MAS delays return to profit target
Posted on June 23, 2012, Saturday
KUALA LUMPUR: Loss-making national carrier Malaysia Airlines Systems Bhd (MAS) has put back its target to return to profitability from next year to 2014 following a failed tie-up with rival budget carrier AirAsia.
The two airlines called off the strategic share swap agreement, aimed at turning around MAS, in early May amid pressure from its employees union which was concerned about job cuts.
MAS said after its annual general meeting Thursday that a ‘renewed’ business plan – without the cooperation deal – included cutting costs to return to profit by 2014.
“We give ourselves up to 2014 basically to return to profitability, a change from our earlier target by 2013,” chief executive officer Ahmad Jauhari Yahya was quoted as saying by the national news agency Bernama.
The troubled airline said it aimed to cut operational costs by 20 per cent within three years through measures including as axing loss-making routes and concentrating on lucrative routes in Asia as well as possible job losses.
The airline also aims to increase revenue per available seat-kilometre by 10 per cent, it said. An official confirmed the comments yesterday.
The company had announced a series of plans to overcome its financial difficulties after scrapping the share swap deal, under which AirAsia had agreed in August to buy 20.5 per cent of MAS.
Earlier this month, Malaysia Airlines said its RM2.5 billion (US$786 million) Islamic bond issue to raise funds had been fully subscribed.
In February MAS admitted it was ‘in crisis’ after losing RM2.52 billion last year largely due to soaring fuel costs.
For the quarter ended March 31, MAS reported its fifth consecutive loss, of RM171.8 million, although that was an improvement in the RM242.3 million loss a year earlier. — AFP