Malaysia Airlines makes a loss in Q1 to June on higher fuel prices
KUALA LUMPUR (XFNews) - Malaysian Airlines System Bhd (MAS) said it posted a net loss of 280.66 mln rgt for the first quarter to June 2005 compared to a profit of 26.58 mln a year ago, due to higher fuel prices.
It also posted a pretax loss of 274.8 mln rgt in the quarter compared to a profit of 22.5 mln last year.
For the three months to June, MAS said revenue rose 16.6 pct to 2.84 bln rgt.
It added that revenue from international passengers was up 22 pct year-on-year at 2 bln rgt while cargo revenue rose to 607 mln, up 11 pct.
Looking ahead, the national carrier said that so far, demand for travel has remained strong notwithstanding the introduction of fuel surcharges.
"Going forward, the next three months will be the peak demand period especially for the Middle East and Europe," it said, adding however that the high fuel prices, higher interest rates and the recent London bombing may dampen economic growth and travel in developed regions such as Europe for the latter part of the calender year.
It added the recurrence of haze may also impact travel to Malaysia.
The national carrier said that for the airline operation, the July-September quarter is the peak travel period for its markets in Middle East and Europe and high loads are anticipated.
It added that the impact of the ringgit depeg is expected to have a favorable effect on outbound travel from Malaysia.
"Our effort to continue developing and expanding our transshipment business, enhancing our handling processes further and our relentless focus in driving costs down are some of the measures adopted in order for us to stay competitive," it added.
The company said rising fuel and security costs as well as the global economic uncertainties will have a negative impact on the overall freight business globally.
"We anticipate marginal growth in cargo business," it added.
At a media briefing announcing MAS' first quarter results, the national carrier's chairman Munir Majid said fuel cost in the first quarter amounted to 1.1 bln rgt, up by 408 mln compared to a year ago, driven primarily by higher fuel prices.
He added that MAS may review its fuel hedging policy.
Currently MAS is allowed to hedge up to 80 pct of its fuel requirements.
Munir said that as at end June, MAS' cash balance stood at 1.5 bln rgt, down from 2.2 bln a year earlier.