ID :
188923
Thu, 06/16/2011 - 06:36
Auther :
Shortlink :
https://oananews.org//node/188923
The shortlink copeid
MAS OPTIMISTIC OF REMAINING BOUYANT DESPITE LOOMING CHALLENGES
Despite vast challenges facing the airline industry, Malaysia Airlines Systems Bhd or MAS, is optimistic of remaining bouyant.
Not denying the challenges posed especially by spiralling oil prices, Chairman Dr Mohd Munir Abdul Majid said: "With oil prices cutting into the airline's margins and, of course, the (sluggish) world economic performance, will obviously affect us.
"Therefore, we have a tight game to play. There are other factors that we can countervail and we know our challenges. It is going to be tough but we are not going to be defeated," he told Bernama in a recent interview.
He said people are sceptical of the national carrier's performance after MAS released its first-quarter results and infact hinted that there was no chance of the airline showing any good numbers this year.
"But we are still committed to the target of achieving an operating profit of between RM300 million and RM600 million this year. (US$1=RM3.03)
"The expectations for the second quarter is not going to be so good. Even in the second-half the airline is not going to achieve even RM300 million, so what are we going to do about it?" he asked.
Munir said there was a fair way of assessing the situation.
He said there were other factors that should be taken into account to counter the trend.
"First, our fuel surcharge did not kick in its impact in the first quarter because we sell tickets in advance. It will impact the second quarter.
"I am not saying that we are going to make money in the second quarter but perhaps people don't understand that with the surcharge we are able to address about one quarter of the total additional jet fuel cost," he explained.
He said the airline has already hedged its fuel cost for the next quarter.
"But, we have still to think about the other remaining half in terms of how to address it," Munir said adding that the impact was still going to be heavy in the second-half.
Therefore, he said what Malaysia Airlines would have to do is to ensure growth of between two and three per cent for both revenue and yield.
Munir said best performing full service carriers have a margin of
about 10 per cent.
He said the best margin for low-cost carriers was 25 per cent and they have more leeway to play with the operating cost particularly jet fuel which makes up 40 per cent of "our cost."
"We do not have enough leeway unless we improve our yield by revenue because cost is going up," he added.
Munir also said the second half of the year would usually be better and "therefore we hope to rake in more bottom line or numbers."
"Whether we achieve the target of between RM300 million and RM600 million is not for us to speculate, we do not want to affect the market but we are working very hard, we know where the weaknesses are. The kind of things that we are doing will help.
"They are marginal at the end of the day but in terms of our long-term strategic significance we have begun to address these issues," he said.
Mohd Munir said people want immediate results, "immediate results I can say we have some surcharge revenue coming in.
"We usually have a better second half and then we are working at improving yield and bringing down cost," he explained.
In reducing cost, he said the airline has had a good track record in undertaking this in the past.
"On the cost side we have done well, revenue side, we have a lot of work to do," he added.
Not denying the challenges posed especially by spiralling oil prices, Chairman Dr Mohd Munir Abdul Majid said: "With oil prices cutting into the airline's margins and, of course, the (sluggish) world economic performance, will obviously affect us.
"Therefore, we have a tight game to play. There are other factors that we can countervail and we know our challenges. It is going to be tough but we are not going to be defeated," he told Bernama in a recent interview.
He said people are sceptical of the national carrier's performance after MAS released its first-quarter results and infact hinted that there was no chance of the airline showing any good numbers this year.
"But we are still committed to the target of achieving an operating profit of between RM300 million and RM600 million this year. (US$1=RM3.03)
"The expectations for the second quarter is not going to be so good. Even in the second-half the airline is not going to achieve even RM300 million, so what are we going to do about it?" he asked.
Munir said there was a fair way of assessing the situation.
He said there were other factors that should be taken into account to counter the trend.
"First, our fuel surcharge did not kick in its impact in the first quarter because we sell tickets in advance. It will impact the second quarter.
"I am not saying that we are going to make money in the second quarter but perhaps people don't understand that with the surcharge we are able to address about one quarter of the total additional jet fuel cost," he explained.
He said the airline has already hedged its fuel cost for the next quarter.
"But, we have still to think about the other remaining half in terms of how to address it," Munir said adding that the impact was still going to be heavy in the second-half.
Therefore, he said what Malaysia Airlines would have to do is to ensure growth of between two and three per cent for both revenue and yield.
Munir said best performing full service carriers have a margin of
about 10 per cent.
He said the best margin for low-cost carriers was 25 per cent and they have more leeway to play with the operating cost particularly jet fuel which makes up 40 per cent of "our cost."
"We do not have enough leeway unless we improve our yield by revenue because cost is going up," he added.
Munir also said the second half of the year would usually be better and "therefore we hope to rake in more bottom line or numbers."
"Whether we achieve the target of between RM300 million and RM600 million is not for us to speculate, we do not want to affect the market but we are working very hard, we know where the weaknesses are. The kind of things that we are doing will help.
"They are marginal at the end of the day but in terms of our long-term strategic significance we have begun to address these issues," he said.
Mohd Munir said people want immediate results, "immediate results I can say we have some surcharge revenue coming in.
"We usually have a better second half and then we are working at improving yield and bringing down cost," he explained.
In reducing cost, he said the airline has had a good track record in undertaking this in the past.
"On the cost side we have done well, revenue side, we have a lot of work to do," he added.
