_20230418131029_theedgemarkets.jpg&w=1920&q=75)
PETALING JAYA (April 18): Malaysia Aviation Group Bhd (MAG), the parent company of national carrier Malaysia Airlines Bhd, has reported its first annual operating profit since it underwent a full reset in 2014 and a debt restructuring in 2021, 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.
It reported a net operating profit of RM556 million for the financial year ended Dec 31, 2022 (FY2022). It also narrowed its net loss after interest and tax in FY2022, as it saw improvement across all its business segments during the year. Its net loss after interest and tax shrank to RM344 million from RM1.65 billion in FY2021.
In fact, the aviation group, which is controlled by sovereign wealth fund Khazanah Nasional Bhd, managed to turn its first quarterly profit in 4QFY2022 since 2014, recording a net profit after interest and tax of RM1.15 billion.
In a statement on Tuesday (April 18), MAG said this marked one of its best-ever quarterly performances in the past two decades, which it attributed to robust demand for travel, higher yields across the passenger and cargo business segments, as well as effective cost management and cash flow optimisation, despite higher fuel prices and labour costs, a weaker ringgit and lower-than-pre-pandemic flight capacity levels.
Revenue nearly tripled to RM10.75 billion for FY2022, from RM3.96 billion a year earlier. Cash balance stood at RM4.6 billion at end-2022.
Moving forward, despite MAG having emerged from the Covid-19 pandemic on a strong financial footing and is charting an upward financial trajectory, there are still many areas for improvement, especially on-time performance (OTP) and customer experience, said MAG group managing director Captain Izham Ismail.
Izham said the travel demand outlook remains strong in the near term, although the macroeconomic environment remains very challenging with sustained high fuel prices, volatile foreign exchange, higher operating costs due to inflation, labour constraints, as well as recession and geopolitical risks.
With China’s border reopening in January, Izham said Malaysia Airlines aims to regain the remaining capacity of its entire network, which currently stands at 85%, and fully recovering services to China and North Asia by the end of first half 2023.
“This will spur economic growth between Malaysia and China, boosting the overall business and trade links between the two countries,” he added.
In line with its Long-Term Business Plan 2.0 (LTBP2.0) and continuing the growth of its low-cost arm Firefly's jet operations, Malaysia Airlines will be transferring in phases the national carrier's intra-Borneo services and Kota Kinabalu international services to Firefly.
Meanwhile, Izham said the airline operator plans to ramp up capacity by at least 10% in 2023 for Amal — the airline’s special charter service to cater specifically for haj and umrah pilgrims — to meet surging demand where total umrah traffic today has exceeded pre-Covid-19 levels and the haj quota is back to normal levels.
Amal will look into inducing demand in Malaysia as well as exploring opportunities outside Malaysia as part of its long-term growth plan, he added.
In terms of its fleet, MAG is expected to taking delivery of four out of 25 Boeing 737-8 from the third quarter of 2023, which will see it deliver operational improvement directly with lower fuel cost and improve total network efficiency.