MAG does a turnaround

Malaysia Aviation Group (MAG) posts a turnaround in operating profits at RM556 million from RM767 million a year ago. Its passenger traffic and capacity increased by 5.7X and 6.9X, respectively year on year and recorded an average load factor of 75 per cent for 2022.

TT Bureau

Malaysia Aviation Group (MAG) registered one of its best ever quarter performance in the past two decades. The Group attributed the successful results to the robust demand, higher yield across passenger and cargo business segments, as well as effective cost management and cashflow optimisation, despite higher fuel prices and labour costs, weaker ringgit (MYR) and lower than prepandemic flight capacity levels. It achieved a record net profit of RM1.146 billion in Q42022 after interest and tax. For full year 2022, the Group recorded a net operating profit of RM556 million, while a net loss after interest and tax for the year reduced 79 per cent to RM344 million from RM1.65 billion a year ago. Cash balance stood at RM4.6 billion on 31 December 2022.

The Group also saw improvement across all its business segments during the year. Its cargo subsidiary, MABkargo Berhad (MABkargo) recorded marginally weaker performance compared to a year ago amid softening of global freight demand and increased capacity in the market in the 2H22. Total revenue of its main airline, Malaysia Airlines Berhad (MAB) tripled compared to the year before, underpinned by strong demand on the international sector for both passenger travel and cargo freight.

Captain Izham Ismail, Group Managing Director, MAG, says, “MAG has emerged from the COVID-19 pandemic on a strong financial footing and is charting an upward financial trajectory. However, there are still many areas for improvement, especially in OTP and customer experience. The Group is fully committed to addressing these gaps and delivering an unparalleled customer experience.”

Travel demand outlook remains strong in the near term, although macroeconomics environment remains challenging with sustained high fuel prices, volatile forex, higher operating costs due to inflation, labour constraints, recession and geopolitical risks. With China’s border reopening in January 2023, MAB aims to regain the remaining capacity for its entire network, which currently stands at 85 per cent, and fully recovering services to China and North Asia by the end of 1H23. This will spur economic growth between Malaysia and China, boosting the overall business and trade links between the two countries. In line with its Long-Term Business Plan 2.0 and continuing the growth of Firefly jet operations, MAB will be transferring in phases intra-Borneo services and Kota Kinabalu international services to Firefly, as a result of continued positive demand recoveries across all the markets.

MAG looks forward to taking delivery of four out of 25 Boeing 737-8 from 3Q23 onwards. The Group continues to accelerate its Sustainability Blueprint agenda in all sectors, inspiring positive change through various initiatives. In addition to supporting the United Nations’ 13th SDG (Climate Action), these initiatives target three other SDGs: Goal 5 (Gender Equality), Goal 7 (Affordable and Clean Energy), and Goal 12 (Responsible Consumption and Production).