Malaysia Airlines has reported a RM3.9 million operating profit for the first half of 2010, with much of the profit made in Q1 eroded by fuel expenditures in Q2.
The airline posted an operating profit of RM289.5 million in Q1 2010 which compensated for the RM285.6 million operating loss in Q2 2010. The second quarter demonstrated strong passenger and cargo performance compared to the same quarter last year, with operating profit improving by 33 percent over the comparison period.
Boosts from the economic recovery were felt in passenger revenue, which was up 22 percent to RM2.3 billion in Q2 2010 from RM1.9 billion last year. Traffic was up 18 percent and seat factor rose 8.2 percent from a low of 65.8 percent experienced in Q2 2009.
However, these operational gains were diminished by a steep 44 percent rise in fuel expenditure as a result of a global price hike and increased consumption to meet the five percent expansion in capacity. This resulted in RM1.1 billion of expenditure - an increase of RM338 million compared to the second quarter of 2009. Combined with a nine percent increase in non-fuel expenditure, the airline witnessed a RM285.6 million operating loss for the quarter.
"While we are doing the right things, and this is reflected in the improved operational performance for Q2 which is traditionally our weakest quarter, we have instituted additional measures to recover more of the fuel cost increase. The volatility of the fuel price remains a key challenge for the industry," Managing Director and CEO, Tengku Dato' Azmil Zahruddin said.
On the operational front, Mr Azmil said the advance bookings for the second half of the year are strong. "The action is in our back yard as the Asia-Pacific region is demonstrating strong growth. For 2Q10, our passenger numbers are up 14.7 percent. We are recording higher than pre-economic crisis seat factor. As the positive trend is holding up for the rest of the year, we will continue to focus on increasing yield, as well as gaining premium customers. We have put in place an aggressive sales programme to increase corporate sales."
In other aspects, MASkargo continued to demonstrate strong performance with three consecutive quarters of profits. Freight grew 29.8 percent in June 2010 alone, with the uptrend expected to continue, according to the International Air Transport Association (IATA).
The airline has ordered up to 55 B737-800s and 25 A330-300s. A total of three B737-800s will be received in 2010; one each in October, November and December.
