KUALA LUMPUR — Sept. 8, 2017: Malaysia Airlines, which managed to increase its year-on-year passenger load factor by 16.9 per cent in the second quarter of this year compared with the same quarter last year amid heightened competition, remains on track to be profitable next year.
The airline will continue to be prudent in controlling capacity and has already scaled back on domestic route frequencies.
Passenger load factors remained steady in 2Q17 with the airline maintaining fare discipline despite the significant drop in competitors’ fares, it said in a statement today.
The recovery in international business continued in 2Q17, with a load factor of 78.8 per cent versus 67.4 per cent in 2Q16 but domestic business load factor declined marginally due to overcapacity.
Group Chief Executive Officer Peter Bellew said MAS will continue to focus on China, which has tremendous growth potential.
“The airline’s new routes, Fuzhou, Nanjing and Wuhan, which were launched in June, are already showing encouraging figures in their early months,” he said.
Moving forward, MAS will remain focused on improving services with a better steer on pricing.
“We have already seen progress on this front via a 2.6 per cent increase in domestic average fare,” he said.
Malaysia Airlines said the group has maintained its cautious outlook for fiscal year 2017.
Aggressive price war in the domestic market is expected to continue with a weak ringgit and higher fuel prices adding to an already challenging cost environment.
Advance bookings are far stronger in 2017 than 2016 but the airline is seeing yield pressure across all routes as low fares are available from many legacy carriers as well as the traditional low-cost carriers.
MAS is also exploring various options for wide-body aircraft, for possible delivery in 2018 and 2019, to address the rapid growth in international sales which require additional wide-body aircraft.
Discussions are continuing with a range of lessors, other airlines and aircraft manufacturers to acquire good quality aircraft with lie flat beds and high-quality in-flight entertainment systems.
The airline is also looking forward to the delivery of the six leased new Airbus 350 from Air Lease Corp, with the first planned to arrive by the year’s end.
The A350s will be used on the flagship service to London Heathrow from 1Q18 and are expected to result in a more efficient operating cost.
MAS is currently assessing the feasibility of a dedicated A380 charter airline as early as 4Q18 to service the growing global traffic for the haj and umrah. — Bernama