Malaysian carrier in red after making fuel derivative loss

Malaysia Airlines (MAS) reported a net loss of 299.6 million ringgit for the three months ended Sept 30 compared with a net profit of 38.1 million ringgit in the previous corresponding period mainly due to the loss of 202 million in derivative mark-to-market on fuel, reported local business daily the StarBiz. ($1=3.4 ringgit)

At its results briefing yesterday, managing director/chief executive officer Tengku Datuk Azmil Zahruddin said the fourth quarter continued to be tough although there were signs of improvement in passenger traffic.

“Forward bookings for fourth quarter have been very encouraging. We are seeing some signs of recovery but yields remain under pressure. “Our strategy is to continue to strengthen our domestic and Asean operations and position ourselves for the recovery and growth of the long haul sector,” he said.

For the third quarter, the carrier posted pre-tax loss of 297.1 million ringgit from a pre-tax profit of 19.7 million ringgit a year ago, while turnover dropped to 2.96 billion ringgit from 4.1 billion ringgit before. Its loss per share stood at 17.93 sen from an earnings per share of 2.28 sen.

MAS narrowed its operating loss to 73 million ringgit for the third quarter from 421 million ringgit losses reported in the preceding quarter, due to aggressive sales campaigns and highly competitive pricing which resulted in seat factor gaining 6.9 percentage points to 76.7 percent.

The average yield for the period stood at 23 sen. Its total operating expenditure decreased by 26 percent. Fuel cost and non-fuel cost dropped by 50 percent and 4 percent respectively.

The national carrier carried 3.3 million passengers during the quarter, the highest registered since early 2008. Its domestic operations remained strong with traffic volume up 20 percent.

For the nine months ended Sept 30, MAS posted a net loss of 119.5 million ringgit against a net profit of 198.1 million ringgit previously. Revenue was lower at 8.3 billion ringgit compared with 11.6 billion ringgit before while net loss per share stood at 7.15 sen.

Year-on year, the airline reported an operating loss of RM73mil compared with 44 million ringgit operating profit previously. Despite MAS’ 202 million ringgit loss in derivative mark-to-market on fuel, Azmil said it would continuously review its competitive fuel hedging strategy.

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