KUALA LUMPUR: Airlines in Malaysia had a good 2017, thanks to an accommodating operating environment, given the strong tourism growth and a continued depressed oil market throughout most of the year.
Minority Shareholder Watchdog Group (MSWG) chief executive officer, Devanesan Evanson said furthermore, the strengthening of the ringgit vis-à- vis the greenback since early 2017 also favoured airlines with regard to fuel and other operating costs priced in US dollar.
“Among the key challenges faced by airlines in Malaysia during the year were increasing operating costs and intensifying competition from capacity expansion,” he told Bernama.
The International Air Transport Association (IATA) on the other hand, said that one bright spot for Asia-Pacific carriers was in freight, whereby a strong uptick in the cargo markets had provided support for the region with regional carriers accounting for almost 40 per cent of global cargo capacity.
During the third quarter of the year, Malaysia Airlines’ revenue average seat per kilometer (RASK) improved by two per cent year-on-year, on the back of a higher passenger revenue of 3.5 per cent, with load factors remaining stable at 77.5 per cent.
Echoing similar sentiment towards demand for travel, AirAsia said the airline managed to deliver a set of very positive results for the third quarter, despite it being a seasonally weaker quarter of the year, with RASK averaging at 14.76 sen and load factor at 87 per cent.
On prospects for 2018, Devanesan said the performance of airlines would likely continue to be good if tourism also continued to grow barring any significant increase in fuel prices.
However, he said there was a potential fear that any substantial delivery of aircraft to correspond with the aggressive growth plans of airlines, might result in overcapacity and hurt profits.
Malaysia Airlines received its second Airbus A350-900 aircraft, out of six orders on Dec 23 to facilitate further growth plans, improve customer experience and generate better revenue.
On top of that, the national carrier, in September, signed a memorandum of understanding with Boeing in Washington DC to acquire 16 aircraft, namely eight 787 Dreamliners and eight 737 MAXs, which would give the airline an unmatched fuel efficiency, economics and a superior passenger experience.