KUALA LUMPUR (Jan 14): Malaysia-based carriers, which had been loss-making even before the outbreak of Covid-19 in 2020, are racing against time towards profitability amid a general rise in airfares as demand for air travel continues to outstrip supply following the reopening of borders by most countries over the past year.
But loss-making Malaysia Aviation Group Bhd (MAG) — the parent company of national carrier Malaysia Airlines Bhd, FlyFirefly Sdn Bhd and MASwings Sdn Bhd — is sticking to its break-even target in 2023 despite managing to deliver a profit in the fourth quarter of 2022. Breaking even will mark a significant milestone in the aviation group’s Long Term Business Plan 2021-2025 (LTBP 2.0).
In an interview with The Edge, its group chief executive officer Captain Izham Ismail sees headwinds such as soaring fuel prices, which are linked to the war in Ukraine, along with high interest rates, foreign exchange volatility and talk of a global recession potentially delaying MAG’s full recovery.
That said, two years after MAG successfully emerged from a restructuring involving RM15 billion of debt owed to 75 creditors, the group is expected to report higher revenue and a narrower net loss in the recently ended FY2022, thanks to a resurgence in air travel resulting from the reopening of borders.
The group’s operations have remained cash-flow positive since October 2021 and today, it has a comfortable cash position that is expected to tide it over the anticipated economic volatility in 2023.
Meanwhile, MAG has made improving customer experience one of its top priorities in 2023 as it acknowledges the gaps in its customer experience and operational performance.
It has also put in place a succession plan, where its board of directors and shareholder Khazanah Nasional Bhd now has a wide pool of talent to choose from to become the future CEO of the group.
Read more about it in The Edge Malaysia weekly’s Jan 16 edition.
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