Malaysia Airlines says may raise 2007 profit target of 50 mln rgt
Singapore (XFNews-ASIA) - Malaysia Airlines managing director and chief executive Idris Jala said the company may revise upwards its net profit target for 2007 from the 50 mln rgt set earlier, given the airline's good restructuring progress.
"We are now in the midst of finalizing our budget plan for the new year. If anything, it's going to be an upward revision," Idris said on the sidelines of an aviation conference here.
The airline forecast in September a net profit of 50 mln rgt or 13 mln usd for the fiscal year 2007, rising to 500 mln rgt or 130 mln usd in 2008 when its three-year restructuring program ends.
Idris said Malaysia Airlines passenger volume continues to grow at 5 pct a year, in line with the industry.
Its cargo business, on the other hand, is expected to post a net profit of 150 mln rgt this year, against 40 mln last year.
Cargo accounts for about 15 pct of Malaysia Airlines' total revenue.
"It is on track to achieving that," Idris added.
The airline, however, reiterated that progress would be hampered if the government liberalizes the country's aviation industry before 2008.
If they do so, the lucrative Kuala Lumpur-Singapore route currently controlled by Malaysia Airlines and Singapore Airlines, would be opened to budget carriers such as Malaysia's AirAsia and Tiger Airways of Singapore.
"As far as we are concerned, that three-year (restructuring) period is what we need to fix our business both in terms of our yield, our net worth, our productivity and cost structure," Idris said.
He said he remains hopeful that further liberalization of the industry will not occur until 2008, although contingency plans will be also be developed: "If it is earlier, we have to deal (with it) separately."
Meanwhile, Malaysia Airlines said the delays in deliveries of Airbus 380s will have no impact on the airline's capacity, since the planes were expected to replace existing aircraft.
He added the carrier is still in discussions with Airbus on its delivery.