ANALYSIS: Asian carriers post dismal first quarter

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Asia Pacific carriers generally had a tough first quarter, posting operating losses of $335 million compared with an operating profit of $149 million for the first three months of 2013.

A key theme in the various carriers’ earnings was strength in the US dollar, which meant fuel prices remained at challenging levels in local currency terms.

By most measures Malaysia Airlines was the biggest loser among carriers reporting first quarter results. Its net loss of $134 million accounted for over half of the combines loss figures posted by Asia Pacific carriers reporting for the period. MAS also swung to an operating loss of $31 million, well off its modest $9 million operating profit in the first quarter of 2013.

Aside from the normal issues plaguing the region’s carriers (competition, fuel, etc.), MAS suffered the tragic disappearance of MH370 on 8 March. This, it said, “had a dramatic impact” on the traditionally weak quarter, with long-haul passenger bookings affected by a higher than usual number of cancellations. Yield decreased 9%, as load factor slipped 5.2 percentage points to 76%.

Thai Airways also had a bad first quarter, plagued by political unrest in Bangkok, which hurt demand form North Asia, and heightened competition. Thai posted a net loss of $80 million, a dramatic collapse from its net profit of $254 million in the first three months of 2014.

Chinese carriers also had weak quarters, with Air China, China Eastern Airlines, and China Southern Airlines all posting operating losses. Only Hainan Airlines enjoyed a decent quarter, with operating profits of $28 million, up 7.6% from a year earlier, and a net profit of $29 million, down 12% from a year earlier.

Three major carriers – Singapore Airlines, All Nippon Airways, and Japan Airlines – also posted full year results for the 12 months to 31 March. All three saw their annual net and operating profits decline, mainly owing to persistently high fuel prices and competition.

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