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Week 42


Malaysia Airlines posts negative 9% margin

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October 18th 2019

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Small improvement is much worse than THAI’s negative 5.8% margin. Read More »

Malaysia Airlines (MAS) finally has disclosed its performance for 2018. MAS made a small improvement for the year, reducing 2017’s negative 9.4% margin to negative 9% in 2018. Limited financial information was available as the top line performance was disclosed to the Companies Commission of Malaysia.

The carrier’s net loss after tax decreased 2.5% to RM791.71 million (US$189 million) from RM812.11 million a year earlier. Revenue decreased a slower 0.8%. MAS has not disclosed full statistics, but the results indicate the industry’s large fuel cost increase was offset by significant cost reductions and some revenue improvements.

Load factor was constant at 78% compared with Malaysia AirAsia (85%) and Malaysia AirAsia X (81%). Airport traffic data revealed MAS carried 13.5 million passengers for the year, down from 14 million in 2017. MAS said revenue per available seat kilometres increased 2%.

Regional peer, Thai Airways International (THAI) also has been in the spotlight for its weak finances. In 2018 it reported a negative 5.8% margin, but it was considerably better than MAS and reflected a stronger outlook than MAS. Most of MAS’s fleet is young. THAI’s aircraft are older so re-fleeting would bring improvements to the flag carrier.

MAS competes with the strong AirAsia Group. THAI has no singular rival. The Bangkok-based airline has direct and indirect investment in two prominent Thai carriers, Nok and NokScoot, respectively, although it is not strategically aligned to them. MAS has long struggled to reduce costs and improve revenue, whereas these initiatives are young at THAI.

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