Malaysia Airlines reports ‘challenging’ 3Q2018, aims to stabilise crew shortage by early 2019

    Malaysia Airlines described (14-Dec-2018) 3Q2018 as “challenging”, reporting “stiff competition, rising fuel prices and adverse foreign exchange movements, further exacerbated by crew shortages”. The carrier reported pressure on yield, due in part to the inability to upgauge services to widebody aircraft due to crew shortages, which impacted revenue. The airline implemented an “extensive” recruitment exercise and an “aggressive” cadet enlistment and training programme and is confident the situation will be stabilised by early 2019. The carrier reported the following details for 3Q2018:

    • RASK increased 1.4% year-on-year, mainly driven by a 29% increase in cargo revenue;
    • Recovery in international business continued, with international load factor improving 3.3ppts to 81.7%;
    • OTP increased 8% as a result of improved operational efficiencies in engineering and ground handling;
    • ‘Project Amal’ division handled more than 15,000 Hajj pilgrims with A380 aircraft between Jul-2018 and Sep-2018;
    • Received sixth A330-200 aircraft. 10 Boeing 737 MAX 8 aircraft due for delivery in 2020;
    • Customer satisfaction index increased 7% and net promoter score increased 21 points, driven in part by call centre improvements.

    Malaysia Airlines Group CEO Izham Ismail said: “The third quarter continued to be challenging with volatile fuel prices, unfavourable foreign exchange movements, as well as overcapacity in key markets compounded by the pilot shortage. Nevertheless, in line with our emphasis on customer experience, I believe our efforts in that area continue to show positive traction… We are maintaining a strong focus on cost management and will continue to invest in aspects of the customer experience that deliver a competitive edge”. He added: “We are expecting to finish 2018 by reducing the losses of the previous year. Moving forward, 2019 looks similarly challenging but we remain committed to improving performance and reducing costs whilst managing external factors beyond our control”.