MAB sees lower losses in FY18 despite arduous 3Q18

2019 looks similarly challenging, but MAB remains committed to improving performance and reducing costs

By NG MIN SHEN / Pic By TMR

Malaysia Airlines Bhd (MAB) is expected to narrow its losses in the financial year ending Dec 31, 2018 (FY18), notwithstanding a challenging third quarter ended Sept 30, 2018 (3Q18), that was impacted by a crew shortage.

In a statement last Friday, the national flag carrier’s group CEO Captain Izham Ismail said 3Q18 continued to be challenging with volatile fuel prices, unfavourable foreign-exchange movements and over-capacity in key markets, compounded by a pilot shortage.

“We have seen good quarterly traction in the year and are expecting to finish 2018 by reducing the losses of the previous year.

“Moving forward, 2019 looks similarly challenging, but we remain committed to improving performance and reducing costs while managing external factors beyond our control,” he said.

MAB has been booking losses since 2011, while staff and consumer confidence were dampened by the twin tragedies of MH370 and MH17.

Izham said earlier this year that the airline was expected to turn profitable by 1Q19.

Passenger yield was lower at 21.5 sen in 3Q18 compared to the 22.6 sen recorded a year ago, due in part to the inability to deploy planned peak upgrading of aircraft to wide body planes during the period as a result of a crew shortage which impacted revenue.

“The airline has since activated an extensive recruitment exercise, supported by an aggressive cadet enlistment and training programme to build a strong pipeline of crew and is confident the situation will be stabilised by early 2019,” the MAB statement noted.

Total revenue average seat per kilometre rose 1.4% to 21.2 sen in the period from 20.9 sen a year earlier, mainly driven by a higher cargo revenue which jumped 29% year-on-year (YoY).

MAB carried a total of 3.47 million passengers during the quarter, up 2.1% from 3.4 million passengers last year.

Passenger load factor climbed to 80.5% in 3Q18 from 77.5% in 3Q17, while recovery in international business continued with load factor rising to 81.7% in the period versus 78.4% in 3Q17.

On-time performance improved 8% YoY to 74.9% from 69.5% in 4Q17 as a result of improved operational efficiencies in engineering and ground handling.

The airline’s Customer Satisfaction Index saw an overall improvement rising 7% YoY as its net promoter score increased by 21 points during the quarter.

This was partly driven by the introduction of an “After-Call Survey” to its call centre to obtain customer feedback. Call centre satisfaction ratings improved 7% to 74%.

MAB added a sixth A330-200 to take its fleet to 21 A330s deployed on high-density regional routes across Asia Pacific.

The B737-800s continue to provide domestic and regional connectivity as the airline prepares for delivery of 10 B737 MAX 8 in 2020.

Its A380-800s fleet continue to service Project Amal, a division dedicated to haj and umrah traffic.

This division transported over 15,000 pilgrims during haj on more than 80 flights between Kuala Lumpur, Jeddah and Madinah throughout July and September 2018.

RELATED ARTICLES

Thursday, March 7, 2019

Capt Izham: We are in close discussion

Thursday, March 21, 2019

MAB tops list of complaints in 2H18

Friday, October 13, 2017

MAB open to minority stake sale

Tuesday, October 8, 2019

PM: Khazanah to decide on MAB stake