News
MAB reports 68% load factor and AirAsia boosts profit
September 2nd 2016
Malaysia Airlines Berhad (MAB) is still haemorrhaging. Newly-installed CEO, Peter Bellew, last week told Channel News Asia that the airline’s load factor is averaging 68%, way lower than the projected 80% needed to turn a healthy profit. Read More » Bellew hoped to reach the critical 80% mark in the next 18 months.
MAB ordered 25 B737MAX aircraft, plus 25 options, in July. Bellew revealed the airline paid 40% less for the MAX order than it did for another aircraft order years earlier. Airport costs are falling by 35%-40%.
To gain market share, MAB will install a premium economy class on its incoming A350 fleet and will retrofit its six A380s with the new product. MAB has been delisted, thus it does currently not publish its profit and loss accounts.
The situation at AirAsia could not be more different. The low-cost empire built by Tony Fernandes this week reported a net profit of 342 million ringgit ($84.5 million) for the second quarter, up 41% year-on-year. AirAsia Malaysia’s second quarter operating profit more than doubled, to 276 million ringgit, and revenue grew by 23%. Traffic growth of 19% outstripped a capacity gain of 10%.
AirAsia said its unit costs dropped 2% during the accounting period, mainly because of a 21% decline in fuel costs. The AirAsia Group has 75% of its fuel requirements for 2016 hedged at an average of $56 a barrel and 45% of its 2017 requirements at average of $58 a barrel.
"Based on our performance and trend for the first half of the year, we believe 2016 will be a very good year for the company," Fernandes said.
AirAsia’s Thai subsidiary, Thai AirAsia, doubled its second quarter net profit to 768 million baht ($22.2 million), while its Indonesian, Filipino and Indian affiliates narrowed their losses.
