MASkargo expects network expansion to raise revenue by 20%


  • Business
  • Thursday, 08 Apr 2004

MALAYSIA Airlines Cargo Sdn Bhd's (MASkargo) network expansion drive, which is targeted to increase capacity by over 30% for the year ending March 31, 2005 from an estimated 3,238 million cargo tonne kilometre (freighter and belly) in 2004, is expected to increase revenue by more than 20%, said Malaysia Airlines senior general manager (cargo) J. J Ong.  

“Although net earnings won't increase by as much, we are still targeting a double-digit earnings growth,” he told a media briefing in Kelana Jaya yesterday. 

Ong said with the targeted jump in revenue, MASkargo was working towards contributing 25% of Malaysia Airlines' total revenue in FY05, up from the current 23% to 24%. 

J.J.Ong

The expansion, he said, also involved the introduction of three B747-200 freighters to the company's existing network of five aircraft over the last six months.  

As part of the network expansion, the company has introduced four new freighter destinations – Manchester, Basel, Bangkok and Bangalore – for its Northern Summer 2004 schedule from March 28 to Oct 30.  

With the introduction of these new stations, the company now operates 14 times to Europe weekly compared with 10 previously. 

MASkargo's position in Shanghai will also be strengthened with an increase from six flights per week to eight. By the end of April, the company will operate weekly freighter services into Beijing. 

Ong said MASkargo also had plans to add Milan and Beirut as new freighter destinations in the next three months. 

“Last financial year ended March 31, 2004, was a pretty good year for us – we were very close to the RM100mil mark in terms of profit and turnover is expected to surpass RM2bil,” he said, adding that MASkargo was looking towards a better FY05 as the potential for freight in the next 12 months was good.  

He said the company was optimistic of a better performance as most countries had better gross domestic product growth projections and most businesses involving airfreight such as disk drives and computers were showing good growth numbers. 

Ong said as production increased, demand for raw materials was also expected to increase thus auguring well for the logistics business.  

“With so many players in the market, yield is a challenge. We are focusing on driving down unit costs through efficiency as well as economies of scale through our growth in capacity.''  

Ong also said the capacity of MASkargo's warehouse in KLIA would be more than doubled to 1.5 million tonnes in three years from the present 650,000 tonnes. 

On whether the fifth freedom rights offered by Hong Kong, which allows an airline to pick up passengers or cargo in Hong Kong before flying to a third country, for instance the United States, Ong said MASkargo would not be applying for the rights in the immediate future. 

“If given an option, we would be more interested in doing it from China. In addition, we are still looking at penetrating the US market as there are still a couple of issues to be ironed out before we make a move into that area,” he said. 


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