MAS declared RM244 million in net profit for the financial year ended Dec 31, 2008 amid the global economic turbulence, over-capacity in the Asia-Pacific region and oil price volatility.
The national carrier chalked up RM46 million net profit in Q408, marking Malaysia Airlines’ 10th profitable consecutive quarters since Q306, proving the airlines’ resilience after its strong comeback from RM1.3 billion losses in nine months of 2005.
“This is a solid performance that shows that if we set our minds to do the impossible, we can do it. We maintained our profitability streak and turned a net profit of RM244 million for FY08,” said Managing Director Datuk Seri Idris Jala in announcing the airlines financial year results Thursday.
He said this was against a landscape of one of the toughest business environment where more than 30 airlines have ceased operations and many carriers have announced substantial losses and “only a handful like us have posted profits.”
Idris said the airlines posted profit by focusing on a four-pillar strategy — dynamic pricing, optimising network, managing cost and innovation.
“The good news is we are not alone.
Never waste a good crisis as this is the time to do the impossible which you wouldn’t be able to do under normal circumstances.
“We are very clear that we will continue to be radical as we transform into The World’s five star value carrier,” he said.
This year, the airline is focusing on three key thrusts — serve customers, make money, save money.
In serving customers, he said MAS would improve product and service delivery, offer Value Fares (MHflex, MHsmart, MHbasic and MHlow) which offers customers choices and value.
“Make Money – Dual pricing and aggressive sales, subsidiary and ancillary revenue, strategic alliances and safe money by reducing capacity and cost, and restructure its fuel hedging,” he said.
“Dual pricing is a key business focus for us. We’ve created detailed statements covering all MAS flights.
“This allows us to maximise load and yield for every flight which enables the sales team to aggressively push sales,” Idris said.
In tandem with the dual-pricing strategy, MAS swiftly responded to the falling demand by reducing capacity by 6.4 percent in 2008, he said, adding that it will further reduce capacity by five percent this year.
Idris said the airline will also cut cost further by 7 percent, with a target saving of between RM700 million and RM1 billion, adding to the cost savings of RM2.3 billion from 2006 to 2008.
On possibilities of strategic alliances with other airlines, Idris said: “There will be a tremendous push for consolidation if airlines cannot get out of the red.
“We will continue to seek opportunities which will provide a solid and right platform for Malaysia Airlines,” he said.
Confidently, he said: “I always believe that 40 percent of what happens is within our control and the other 60 percent is beyond our control. We can’t control the downturn and falling demand.
Passenger revenue rose two percent to RM10.9 billion while yield rose 13 percent to 30.3 sen/revenue passenger kilometres (RPK).
Although non-fuel expenditure fell by eight percent to RM8.7 billion due to stringent cost containment measures, it was not enough to offset the 33 percent increase in fuel price which pushed the fuel bill to RM1.9 billion, he said.
Accordingly, the total operating expenditure increased marginally by six percent to RM15.6 billion.
As at Dec 31 2008, cash and bank deposits stood at RM4.6 billion (4th Quarter 2008).
For Q408, MAS posted RM46 million in net profit. Revenue was RM3.7 billion.
Passenger revenue was down seven percent to RM2.8 billion. Yield and revenue per seat numbers continued to increase and were up 14 percent and five percent, respectively.