SEPANG: Malaysia Airlines Bhd (MAB), which has been focusing on its yields, has reported a year-on-year yield (YoY) improvement of 6.6% in the first quarter ended March 31 despite the significant competition in both international and domestic sectors.
Its passenger yield stood at 22.6 sen in the first quarter compared with 21.2 sen in the same quarter last year.
The flag carrier’s revenue per available seat kilometre (RASK) has also shown improvements, posting a healthy growth of 3.5% YoY with overall total revenue also growing by 2% YoY.
“Our performance is on budget for quarter one and the concerted focus on yield, which began in the second half of the previous year, continues to see results with an overall improvement in yield and RASK,” Malaysia Airlines Group (MAG) CEO Izham Ismail said in a statement.
“I am heartened by the relatively encouraging first quarter of 2018, especially after a challenging FY2017 which saw the company underperform against budget. Our performance last year was hampered by an adverse exchange rate swing which saw the depreciation of the ringgit against the US dollar (USD).
“With more than 50% of our cost structure in USD, the depreciation had a significant impact on the company’s overall financial performance. Nevertheless, taken on aggregate, the company has made progress on the execution of the Malaysian Airlines Recovery Plan (MRP). This includes an improved cost base for the airline, bringing it in line with its peer network airlines,” he said.
Despite improvements in the quarter, Izham said the airline was preparing itself for a tough year ahead with competition and exchange rate volatility.
He said escalating fuel prices remain a particular concern, up almost 100% from early 2016.
“Moving forward we will continue to drive yield by focussing on the premium segment to cushion the airline from rising costs. Overall, we expect to see improvements in our performance in the later part of this year and against this backdrop, we are working hard to deliver sustained profitability in 2019,” he added.
Passenger load factor for Q1 stood at 75.4% from 79.4% in 1Q17. The number of passengers carried dipped to 3.2 million in Q1 from 3.6 million in the same corresponding quarter last year.
The carrier said a total of 43 fuel initiatives, with target savings set at RM220mil, were registered in this quarter and will be tracked for 2018.
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