MALAYSIA Airlines (MAS) shares soared yesterday after it reported on Tuesday a near-tripling of operating profit to RM146.3mil for its fiscal third quarter ended Dec 31, 2002, beating most analysts’ forecasts.
The bird flu outbreak in the region did not appear to have had an impact on bookings and revenues, the airline said. The airline is now more cash-rich with RM1.891bil of funds on its balance sheet as at Dec 31, 2003.
Trading in MAS shares were brisk yesterday as some brokerages raised their forecasts for the full year in anticipation of another good quarter to March, and the counter ended the day 30 sen or 6.5% higher at RM4.90.
Analysts said they were encouraged by the more optimistic outlook and brisker pace of recovery for the airline industry in general. MAS passenger load factor for January was close to 75%, up from 69% in its fiscal third quarter, and it expects to see “double digit” growth in passenger numbers in the next quarter ending June.
OSK Research Sdn Bhd said in a report that public interest in air travel was evident from the MAS travel fair last weekend during which the airline chalked some RM35mil in sales.
The national carrier had also started hedging fuel, its major operational expense, with a consequent gain of RM43.3mil as at Feb 10, 2004, OSK Research noted.
The airline’s plan to increase capacity on regional routes and build up its cargo business has also drawn favourable comment from analysts who believe that these measures would help MAS to counter the competition from new low-cost carriers.
ING Financial Markets, which has maintained a “buy” on MAS shares, said the impact of low-cost carrier AirAsia was “muted” as it only affected MAS' short-haul operations which accounted for only 14% of revenue and RM65mil of net profit.
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