Thursday 28 Mar 2024
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KUALA LUMPUR (June 8): Malaysia Airlines Bhd reported a year-on-year (y-o-y) revenue growth of 2% for the first quarter ended March 31, 2018, as the airline achieved an improved cost base while making progress on the execution of its recovery plan.

The group, which did not provide the revenue figure, said its yield improved 6.6% y-o-y, while revenue per available seat kilometre (RASK) grew 3.5%.

This was despite the significant competition in both international and domestic sectors, it said in a statement today.

The increase in yield offset the reduction in passenger load factor which stood at 75.4% compared with 79.4% in the previous corresponding quarter.

“Our performance is on budget for quarter one and the concerted focus on yield, which began in the second half of the previous year, continues to see results with an overall improvement in yield and RASK,” Malaysia Airlines chief executive officer Izham Ismail said.

Izham said the group’s performance last year was hampered by an adverse exchange rate swing which saw the depreciation of the ringgit against the US dollar.

With more than 50% of its cost structure in USD, the depreciation had a significant impact on the company’s overall financial performance.

Meanwhile, a higher on time performance (OTP) of 76% was registered for the quarter, against 73% a year ago. Malaysia Airlines noted however that this was still lower than the overall target of 82% mainly due to consequential and technical delays and aircraft limitations.

“External factors, which included weather-related delays and air traffic congestion, also impacted the OTP. Disruptions were kept to a minimum, however, through stringent monitoring and activation of various contingency plans conducted by an internally set up OTP task force,” said the group.

It added that the total number of mishandled baggage showed a significant reduction of 44% compared with the fourth quarter of 2017.

A total of 43 fuel initiatives, with target savings set at RM220 million, were also registered in this quarter and will be tracked for 2018.

Nonetheless, although the quarter was an overall positive one, Izham said the second quarter is expected to be weaker and more challenging due to the soft demand during Ramadan.

He added that the airline is also preparing for a tough year ahead with competition and exchange rate volatility, adding that escalating fuel prices remain a particular concern, up almost 100% from early 2016.

“Moving forward we will continue to drive yield by focussing on the premium segment to cushion the airline from rising costs. Overall, we expect to see improvements in our performance in the later part of this year and against this backdrop, we are working hard to deliver sustained profitability in 2019,” said Izham.

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