Mas Analysis

Malaysia Airlines Suffers Heavy Losses In 2011 On Higher Fuel Cost & Provisions

4th Quarter 2011 ended 31 December 2011

Group Revenue: RM3.68 billion

Group Expenditure: RM4.99 billion

Net Loss: RM1.28 billion

Capacity (ASK) up 1%; Traffic (RPK) down 6%; Seat Factor down to 72.5%

Financial Year 2011 ended 31 December 2011

Group Revenue: RM13.90 billion

Group Expenditure: RM16.20 billion

Net Loss: RM2.52 billion

Capacity (ASK) up 7%; Traffic (RPK) up 5%; Seat Factor down to 75%

Subang, Wednesday, 29 February 2012: Malaysia Airlines today reported an unaudited net loss of RM1.28 billion for the fourth quarter ended 31 December 2011, bringing the Group’s full year results to a net loss of RM2.52 billion for the financial year ended 31 December 2011 on the back of a marginal increase in Group revenue (up 2% to RM13.90 billion) and carrying 1.3 million more passengers (totalling 17 million) compared to the previous year.

“The bottom-line Group losses for 2011 underscore the imperative need for Malaysia Airlines to immediately adopt strong measures to stop the bleeding. These include staff redeployment, increasing productivity and efficiency, relentless cost control and making further route reviews. We are also implementing an aggressive sales & marketing strategy”, said Ahmad Jauhari Yahya, Malaysia Airlines Group Chief Executive Officer.

“The accounts for the year under review recognise provisions and escalating operational costs which although painful, gives us a holistic snapshot of the organisation. With full knowledge of our actual position, we will be better prepared to move forward,” added Ahmad Jauhari.

The Group’s full year performance was severely impacted by a 21% increase in expenditure over the previous year (2011: RM16.20 billion versus 2010: RM13.41 billion) attributed to a 33% year-on-year increase in fuel cost (2011: RM5.85 billion versus 2010: RM4.38 billion) and a 15% increase in non-fuel expenses...