The positive growth is due to the sustainable strategies underlined in its enhanced LTBP 2.0
by S BIRRUNTHA / pic by MUHD AMIN NAHARUL
MALAYSIA Aviation Group (MAG) has achieved positive Ebitda of RM433 million for the financial year ended Dec 31, 2021 (FY21), from a loss before interest, taxes, depreciation and amortisation of RM1.76 billion a year earlier.
In a statement yesterday, the group said it has reduced loss for FY21 by 60% compared to 2020, following sustainable strategies underlined in its enhanced Long-Term Business Plan 2.0 (LTBP 2.0).
The group added that this was achieved through strong cargo performance by Malaysia Airlines Bhd (MAB) Cargo, generating revenue of RM3 billion as a result of high global demand, allowing increased freighter and belly utilisation via passenger-to-cargo flights.
Despite lower passenger traffic and reduced capacity for Malaysia Airlines by 62% and 71%, respectively, in 2021, MAB recorded 57% higher yield in passenger revenue.
This was assisted by its airline revenue maximisation solution which provides a complete and comprehensive picture of an airline’s revenue and cost ecosystem, personalising fares and offers to customers at a willing-to-pay rate using predictive forecasting features.
“The restructuring the group undertook in 2021 gave MAG the opportunity to holistically repair its balance sheet and address decades-long legacy issues, resulting in a reduction in the group’s liabilities of over RM15 billion and eliminating RM10 billion in debt.
“Lower operating cost from its cost savings/avoidance initiatives across the group as well as lower leasing cost post its successful restructuring further contributed to the improved performance in 2021,” MAG said.
As a group, MAG had launched its Sustainability Blueprint in April 2021, aimed to promote socio-economic development and achieve net-zero carbon emissions by 2050 across its businesses.
Since then, MAG recorded 2.6 million kg of jet fuel savings equivalent to RM7 million and 8.1 million kg of carbon reduction from operations across its cargo and commercial flights.
With the gradual reopening of international borders, MAG is seeing strong uptake in passenger demand and sales contributing to the group’s cash balance which remains solid.
It expects the cargo operations to continue to lead the market as the demand for cargo movement in the APAC region is expected to grow by 5%.
“MAB and its sister airlines will gradually add capacity for both domestic and international routes, expecting to achieve more than 70% capacity to pre-pandemic level,” it said.
MAG said the current Russian-Ukraine conflict had raised concerns and challenges in managing operational cost, which was directly impacted by the escalating fuel price.
Fuel price at current levels of US$110 to US$130 (RM557.70) per barrel makes up to 40% to 45% of the group’s total operational cost, an increase of about 35% to 40% from a year ago.
“All companies within the group have taken immediate steps to manage the impact of higher fuel cost.
“Safety remains the top priority for MAG and measures have been taken to avoid the conflict zone,” it added.