Malaysia Airlines posts worst quarterly showing in nearly three years

KUALA LUMPUR — In its last earnings announcement as a publicly listed company before a planned nationalisation and overhaul, Malaysia Airlines (MAS) yesterday reported that losses had widened 53.5 per cent in its worst quarterly performance in nearly three years, as passengers avoided the carrier after the loss of two jets this year.

For the third quarter ended Sept 30, MAS’ net loss rose to RM576.1 million (S$221 million) from RM375.4 million in the corresponding period a year earlier — the worst quarterly loss since October-December 2011.

Revenue plunged 12.3 per cent to RM3.33 billion amid poor market sentiment because of the double whammy of the disasters and intense competition.

“While declining fuel prices have helped stem losses in our quarterly result, MAS continues to struggle despite efforts to reduce the financial bleeding. Certain markets, particularly China, continue to pose challenges to return to previous levels,” the company said in its statement accompanying the results filing with Bursa Malaysia.

MAS’ business, already hurt by stiff competition, took a turn for the worse after Flight MH370 with 239 people on board, mostly from China, went missing on March 8 while flying from Kuala Lumpur to Beijing.

The disappearance remains a mystery and no trace of the jet has been found. Then on July 17, Flight MH17 flying from Amsterdam to Kuala Lumpur was shot down over Ukraine, killing all 298 people on board.

Even before Chinese travellers shunned the carrier in the wake of Flight MH370’s disappearance, MAS had racked up RM4.1 billion in losses over the previous three years.

Still, the latest results underscore the challenges its majority shareholder, state investment fund Khazanah Nasional, faces in restructuring the carrier when it delists the company later this year.

The airline’s minority shareholders earlier this month provided strong support for the RM1.4 billion offer by Khazanah, which already owns about 70 per cent of the company, to take it private.

Khazanah will put into action an RM6 billion restructuring aimed at returning the carrier to profit within three years of delisting.

Under the overhaul, MAS will slash 6,000 jobs — or 30 per cent of its current workforce of 20,000 — and look for a new chief executive to replace Mr Ahmad Jauhari Yahya, who will stay in his post until next July.

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