MAS expects RM800mil revenue boost for 2004

  • Business
  • Friday, 28 Feb 2003


MALAYSIA Airlines (MAS) expects a RM800mil revenue boost for the financial year (FY) ended March 31, 2004, on expectations of a double-digit growth in regional passenger traffic, mainly from China, India and Singapore. 

At a briefing to journalists and analysts yesterday, MAS managing director Datuk Md Nor Yusof said he was forecasting an 11% rise in international passenger capacity or a 0.7% rise in load factor that will translate to the rise in revenue. 

Datuk Md Nor Yusof

MAS which has forecast a profit this year (FY2003) for the first time in six years, reported on Tuesday a net profit for the second straight quarter – RM250mil, on the back of RM6.72bil revenue – following its asset unbundling exercise and a major debt restructure. 

The airline reported revenue of RM8.3bil for FY2002, and analysts have forecast revenue of RM8.9bil for FY2004. 

Passenger load factor registered was 66% for FY2002, and 70.1% for the first nine months of FY2003. 

Md Nor said: “We are sufficiently confident to make (such) reasonable projections.” 

MAS has allocated much of its capacity to the region which is said to be the fastest growing in air travel globally.  

The airline is scheduled to mount additional flights to several destinations within the Orient, Asean and Indian sub-continent as part of its summer schedule that begins at the end of March. 

MAS' move to put greater focus to the Asia Pacific region is to mitigate any impact from a war on Iraq.  

Forward bookings were showing double-digit growth and MAS also expects to garner about RM40mil in sales during the forthcoming Matta travel fair. 

Meanwhile, MAS has set aside RM1.2bil for capital expenditure (capex) in FY04. Of this, RM700mil will be used for seat and interior upgrades for its B-747 and B-777 aircraft, RM200mil to upgrade its IT platform, and RM50mil for equipment revamp at airports.  

The funds for the capex would be internally generated. 

Asked if MAS would be outsourcing its IT requirements in the future, a MAS official said that was being looked and a decision would only be made in a few months.  

MAS has also made contingency plans in case war erupts in Iraq.  

Among other things, it has hedged 35% of its fuel requirements for the first quarter of this year.  

It is also studying ways to reduce fuel costs, which last year accounted for about 20% of total expenditure.  

Every one US cent rise in fuel cost translates to RM20mil in additional fuel costs per year for the airline.  

MAS would re-route its flights into Europe via Saudi Arabia or Afghanistan in the event of war.  

“While (the war) is a concern, it is not too alarming for the market we are serving. We will consolidate the bookings if the need arises,” Md Nor said.  

He also disclosed that MAS had on Monday presented its business plan for this year and next year to its board.  

Its key points are to improve yield, make a stronger regional presence, promote customer loyalty, and push cargo sales.  

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