KUALA LUMPUR: The earnings report from MAG indicated a significant drop in annual profit for Malaysia Airlines in 2024 as net earnings for that year plummeted by 93 percent to 54 million ringgit ($12 million) from 766 million ringgit in 2023. The giant drop, despite its being the second consecutive year of profitability, defines the airline group as undergoing serious ongoing operational problems as well as financial pressure.
Since late 2023, a partial flight capacity of 18 percent has had to be cut. This is in part due to an inquiry by the Civil Aviation Authority of Malaysia, which found safety and maintenance deficiencies. This, together with disentanglement of global supply chains and long maintenance lines for its aircraft, reduced MAG's ability to maintain the levels of services they can have.
Passenger demand remained very good, especially in the premium sector, yet the yield per passenger-which is the most important indicator of airfares-had decreased by 9.6 percent. This reveals that the airline has less pricing power in a progressively competitive environment within the region and stabilization of demand after the pandemic.
Izham said that although the company was still affording a lot of traffic, the backlog in the delivery of aircraft and the supply chain bottlenecks were serious disruptions. MAG is looking at 30 Boeing 737 MAX and 20 Airbus A330neo in 2028, with 2 already in service, to revamp its fleet over the next few years.
This has been the scenario of Khazanah Nasional's airline regarding the non-need for fresh injection of capital after 2021 and not pursuance of funds at the current time. Izham also stated that the company allows for future aircraft requirements from COMAC of China.
MAG, despite the troubles ripping it apart, does keep focusing on modernization and development for the long-haul, with stability and better performance going forward.
[Source Credit: Business Recorder]
