Malaysia Airlines Posts Q2 Loss

August 23, 2011

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Malaysia Airlines posted its second straight quarterly loss and warned that high fuel costs would keep it in the red for the rest of the year.

The national carrier recorded a second-quarter net loss of MYR527 million ringgit, compared with a loss of MYR532 million (USD$179 million) a year ago. Fuel costs jumped 41 percent to MYR1.55 billion ringgit.

Revenue rose 8 percent to MYR3.5 billion ringgit during the first half.

Malaysian said it did not expect to be profitable in the second half of 2011, although the anticipated losses would be smaller than those in the first half.

"MAS current forward booking profile indicates key challenges for the Europe, US and Japan regions, with normal forward booking trend for other major regional destinations," the airline said in a statement.

Earlier this month, the airline and rival AirAsia agreed to swap shares in a deal valued at USD$364 million, an exercise analysts said would eliminate overlaps and boost both companies' profits.

High fuel prices and the uncertain global economic outlook have weighed on airlines worldwide, prompting carriers such as Australia's Qantas to consider collaborations to save costs and weather the challenges.

Malaysian said it would take steps to return to profitability and was executing the return of two 747-200 freighters, one 747-400 and three 737-400s by end September 2011 due to the difficult environment.

"Immediate initiatives will include, amongst others, better capacity management; the implementation of dynamic pricing to improve yields and revenues; a review of products and brand positioning," the airline said.

Malaysia Air's fleet renewal has begun with the delivery of five new Boeing 737-800 aircraft and five new A330-300s as at mid-August 2011, it said.

There will be six more aircraft deliveries in 2011, with two 737-800s, two A330 Freighters and two ATR72.