Malaysia Airlines (MAS) made a pre-tax loss of M$439 million ($136 million) in the quarter ended 31 March, a reverse 58% worse than that it suffered in the same period of 2013.
Earnings before interest, tax, depreciation and amortisation (EBITDA) were negative to the tune of M$101 million, after a positive result of M$30 million a year ago.
Revenue rose 4.2% to M$3.53 billion, but this was outweighed by a 5.6% rise in operating expenses, to M$3.7 billion. Depreciation and finance costs were also higher.
The Oneworld carrier’s “total comprehensive loss” came in at M$518 million, compared with M$265 million in the same period last year.
MAS says the disappearance of flight MH370 on 8 March “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%.
In addition, the weakening of the Malaysian ringgit against the US dollar drove fuel costs up 14%, which was offset partly by savings in lease and maintenance costs as a result of the airline’s fleet renewal programme.
As for its future prospects, MAS says the disappearance of MH370 has continued to affect sales, especially in China, where sales fell 60% in March. It expects to see “positive impact on sales later in the year”, but admits that it will fall short of earlier targets.
“The reality of our situation following the MH370 incident and the challenging business environment has made it even more imperative and urgent that the group re-look at its business model and plans going forward to ensure sustainability of the business,” says the airline. “A thorough review of operational processes and plans is ongoing to ensure a stronger Malaysia Airlines emerges following the MH370 crisis, to deal with the harsh business environment that we operate in.”
Despite the loss, the carrier’s cash and cash equivalents rose between 31 March 2013 and the same date this year, from M$2.3 billion to M$3.25 billion. However, they were higher on 1 January 2014, at M$3.74 billion.