Malaysia Airlines (MAS) is looking to grow its operations again next year after two years of downsizing.

Government-owned MAS began implementing a sweeping restructuring early last year that covers a sizeable workforce reduction, a major network downsizing and the sale of non-core assets. But in releasing significantly improved earnings for 2006 the carrier has revealed it is now finalising a five-year network plan under which it will be boosting passenger services "from 2008 onwards".

"In line with this, MAS is considering increasing its capacity by purchasing and leasing new aircraft," it says. "This will improve the airline's financial standing while positioning it on a solid platform to pursue profitable growth."

MAS for years considered acquiring new turboprop or regional jet aircraft, in addition to replacing its Boeing 737-400 fleet. However late in 2005 it suspended all new-aircraft order studies to focus on cost-cutting efforts and its only outstanding order is for six Airbus A380s through parent company Penerbangan Malaysia, which owns all the aircraft in the airline's fleet.

The airline's operating loss was reduced to 302.8 million ringgit ($86 million) in 2006 from 1.15 billion ringgit in 2005, on strong revenue growth and restructuring benefits (see page 71). Managing director Idris Jala says that for 2006 the carrier "exceeded all our BTP [business turnaround plan] financial targets for Q1, Q2, Q3 and Q4" and it has "succeeded in significantly reducing our annual losses through revenue enhancements and cost reductions".

Source: Airline Business