Thursday 28 Mar 2024
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KUALA LUMPUR (May 26): Malaysia Airlines Bhd, which saw a tough first quarter amid intensifying competition, weak ringgit and higher fuel price, is maintaining a cautious outlook this year, said its group chief executive officer Peter Bellew.

That's because the national carrier is expecting the ongoing price war in Malaysia to suppress average fares for the remainder of 2017.

In a statement today, Bellew said a more aggressive price war on the domestic market has happened earlier than initially predicted, ahead of the anticipated large increase in aircraft from competitors in the first and second quarters of 2017.

A weak ringgit and increased fuel prices create a challenging cost environment, he added.

"(Even though) advance bookings are far stronger in 2017 than 2016, the airline is seeing yield pressure across all routes as low fares are available from many legacy carriers as well as the traditional low cost carriers," said Bellew.

"For Malaysia Airlines, the market is diverging with consistent growth and improvement on international services, but a loss of market share domestically where fares are increasingly low. The airline will continue to be prudent in controlling capacity and will allocate its aircraft where we see the best potential returns," he added.

Bellew reiterated that the loss-making airline, wholly-owned by Khazanah Nasional Bhd, remains on track to be profitable in 2018.

 

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