Malaysia Airlines doubles losses to RM1.2 bil
Malaysia Airlines does not seem to be any closer to profitability having posted a net loss of RM1.2 billion for the 2013 financial year and a deepening quarterly net loss of RM338 million for the fourth-quarter last year.
Despite a 27% improvement in passenger traffic in 2013, the national carrier not only failed to turn a profit but more than doubled losses from the previous year’s results.
In a statement today, Malaysia Airlines said operating profit or earnings before interest, taxation, depreciation and amortisation (EBITDA) improved 36% year-on-year to RM254 million for the financial year ended 2013.
Despite this, the airline’s spokesperson said, net income after tax deteriorated further due to higher finance costs and unrealised foreign exchange losses.
“We knew 2013 would be a challenging year of intense competition which would impact yield. Knowing this, our focus was to drive revenue, revenue, revenue.
Amhad Jauhari Yahya
“Our efforts saw the airline’s revenue increase 11%, whilst traffic went up 27% on capacity that increased only 17%,” Malaysia Airlines CEO Ahmad Jauhari Yahya said on the national airline’s 2013 performance.
“While capacity, measured in available seat kilometres (ASK), grew 17% utilizing existing fleet and resources, costs grew by only 10% even after absorbing higher costs from the weakening ringgit against the US dollar and a one-off cost for aircraft redelivery,” Jauhari added. “This has resulted in a lower CASK (cost per ASK) in 2013.”
Jauhari, now more than two years into his ambitious turnaround plan for the airline said he would continue to rely on cost-cutting to steer the airline back to profitability, not seen for five years.
“With intensifying competition, we expect the pressure on yield to continue. We will intensify efforts to reduce our costs, focusing on inherent legacy costs, while increasing utilization to drive traffic,” he explained.
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