Malaysia Airlines today announced a reduced operating loss of RM102 million for the second quarter ended 30 June 2012 compared to RM443 million in the same period last year. The significant 77% improvement in performance year-on-year (y-o-y) at the operating level was due to efforts in the pricing and revenue management area plus lower fuel costs and lower passenger-related costs in line with capacity cuts.
The operating loss for the second quarter was also lower than the operating loss of RM307 million achieved in the first quarter of 2012. For the second quarter of 2012, total revenue fell 6% to RM3.2 billion compared to RM3.4 billion in the previous year following the Route Rationalisation programme in late 2011 and early 2012 to cut several loss-making and low yielding routes.
Group expenditure reduced 13% y-o-y to RM3.4 billion. Fuel costs, which accounted for 37% of expenditure, fell 18% to RM1.3 billion following a 15% drop in consumption. The same quarter also saw a drop in jet fuel price to an average USD132 per barrel from USD140 per barrel y-o-y. Non-fuel costs dropped 10%.
Aircraft leasing costs reduced 9% due to the return of two freighter B747 aircraft. Overall maintenance costs fell by 16% whilst handling and landing costs fell some 20%. On the other hand, depreciation of aircraft increased 35% in the second quarter due to additions to the fleet with the arrival of 5 new aircraft including the first of six A380 ordered as part of its fleet renewal programme.
The Group’s net loss after interest and taxes stood at RM348.7 million for the second quarter ended 30 June 2012, equivalent to a 34% improvement on the loss of RM525.8 million registered in the same period y-o-y. Included in the second quarter 2012 results was a forex loss of RM173.0 million due to the strengthening of the US Dollar against the Ringgit.
For the 6 months ended 30 June 2012, Malaysia Airlines’ net loss stood at RM520.1 million, 32% better than the previous loss of RM767.4 million for the same period in 2011.
Commenting on the performance, Malaysia Airlines Group Chief Executive Officer Ahmad Jauhari Yahya said, “The much improved second quarter results, compared against the performance year-on-year and even the first quarter of 2012, show that the tough decisions taken earlier to suspend high loss-making routes is showing results.”
“With the competitive environment in which we operate in both locally and internationally as well as the continued high price of fuel, it is important that we were able to carefully and proactively capacity manage our fleet and network in line with market demand. The Group’s aggressive focus to consolidate our network is helping the turnaround, as already showing in the improvement in yield and lower operating expenses, specifically spending on fuel”, Ahmad Jauhari added.