KUALA LUMPUR: Malaysia Airlines Bhd’s (MAS) turnaround plan is bearing fruit as the carrier continues to post better quarterly financial results, proving that it is well on track to become profitable again by 2018.
In the third quarter from July to September this year, the national airline saw a 12 per cent rise in its passenger revenue from the second quarter due to aggressive sales and marketing initiatives.
It also reduced its net operating level loss by seven per cent compared to previous quarter as cost reduction is the airline’s main turnaround strategy focus.
MAS did not announce the numbers for its revenue and net operating loss as it is not a listed company.
Its chief executive officer Peter Bellew said the third quarter was great news for MAS with more forward bookings being made as well as higher number of passengers carried.
“It gives the message to the public that we are growing and developing the company at the moment … We will continue with our aggressive sales campaign. We will not take our foot off that,” he told Business Times in a telephone interview yesterday.
MAS saw a rise in the number of passengers carried to 3.6 million in the third quarter against 3.3 million in the second quarter this year.
Its load factor also improved to 79.3 per cent from 68.6 per cent, while its flight capacity or available seat per kilometre (ASK) rose to 10.53 million from 10.35 million passengers.
Maybank Investment Bank Bhd aviation analyst Mohshin Aziz said MAS’ third quarter result is an indication of the airline’s incremental improvement on sequential basis this year.
“I am pleased with the trend that MAS is showing. It’s very encouraging and hopefully they can continue with the trend and momentum. It’s what we have been waiting to see,” he said when contacted yesterday.
MAS has also rebuilt its relationship with travel trade agents in Malaysia and the United Kingdom, , said Bellew, adding that bookings on many of MAS’ routes are full for the next six months.
According to its statement, the airline’s targeted marketing led to a 15 per cent market share rise on its London route from 45 per cent in May to 59 per cent in September.
Also in the third quarter, MAS’s yield fell 0.8 sen to 21.7 sen from 22.5 sen in the second quarter. Its on-time performance (OTP) or punctuality also dropped to 68 per cent from 82 per cent.
“There is a slight decline in yield but not much. The decrease is far less than our competitors,” said Bellew, adding that MAS is working with all parties to improve its OTP.
MAS said it will improve its target next year as set out in its recovery plan with unit cost targeted to drop further by three per cent.
It will also set up a new airline for the hajj and umrah market in the next few years.
Bellew said the introduction of new passenger service charge (PSC) rate starting January 1 next year will boost the number of passenger traffic coming into Malaysia.