Published on : Friday, August 29, 2014
The disappearance of Malaysia Airlines flight MH370 in March 2014 continued to impact the airline’s Quarter 2 financial results with Malaysia Airlines’ reporting a Net Loss of RM307 million for the three months ended 30 June 2014. Adding to the earlier loss of RM443 million in Quarter 1, the national carrier’s 1H 2014 results stood at a Loss of RM750 million, 65% more than the previous corresponding period in 2013.
For the three months ended June 2014, Group revenue fell 5% to RM3.59 billion compared to one year ago as a result of lower yield and Seat Factor following the MH370 tragedy. The lower revenue coupled with a marginal 2% increase in cost, principally due to fuel cost for the Quarter, resulted in a Net Loss After Tax of RM307 million after taking into consideration depreciation (RM223 million), finance costs (RM119 million) and unrealized forex gains (RM52 million).
“We expected the impact of MH370 on the performance in Quarter 2. Given that, our team put in much hard work and effort to regain market confidence and rebuild sales. Tragically, just as we were beginning to see signs of recovery in all regions, we were dealt the blow of MH17”, said Malaysia Airlines Group Chief Executive Officer, Ahmad Jauhari Yahya.
Having lost substantial potential revenue from the popular MATTA Fair in early March and the decision by MAS to impose a deliberate advertising black-out in March and April due to the tragedy of MH370, more aggressive marketing activities picked up in May and June.
The market responded positively to the Malaysia Airlines Travel Fair (MATF) held in May which saw sales increase 29% and higher than average daily sales compared to previous fairs that ran earlier in the year. MATTA Sabah, MATF Penang plus a greater push in all markets around the world further helped sales and restored confidence in MAS.
Seat factor which fell 9.5 ppts in May to 68.9% was seen to pick up in June to return to above the 80% levels again.For Q2 2014, Capacity rose 9% year-on-year based on improved aircraft utilization; however traffic remained the same year-on-year. Consequently, the airline’s Seat Factor recorded a fall of 6.7ppts for the Quarter to 73.7% compared to 80.4% in the previous year. Malaysia Airlines carried 4.2 million passengers in the months of April to June 2014.
Tags: Airline News, Impact of MH370 Tragedy Dents Malaysia Airlines Q2 2014 Results