Malaysia Airlines narrowed its losses to RM171 million after tax for its first quarter ending March 31, a 29 per cent reduction from the same period last year.
The national carrier, which posted a record loss of RM2.5 billion last year, said in a press statement today that it achieved the cut in losses despite an average fuel price of $135 (RM421) per barrel against $120 in Q1 2011.
Operating losses were also down by 10 per cent to RM307 million as it made more revenue (RM3.11 billion) and spent less (RM3.42 billion).
Its chief executive Ahmad Jauhari Yahya said this was due to “some tough decisions” in accordance with its turnaround plan.
“We cut unprofitable routes especially in long haul where yields were low. This helped us to immediately improve our Revenue per Available Seat Kilometre (‘RASK’) performance year-on-year,” he said, adding that newer aircraft helped slash fuel costs.
Ahmad Jauhari also pointed out that MAS is still carrying out “a major re-fleeting exercise” with 23 new aircraft including the flagship Airbus A380 entering service this year.
MAS said passenger yield increased 12 per cent and RASK increased by 8 per cent while passenger capacity dropped 8 per cent, reflecting the airlines’ network rationalisation that saw 12 routes cut during the period.
The “signification reduction in losses,” as claimed by MAS, comes on the back of the May 2 reversal of the controversial share-swap with AirAsia, just nine months after the tie-up between the two carriers.
State asset manager Khazanah Nasional Berhad had swapped 20.5 per cent of MAS stock for a 10 per cent stake in Asia’s biggest budget airlines last August 9.
The swap enabled AirAsia bosses Fernandes and his partner Datuk Seri Kamaruddin Meranun to sit on the MAS board and ostensibly help turn it around although Khazanah has denied that AirAsia was bailing out MAS.
But Putrajaya aborted the tie-up just nine months after it was hailed as the best way to save the ailing national airlines, which has gone through at least two business turn-around plans in the past decade.
Sources told The Malaysian Insider the Najib administration’s insistence to ensure no job cuts in MAS before the next general election and workers unhappy with AirAsia executives managing the national carrier had all but made sure the pact would not take off successfully.
The unwinding of the share swap will be cashless and based on the same swap ratio of 2.05 based on the prices when the share swap was announced in August 2011, where MAS was valued at RM1.60 per share and AirAsia’s share at RM3.95.
The Malaysian Insider reported as early as March that the government was having a relook at the share swap and was considering a special entity to take MAS off the hands of its then main shareholders, Khazanah and Fernandes’ Tune Air, after the shocking losses reported earlier.