MAS posts lower Q1 pre-tax profit of RM171m

Tough business decisions helped Malaysia Airlines (MAS) to reduce its loss after tax by 29 per cent to RM171 million in
the
first quarter ended March 31, 2012, from a loss of RM242 million posted
in the same period last year despite higher jet fuel prices.

Although
jet fuel prices averaged US$135 per barrel in Q1 from US$120 per barrel
previously, cutting unprofitable routes and newer fuel-efficient
aircraft helped the financially-beleaguered national carrier to lower
its losses.

Group revenue declined to RM3.114 billion against
RM3.190 billion while overall operating expenditure was at RM3.42
billion, leading MAS to register an operating loss of RM307 million for
the quarter, 10 per cent lower year-on-year.

"We were able to
achieve a lower net loss for the quarter compared to the previous year
because we made some tough decisions per our business plan," its Chief
Executive Officer, Ahmad Jauhari Yahya said.

"We cut
unprofitable routes especially in long haul where yields were low. This
helped us to immediately improve our revenue per available seat
kilometre (RASK) performance year-on-year," he said in a statement
today.

"On the cost side, we lowered our fuel bill with improved consumption as a result of newer fuel-efficient aircraft."

Ahmad
Jauhari added that improved cost management was also seen for non-fuel
variable costs, although we are currently unable to address our fixed
costs.

"We are optimistic this situation will change in the not
too distant future. From these results, we feel confident of continuing
improvements in performance, given that the initiatives from our
business plan are bearing fruit."

Passenger yield increased 12
per cent while RASK increased by eight per cent. Passenger capacity
decreased eight per cent due to network rationalisation that included 12
route cuts during the period, it said.

The group's aggressive
focus to consolidate its network has begun to show promising results.
The cargo division recorded a 15 per cent decrease in operating revenue
for the quarter to RM431.2 million from last year due to proactive
capacity
management.

Capacity decreased 19 per cent, with
yield increasing by six per cent. Group operating expenses for the
quarter was RM3.42 billion, 3.1 per cent lower than the same quarter
last year.

Fuel remained the largest component at 38 per cent,
equivalent to RM1.31 billion, which was an increase of RM142 million,
spent on jet fuel alone.

Aided by the network rationalisation
and improved fuel consumption from more efficient aircraft, the group
was still able to record a significant achievement with a lower total
expenditure despite the rise in fuel price.

Staff costs
increased seven per cent to RM591 million for the quarter due to salary
increments and upward adjustments to the salary structure as a result of
a Collective Agreement signed with the union. -- Bernama