Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (Nov 30): Malaysia Airlines Bhd saw passenger revenue for the third quarter ended Sept 30, 2016 (3Q16), increase by 12% over the previous quarter due to aggressive sales campaigns.

"Marketing campaigns were kick-started in August and September after a lull period, focusing on the all-inclusive value fares offered with no hidden extras," it said in announcing its latest quarterly update today.

Malaysia Airlines said it carried 3.6 million passengers in 3Q16, 9% more than the 3.3 million passengers carried in 2Q16. It is forecasting to carry over 15 million customers in 2017.

Passenger load factor in 3Q16 improved to 79.3% from 68.6% in 2Q16 and 74% in 3Q15.

Malaysia Airlines group managing director and chief executive officer Peter Bellew said the focus in the first half of 2016 was on reducing costs and improving the customer experience.

Malaysia Airlines saw a reduced net operating level loss in 3Q16 by 7% compared with 2Q16, suggesting that its turnaround efforts are on the right track. Passenger yield, however, fell 3.55% to 21.7 sen in 3Q16 from 22.5 sen in 2Q16.

"We believe we will improve on our targets for 2017 as set out in the MAS Recovery Plan. Our guidance is heavily dependent upon there being no unexpected adverse declines in 2017 airfares and a possible headwind could be intense competition," said the group.

"The airline and group 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," it added.

"Overall, the airline and the group are expected to record a loss for this fiscal year but management remains confident that both will surpass targets based on the traction gained in the turnaround efforts thus far," it added.

Malaysia Airlines also expects unit costs to fall by a further 3% in 2017 on low fuel price combined with increased efficiency measures.

"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," it said.

Meanwhile, Malaysia Airlines said it is working towards finalising plans for the formation of a new airline, utilising its fleet of six A380s, servicing the Haj and Umrah market.

"Malaysia Airlines is already transporting Islamic pilgrims on charter flights to Saudi Arabia very successfully and is in a good position to cater for increased passenger demand on this route," it said.

Moving forward, Malaysia Airlines said it remain cautious for FY17 due to the weaker ringgit, Brexit uncertainty and overcapacity in the Malaysian market.

"We have hedged significant fuel requirements but we will continue to be exposed to the US dollar volatility in the first half of 2017," it said.

"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 Malaysian market and we expect fares to trend significantly downwards in 2017," it added.

 

      Print
      Text Size
      Share