management and leveraging the flexibility of Malaysia Airlines’ fleet type to navigate operational constraints.
Malaysia Airlines posted steady second-quarter year-onyear (y-o-y) growth performance with a marginal yield improvement of 0.3 per cent and revenue per available seat kilometre (RASK) growth of two per cent.
The national carrier acknowledged that the first half was extremely challenging due to escalating fuel prices (more than 37 per cent y-o-y), industry-wide overcapacity resulting in demand and yield pressures, and operational constraints due to pilot shortages.
Izham said it managed to hold its position on the back of improved efficiency, with its cost base now one of the lowest among full-service network carriers.
Malaysia Airlines proactively conducted a capacity management exercise to reduce capacity and frequencies on non-profitable routes, which saw its available seat kilometres (ASK) reduced by five per cent y-o-y.
“While the global economic situation are still volatile, we remain cautiously optimistic about the demand environment, both domestically and in Asia Pacific.
“The group will continue to be prudent in controlling capacity and has rationalised domestic route frequencies, allocating our aircraft where we see the best potential returns.”
Malaysia Airlines has been undertaking its biggest ever transformation over the past three years, cutting comparable unit costs by five per cent since then.
“The airline had seen good traction in the last three quarters after a weak 2017, with yield and RASK showing positive improvements,” he said.
Izham said Malaysia Airlines’ focus had remained on improving yield through better pricing strategies, especially in premium segments of business class and corporate sales.
It will maximise its assets by using certain aircraft types, such as Airbus A350-900 and A380800, opportunistically during peak seasons to high-traffic markets.
Having received its sixth and final A350-900 aircraft in July, the airline said the A350s would be deployed on the London route (twice daily flights from Kuala Lumpur to London and London to Kuala Lumpur).
It also received its three units of the A330-200s in the second quarter, enabling it to be more competitive in the fast growing Asia-Pacific aviation market.