Asia

Steady progress continues for Malaysia Airlines Berhad for quarter three 2016

Malaysia B737-800
Boeing

Malaysia Airlines Berhad (“MAB”) has announced its latest quarterly update, in line with its commitment to good corporate governance and transparency. 

MAB showed steady progress in the period July to September 2016 (Q3), with cost control continuing to be the central focus and the airline on target to deliver ahead of budget. The quarter saw a marked improvement in revenue and passenger loads. The airline’s customer service index continued to recover as product improvements were steadily introduced in the quarter.

Malaysia Aviation Group Berhad Group Chief Executive Officer Peter Bellew said:

“The focus in the first half was on reducing costs and improving the customer experience. From July 2016 we began to push hard on revenue generation with more aggressive sales and marketing initiatives. Passenger load factor for Q3 improved to 79% from 69% in Q2 and 74% in the comparative Q3 of 2015. The quarter saw expansion plans with an order of up to 50 new Boeing 737 MAX aircraft. Malaysia Airlines has also expanded its network as it launched nine new routes to China for 2017.  The new lie flat seats and upgraded food in business class on our widebody aircraft has seen a 20% increase in forward bookings for the next six months. Further progress was also made in developing Malaysian leadership succession, with the appointment of Capt Izham Ismail as COO.’’

Passenger revenue for the quarter saw a 12% increase over the previous quarter due to aggressive sales campaigns.  Marketing campaigns were kick-started in August and September after a lull period focusing on the all-inclusive value fares offered with no hidden extras.

A new co-operation programme started with the travel trade in Malaysia and the UK, which resulted in senior management visiting the airline’s top 20 agents to agree on new long-term trade distribution strategies. Load factors also improved at 79.3% system-wide. Targeted marketing also led to a 15% market share increase on our London route from 45% in May to 59% in September.

The airline and Group continued to make progress on cost reduction which will remain a key focus with the renegotiation of contracts and consolidation of suppliers continuing across the board.

The Group saw a reduced net operating level loss (by 7% compared to Q2) which is a positive indication that the turnaround efforts are on the right track. Overall, the airline and the Group are expected to record a loss for this fiscal year but management remains confident that both will surpass targets based on the traction gained in the turnaround efforts thus far.

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