MAS reports ‘marginal’ improvement in Q1 results

MAS, now a government-controlled entity of Malaysian sovereign wealth fund Khazanah, said in its May Quarterly Progress Update (QPU) it was seeing “strong indications [of] positive results” as a result of ongoing restructuring. The Malaysian flag carrier said it was experiencing “good progress” on its turnaround plan, with a 23.4% rise in yield to MYR 0.23 ($0.6) per passenger on the back of a significant 32.9% cut in operating costs over the quarter. However, the QPU indicated that 1Q overall revenue was down 21.7% with ASKs also dropping by 30.2%, partly due to the grounding of the majority of the carrier’s long-haul fleet. The airline reported 3.2m passengers carried in 1Q 2016, with a relatively low load factor of 68.9%; however, MAB said this was now “trending upward.” Lower fuel requirements and a lower oil price contributed “significantly” to an improved cost position, the airline said. It also said improved work efficiency and a significant headcount reduction resulted in a 40.5% cut in payroll costs before exceptional items. The carrier said these improvements had helped it become “ahead of budget at [both] operating and EBITDAR levels” as at the end of Q1 2016. However, it said it expected a weaker Q2 2016, and a probable overall loss at end 2016. Nonetheless, MAB CEO Christoph Mueller said he was “delighted” at overall progress at the airline, even though he would not be able to complete his full term as CEO.<br/>