Malaysia Airlines reported its sixth straight quarterly loss on forex losses and declining revenue, but said recent cost-cutting steps were showing signs of paying off.
The struggling national flag carrier narrowed its loss in the second quarter thanks to lower fuel costs but remained firmly in the red, losing 348.7 million ringgit ($111.7 million).
The airline – which reported a 2.5 billion ringgit full-year loss for 2011 – had announced in June it was pushing back a planned 2013 return to profitability after a tie-up with rival budget carrier AirAsia crumbled.
The latest results will add to the gloom surrounding the airline, which has struggled to remain in the black, with analysts blaming a history of poor management, change-averse unions, government interference and other factors.
However, chief executive Ahmad Jauhari Yahya said ”tough decisions taken earlier” including cutting some routes were paying off.
”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 said.
The loss for the April-June period was smaller than the 525.8 million ringgit hit that the company took in the second quarter of 2011.
The airline said fuel costs, which made up 37.0 percent of expenses, fell 18.0 percent in the latest quarter on lower consumption and weakening jet fuel prices.
It blamed much of the second-quarter loss on forex losses of 173.0 million ringgit as the US dollar strengthened against the ringgit. Second-quarter revenue also slipped 6.0 percent.
Malaysia Airlines and profitable upstart AirAsia announced a tie-up plan late last year that analysts predicted would help the flag carrier by eliminating head-to-competition on some routes.
But it fell apart in May, with flamboyant AirAsia boss Tony Fernandes later expressing relief, citing ”massive” Malaysia Airlines union resistance, and implying the flag carrier had deep-seated problems.
Malaysia Airlines, which in February admitted it was ”in crisis,” has announced a series of turnaround plans over the years, the latest major refocusing coming last December.
But many analysts have come to greet the recurring pronouncements with skepticism.