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Saturday, August 21, 2010

Malaysia Airlines Moves Into The Red

Malaysia Airlines moved into the red in the fiscal second quarter, but is still planning to add new aircraft to its fleet.

In the three months to June 30, the carrier had a net loss of 534 million ringgit ($170 million), compared with a net profit of 876 million ringgit for the corresponding period last year, it says.

Operating revenue rose 27% to 3.16 billion ringgit from 2.48 billion ringgit, while operating expenses rose 18% to 3.50 billion ringgit from 2.97 billion ringgit.

The second-quarter loss was partly due to a loss of 217 million ringgit ($69 million) from fuel hedging, says the carrier. The quarter also suffers in comparison with last year’s second quarter because in the earlier period the airline received a boost due to compensation payments from Airbus for delays in the carrier’s Airbus A380 deliveries, the airline adds.

For the first half, the carrier posted a loss of 223 million ringgit ($71 million), compared with last year’s first-half net profit of 181 million ringgit ($58 million).

For the second half, the challenge will be strengthening yield and mitigating fuel costs, says the airline. “There will be more opportunity to increase yield as Malaysia Airlines starts to receive new planes,” says Malaysia Airlines CEO Azmil Zahruddin. “The airline has ordered up to 55 737-800s and 25 A330-300s ... A total of three 737-800s [from the aircraft order] will be received in 2010, one each in October, November and December.”

Azmil adds, “We have also completed our discussions with Airbus, and will be taking the six A380s. The first will be delivered in April 2012.”

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