MALAYSIA Airlines (MAS) registered a loss after tax of RM171 million (US$54 million) for 1Q2012, a 29-per cent recovery on its RM242 million net loss during the same quarter last year.
In an internal circular to staff, MAS group CEO Ahmad Jauhari Yahya attributed the marginal upswing to measures implemented since the airline embarked on efforts to streamline its network, lower costs and win back customers.
“We cut unprofitable routes, especially longhaul where yields were low. For cost, we lowered our fuel bill considerably – helped by the progressive delivery of new aircraft and returning old ones,” he said.
However, the situation remains dire for MAS. “(There is) a daily cash burn of RM5 million. It is imperative that we keep pushing up our revenue throughout the network and very closely watch all costs,” said Ahmad Jauhari.
To get around its financial handicap, the airline has resorted to a three-pronged fundraising initiative to bankroll its ongoing fleet revamp.
The first facet involves a 10-year Sukuk (Islamic bond issue) programme to generate RM2.5 billion.
The second involves a deal with Malaysia’s Ministry of Finance, which will purchase six Airbus A380s and two Airbus A330s worth RM5.3billion, and lease them to MAS through a special purpose vehicle.
The remaining funds will be sourced through commercial loans, with the shortfall met by MAS majority shareholder, Khazanah Nasional.
As an additional cost cutting-measure, MAS has offered its workforce up to two years of no-pay leave. The arrangement allows staff to seek alternative employment, except with rival airlines, but still avail of air travel benefits.
Reporting by N. Nithiyananthan
