MAS extends profitability deadline by one year
KUALA LUMPUR, June 21 — Malaysia Airlines has moved its original target to return to profitabilty to 2014 from the original target of 2013 said its CEO Ahmad Jauhari today.
The airline had posted larger than expected first quarter losses despite unveiling a business turnaround plan in December last year.
“We give ourselves till 2014 to return to profitability,” he said in a press conference here after the company AGM.
MAS posted a first quarter core net loss of RM347 million, or 87 per cent of the full-year consensus net loss forecast of RM401 million, prompting research houses to revise the airline's net losses
for the year up dramatically to as much as RM858 million as compared with previous estimates of RM521 million.
Ahmad said that the airline will now focus on maximising revenue while implementing structural cost reductions.
Asked about the possibility of the departure of more key executives and its impact on the turnaround plan, the MAS CEO said that “people come and people go. If they go, we will have to find replacements.”
Asked whether AirAsia will be using MAS maintenance, repair and overhaul (MRO) services following the unwinding of the share swap agreement, Ahmad said that “we are ready to serve any customers.”
He also said that the original plan for the new A380 aircraft was to serve both London and Sydney and that the plan for now was to have the aircraft fly only to London but would relook at Sydney at a later date.
“The capacity might be too big for Sydney,” he said.
Ahmad also said that there were no immediate plans to revive Firefly's jet services which were terminated following the share swap with AirAsia but that MAS would consider having an intermediate cost airline like Singapore Airline's SilkAir.
“Firefly will concentrate on turbo-prop operations,” he said.
Ahmad declined to discuss job cut numbers, saying it was “sensitive” but that manpower costs will be dealt with.
He acknowleged that MAS had returned to its “original size” despite a separation scheme initiated a few years ago that reduced staff numbers by 3,000.
MAS currently has about 20,000 full time and 3,000 part time staff.
Ahmad said that MAS will “sweat” its assets to maximise utilisation.
“We want to utilise assets more,” he said. “On previous networks, utilisation was low.”
He added that the target was to reduce cost per available seat kilometer (CASK) by 20 per cent and increase revenue per available seat kilometer (RASK) by 10 per cent.