Malaysia Airlines (MAS) has posted a significant loss for 2013, as strong competition and currency issues impacted the carrier.
The airline slumped to a net loss of MYR1.17 billion (US$356 million) for the 12 months ending 31 December 2013. This compounds the MYR2.5bn and MYR433m net losses suffered in 2011 and 2012 respectively.
MAS attributed the poor performance to stronger competition, as well as depreciation and currency factors. The full-year impact of depreciation was MYR817m, compared to MYR548m in 2012, while foreign exchange losses totalled MYR194m, compared to a MYR190m gain in 2012.
“We knew 2013 would be a challenging year of intense competition which would impact yield. Knowing this, our focus was to drive revenue,” said MAS’ group CEO, Ahmad Jauhari Yahya.
“Our efforts saw the airline’s revenue increase 11%, whilst traffic went up 27% on capacity that increased only 17%. Our average seat [load] factor improved 6.3 percentage points to 81% compared to the previous year.”
Total full-year revenues increased 10% to MYR15.1bn, while costs also rose 10% to MYR14.9bn. Jet fuel accounted for 39% of group expenditure, and MAS said that while the average price of fuel declined slightly, the weakening ringgit offset the gains. MAS’ passenger traffic surged 28.5% to 17.2m last year.
By the end of 2013, the group’s fleet comprised 148 aircraft, having taken delivery of 21 new aircraft last year. And while MAS is actively revamping its fleet, Ahmad Jauhari said this investment was necessary to keep up with intense regional competition.
“Many airlines are investing heavily in new aircraft and new products and services. This has resulted in a significant increase in capacity and aggressive competition in fares and value proposition to attract and keep market share,” he said.
“We maintain our commitment to remain competitive, to deliver an exceptional quality product and service with safety as our utmost priority, and to provide returns to our shareholders in the long-term,” Ahmad Jauhari concluded.