Malaysia Airlines reports ‘steady progress’ in 1Q2018, expects ‘tough year ahead’

    Malaysia Airlines reported (03-Jul-2018) “steady progress” in 1Q2018, highlighting yield improvement of 6.6% year-on-year, despite “significant” domestic and international competition. RASK increased 3.5% and total revenue increased 2%. Load factor reached 75.4% with a “moderation” in domestic load factor due to a focus on higher yield passengers. OTP reached 76%, an improvement of 2.7% from 4Q2017. Malaysia Airlines Group CEO Izham Ismail said the carrier made progress on its recovery plan, including improving its cost base to be “in line with its peer network airlines”. Mr Izham said: “Our performance is on budget for quarter one and the concerted focus on yield, which began in the second half of the previous year, continues to see results with an overall improvement in yield and RASK. I am heartened by the relatively encouraging first quarter of 2018, especially after a challenging FY2017 which saw the company underperform against budget”. The airline expects 2Q2018 to be “weaker and more challenging due to the soft demand during Ramadan”. Mr Izham added: “The airline is preparing itself for a tough year ahead with competition and exchange rate volatility. Escalating fuel prices remain a particular concern, up almost 100% from early 2016. Moving forward we will continue to drive yield by focusing on the premium segment to cushion the airline from rising costs. Overall, we expect to see improvements in our performance in the later part of this year and against this backdrop, we are working hard to deliver sustained profitability in 2019”.