Malaysia Airlines: fully profitable by 2018?

Turnaround on track after catastrophic losses of MH370 and MH17
More than two years after the two catastrophic losses of MH370 and MH17, Malaysia Airlines has been completely reborn as a business over the last 18 months, TTG Digital reports.
Now it is planning a growth trajectory across south-east Asia under the stewardship of former Ryanair executive Peter Bellew.
Recently retiring the Boeing 777 and phasing out the A380, the airline has a commitment for up to 50 Boeing 737MAX aircraft, arriving from 2019, which will enable it to operate more competitively against its rivals.
The Boeing deal is “a game-changer” for the airline, Bellew says, in terms of costs and efficiency, allowing it to fly routes of six to seven hours. This will open up new city-pair options out of Kuala Lumpur and other parts of Malaysia that are not commercially sustainable for wide-body planes.
But while markets such as Australia, India and Pakistan are attractive, Bellew says it is China where the carrier sees the most potential: “Our planes are almost full [to China]. With three, four, five more aircraft, we will be able to make money even next week.”
Following the two aircraft disasters, a recovery plan was announced, aimed at stripping out legacy costs and setting it on a path towards sustainable profitability. Selected assets and liabilities were transferred to a new company, Malaysia Airlines Berhad, which began operations in September 2015.
Bellew insists the turnaround remains on track, with costs “under control”, the focus now being to “boost revenues”. The airline had a marginally profitable first quarter at operating level, driven by favourable fuel prices, operational improvements and a strong February.
Bellew is confident the airline will be fully profitable by 2018, and could be listed on Bursa Malaysia as early as spring 2019.
“While demand still runs strong in northern Asia, performance is relatively weak in south-east Asia and Australia due to oversupply,” he admits. “I am sure it will be a road with many interesting turns. But we will fix it.”
TTG Digital

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