MAS’ annual profit drops on rising fuel costs

Malaysia Airlines (MAS) posted a profit of 234 million ringgit (US$77 million) for the year ended 31 December 2010, a drop of 52.24 percent from the previous year, due to rising oil prices. Revenue increased 14.4 percent to RM12.9 billion ringgit. MAS’ Managing Director and Chief Executive Officer Azmil Zahruddin describes the performance as satisfactory, but adds that fuel remains a major concern for the airline. “It is difficult to predict how the price of fuel will be ... for the rest of the year,” Azmil said.

4th Apr 2011



MAS’ annual profit drops on rising fuel costs


Malaysia Airlines (MAS) posted a profit of 234 million ringgit (US$77 million) for the year ended 31 December 2010, a drop of 52.24 percent from the previous year, due to rising oil prices. Revenue increased 14.4 percent to RM12.9 billion ringgit.
MAS’ Managing Director and Chief Executive Officer Azmil Zahruddin describes the performance as satisfactory, but adds that fuel remains a major concern for the airline. “It is difficult to predict how the price of fuel will be ... for the rest of the year,” Azmil said.
The carrier has restructured its fuel-hedging policy to cover 25 percent of requirements for 2011 at a fixed US$88 a barrel. The airline warns that it may increase fuel surcharges on fares if oil prices keep escalating.
During the course of 2010, MAS took delivery of three Boeing 737-800 single-aisle jetliners while its low-cost subsidiary Firefly took delivery of its last three ATR72-500 turboprops, expanding its fleet to ten aircraft.
Azmil sees more challenges in the near future. “The economies in Europe and North America are still weak, while the unrest in the Middle East may fuel a steep rise in oil prices,” Azmil pointed out.
Nevertheless, the MAS chief remains confident that the Asia-Pacific region will drive growth in air-transport demand over the next five years.
According to IATA, international passenger demand in the region is expected to grow 7.6 percent over the period. China will be the biggest domestic and international market in Asia, followed by Japan and Hong Kong.
China will also be the fastest-growing market for international passenger traffic, expanding at 10.8 percent per annum. The next-fastest growth markets will be the United Arab Emirates and Vietnam (both at 10.2 percent), followed by Malaysia (at 10.1 percent) and Sri Lanka (9.5 percent).
This year, MAS will take delivery of five more 737-800s and three Airbus 330-300 widebody twinjets. The carrier is also considering exercising its right to convert some of its 20 options for the 737-800 to 737-900ERs.
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