MAS targets return to profit by 2014
MAS has shelved its earlier plan of having a separate regional airline but will increase frequency to some high-yielding regional destinations.
Malaysian Airline System Bhd (MAS) expects to be profitable by 2014 under its updated business plan, a year later than its original 2013 target.
Group chief executive officer Ahmad Jauhari Yahya, acknowledging that the national carrier was in a precarious position, said top on its agenda was to push for revenue by maximising the usage of its assets.
“We will carry out our revenue initiatives immediately to move on to the next six and 12 months and then work on structural cost-reduction for sustainability,” he said.
MAS has shelved its earlier plan of having a separate regional airline but will increase frequency to some high-yielding regional destinations.
Other cost-cutting measures planned for the next three years include possible job cuts and possible areas of savings in aircraft maintenance, ownership and utilisation, as well as systems and procurement.
“Our target is to bring down cost by 20 per cent and to push revenue per ASK (available seat-kilometre) by 10 per cent,” Ahmad Jauhari told the media after MAS’ annual general meeting (AGM) in Kelana Jaya here yesterday.
Also present at the press conference was the group’s chair Tan Sri Md Nor Md Yusof.
Ahmad Jauhari said changes in work practice would also be implemented to maximise productivity.
He, however, did not elaborate on the possibility of laying off workers, saying that the airline cannot be distracted from
its primary objective of increasing revenue and that cost initiatives and workforce size fall under the longer-term plan.
The national carrier currently has about 20,000 full-time and
3,000 contract employees. Last year, on the group level, it spent
RM2.33 billion on staff costs, its second highest expenditure after fuel and oil costs at RM5.85 billion.
Ahmad Jauhari said MAS has now begun to retire many of its ageing aircraft, replacing some of the B777 aircraft serving certain routes with A330 jetliners and that under the group’s aircraft utilisation initiative, its narrow-bodied fleet were now flying to further destinations.
On having a separate regional airline, he said until it is stabilised, it would be better for MAS to only have one single airline to maximise the utilisation of aircraft, but he is not closing the door on the plan completely.
Md Nor, meanwhile, said regional frequency will be increased because “there are big opportunities for us in this high growth region. We are now looking at (aircraft) utilisation of 11 hours compared to only nine hours under the present network”.
He said the group is optimistic that it has the right mix of aircraft to build on these short-haul flights.
“We may have legacy issues but we are an established player and we will be working hard to realign our capacity to match where the opportunities are… you will see the lights at our building all night as we push for revenue, revenue, revenue,” said Md Nor, who was MAS managing director from 2001 until 2004.
Earlier, Ahmad Jauhari said the AGM received “good support from shareholders who knew it would be challenging moving forward as far as the business environment goes”.
He said the business plan unveiled in December last year had to be revised after events in the last six months, which included the failed share-swap deal with AirAsia, the losses last year and the continued competitive aviation landscape.
For the year ended December 31 2011, the national airline incurred a loss of RM2.52 billion against revenue of RM13.9 billion.
http://www.btimes.com.my/Current_News/BTIMES/articles/20120622001127/Article/index_html
Category: Malaysia
