Malaysia Airlines (MAS) has reported a second quarter net loss of 535 million ringgit ($168.3 million) as higher fuel prices and consumption hit its bottom line.
The loss for the three months to 30 June, which includes a mark-to-market loss of 217 million ringgit from fuel hedging, is a sharp drop from the net profit of 875 million ringgit that the carrier reported a year before.
Revenues increased by 26% to 3.21 billion ringgit. However, a 44% jump in fuel costs means that total expenditure was 17% higher at 3.5 billion ringgit. Malaysia's flag carrier posted an operating loss of 286 million ringgit, an improvement of 33% from the 426 million ringgit it lost a year before.
Passenger traffic increased by 18% during the quarter and the seat capacity was 5% higher, says MAS. The load factor was 8.2 percentage points higher at 74%, it adds.
"While we are doing the right things, and this is reflected in the improved operational performance for the second quarter which is traditionally our weakest quarter, we have instituted additional measures to recover more of the fuel cost increase. The volatility of the fuel price remains a key challenge for the industry," says CEO and managing director Azmil Zahruddin.
Looking ahead, MAS says that advance bookings for the second half of the year remain strong.
"The action is in our back yard as the Asia-Pacific region is demonstrating strong growth," says Azmil. "We are recording higher than pre-economic crisis seat factor. As the positive trend is holding up for the rest of the year, we will continue to focus on increasing yield, as well as gaining premium customers. We have put in place an aggressive sales programme to increase corporate sales."