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Malaysia Airlines poised to enter growth phase, but yield concerns persist. Where to with alliances?

23-Feb-2010

Malaysia Airlines (MAS) is entering a rapid fleet and network growth phase, emboldened by fresh funding support under a well-supported rights issue and a return to profitability (albeit slight) in 4Q2009. Investors liked the result, sending MAS’s shares up over 5% yesterday. But a 30% year-on-year yield collapse in the fourth quarter, resulting in a 25% slump in revenue is a major concern as the carrier embarks on an aggressive growth phase. Will the wheels just spin faster with little to show on the bottom line over the next few years? And where is MAS at with its alliances strategy? [1690 words]

Unlock the following content in this report:

Subheadings:

  • Fourth quarter ”improvement”: Discounting creates volume
  • Yields of an LCC, costs of a network carrier
  • "Earned the licence to grow" again in 2010
  • Next year will see large changes
  • Outlook: “Exciting times ahead” for MAS, but will the profits flow? And what about alliances?

Graphs and data:

  • Malaysia Airlines operating profit margin and net profit margin: 1Q09 to 4Q09
  • Malaysia Airlines’ operating and net profits: 1Q2008 to 4Q2009
  • Malaysia Airlines operating profit margin (left) and net profit margin (right): 2006 to 2009
  • Malaysia Airlines passenger numbers growth by domestic and international: Jan-08 to Dec-09
  • Malaysia Airlines revenue growth and operating costs growth: 2005 to 2009
  • Malaysia Airlines operating profit margin by business activities in 2009
  • Malaysia Airlines’ fleet deliveries: 2010 to 2016
  • Malaysia Airlines’ projected fleet age relative to peers: FY2008 to FY2015
  • Malaysia Airlines’ future fleet deployment
  • 2010 network plan
  • AirAsia’s India network plans: 2010
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