NATIONAL carrier Malaysia Airlines (MAS) has reported a net loss of RM443 million (US$137 million) for the three months ending March 31, almost double the loss of RM279 million in the same quarter last year.
Core airline revenue increased by eight per cent year-on-year on the back of a 19 per cent increase in capacity, but overall group performance was dragged down by weak cargo and other revenues resulting in a marginal two per cent growth.
Despite 18 per cent growth in traffic, severe yield pressure due to excess industry capacity and a disadvantageous cost structure caused earnings before interest, taxation, depreciation and amortisation to fall to negative RM101 million compared to RM30 million this time last year. Airline yield dropped nine per cent year-on-year.
MAS Group CEO, Ahmad Jauhari Yahya, said: “Traditionally, the first half is always weaker following the heavy travel period of the previous year-end holidays. The net loss this first quarter is not unexpected.
“However, the results were made worse with the impact on air travel in general following the disappearance of MH370. The whole market has reacted by slowing down demand.
“While the search for MH370 continues today more than two months since it disappeared, our group needs to accelerate efforts to improve its revenue stream and better manage our high costs which have increased in line with greater capacity.
“This need has become even more urgent for MAS’ future survival and sustainability in a market that is not showing any signs of letting up on competition.”
Operations were slowed for several weeks since early March when MH370 disappeared. Marketing activities were also halted out of respect for the families of those on board the Beijing-bound Boeing 777 aircraft.
Meanwhile, there have been suggestions for the airline to be privatised or allowed to declare bankruptcy so it could begin anew, or for its profitable units like engineering and shorthaul Firefly to be spun off in a public share sale, according to Singapore’s broadsheet The Business Times.
