MAS suffers loss in 3Q2009; Jetstar to receive 25 of Qantas’ 50 B787 order

Malaysia Airlines’ shares slipped 1.9% yesterday, upon the release of the carrier’s financial results for the three months ended 30-Sep-2009.

The carrier suffered a USD89 million loss in the third quarter, mainly attributed to USD60 million in losses on derivative contractions, but also impacted by a 27% reduction in revenues in the period as the carrier significantly reduced fares to a “not sustainable” level.

Passenger yields (including fuel surcharges and admin fees) slumped 29% in the period, to USD 6.65 cents, while cargo yields were down by an even greater rate, falling 33% to USD 19.17 cents.

However, the reduced fares stimulated demand, with the airline handling 3.3 million passengers in the quarter, the highest since early 2008, with load factors improving by double-digits to 76.7% compared to 65.8% in 2Q2009.

The carrier added its outlook for 4Q2009 remains challenging, but there are early signs of improvement in both passenger and cargo traffic. Meanwhile, advance bookings for 2010 have also improved year-on-year, according to the carrier, and it now plans to expand frequencies on profitable domestic and Southeast Asia services.

Jetstar to receive 25 of Qantas’ 50 B787 order

Qantas (shares down 0.4%) confirmed 25 of its 50 B787s on order would be transferred to Jetstar. Qantas plans to deploy the first delivery of B787-800s on domestic services, replacing its B767 fleet from 2014, while Jetstar plans to utilise its B787-900s to expand into Europe, North America and new North Asian destinations from 2013. The LCC reportedly plans to launch operations to Europe from 2010, after it takes delivery of five A330s, potentially with services to Munich, Milan and possibly Paris.

See related article: Qantas to boost fleet expenditure; undertaking ambitious savings programme, hoping to rebuild yields

JAL shares up after the previous day’s low

Japan Airlines’ shares rose 3.5% to JPY90 on Wednesday, a day after its shares fell to a record low on growing investor concerns that Asia's largest airline by revenue could face bankruptcy as it struggles to reach an agreement on pension cuts.

According to Mitsubishi UFJ Securities, “the JAL issue is basically very similar to that of GM, but the talk is that it won't be allowed to fail”.  

Also benefiting JAL is an indication by Japan Transport Minister, Seiji Maehara, that Japan and the United States would conclude an open skies aviation liberalisation agreement by the end of 2009. The fifth - and possibly final - round of negotiations is to be held early Dec-2009 in Washington.

Asia Pacific selected airlines daily share price movements (% change): 25-Nov-09