MAS profit RM198 millions BUT AirAsia loss RM466

[M. Sofian H. 0]

Mixed fortunes for MAS and AirAsia

 

KUALA LUMPUR: Malaysia Airlines (MAS) and AirAsia Bhd both reported their results yesterday, with MAS recording net profit of RM38.56mil while the low-cost carrier posted net loss of RM465.53mil due to translation losses and exceptional items.

 

Both airlines were affected by the surge in fuel prices during the third quarter ended Sept 30, where jet fuel averaged US$160 per barrel against US$91 in the previous corresponding period.

 

MAS said its operating profit was RM44.27mil compared with RM376.39mil a year ago in the absence of the sale of aircraft which amounted to RM220.56mil a year ago and gain of RM51.73mil from sale of properties.

 

Managing director and chief executive officer Datuk Seri Idris Jala said the airline “made money” which was almost impossible in such adverse times.

 

“We have delivered profits for nine consecutive quarters despite the adverse environment which saw 30 airlines declaring bankruptcy,” he told a results briefing yesterday.

 

MAS reported operating revenue of RM3.95bil with an additional RM160.48mil in other operating revenue. This was an increase from the RM3.76bil a year ago. Its operating expenses rose to RM4.07bil from RM3.74bil.

 

For the nine months to Sept 30, MAS’ net profit stood at RM199.08mil on revenue of RM11.28bil compared with RM610.49mil and RM10.61bil respectively a year ago.

 

AirAsia meanwhile recorded revenue of RM658.48mil in the third quarter against RM461.59mil previously. It reported a core operating loss of RM76mil against a core operating profit of RM48mil a year ago. The ringgit weakened against the US dollar and this resulted in a translation loss of RM213mil.

 

“The exceptional item amounting to RM215mil relates to the provisions for unwinding our derivatives structures and likely non-recovery of collateral for trades held by Lehman Brothers Commodity Services Inc,” it said in a statement.

 

“Due to these charges, AirAsia posted a loss after tax of RM466mil after accounting for deferred taxation,” it said.

 

For the nine months ended Sept 30, it posted a net loss of RM294.8mil compared with net profit of RM451.9mil in the previous corresponding period. Revenue increased to RM1.8bil from RM1.3bil a year ago.

 

Congrat Idris Jala!!

[Nik H. 3]

Congrat Idris Jala!!

 

Bet you guys my house if it was the other way round it will be headlines. But because its not its only a sidebar story.

 

[Naim 6]

Bet you guys my house if it was the other way round it will be headlines. But because its not its only a sidebar story.

 

Which house, Nik?

 

Anyway this topic already being discussed here:

http://www.malaysianwings.com/forum/index....showtopic=10930

[Fitri Shukri 0]

Congratulation MAS. Hope MAS can sustain making profit.

 

Bet you guys my house if it was the other way round it will be headlines. But because its not its only a sidebar story.

 

Err, no need house. Your SmartCar or superbike is sufficiently enough for me...hehehe

Edited November 29, 2008 by Fitri Shukri

[Mohd Suhaimi Fariz 2]

Does AirAsia's loss because they're paying fuel at higher price due to their fuel hedge?

[untaman 0]

how can Air Asia got a large lost !!! unbelivible

[yeadrian 0]

The scale has tipped on to the other side now!,

I could not believe it when I read it in the Star Biz today...

Kudos to MH, get well soon Air Asia!!

[Waiping 12]

Ya, considering AK was very strong and agrressive with their publicity and promotions. Maybe they are indeed losing money with their promotions at times.

[Aiman 0]

promotions and publicity+large capacity ordering aircraft=330,320 thats why la..

 

know wonder la repaint the livery Bank Rakyat....back-up program I guess

[KK Lee 5]

It is commendable for MH to make profit under very difficult trading period of 3Q/08. Hope MH will have similar and better result in 4Q/08.

 

Oil price started to soften in last July. Believe most airlines losses in 3Q/08 was from fuel hedging.

 

 

[Fitri Shukri 0]

We are just at the start of the recession and AK already make big loss. Oh boy, what about if things get worse next year? I hope AK will be able to weather the storm. I still want to fly cheap to Sabah/Sarawak/Indonesia/Brunei next year for my work.

[jeff 0]

Good Job MH...

[C.Lim 0]

Obviously we would hope the two big airlines in our country remain profitable even analyst predict that there wouldn't be any airline be profitable.

[affendi osman 0]

Congratulations MH.

Hope the same pattern will follow next year.

[Izanee 0]

even I have to admit that IJ has done a good job. i will have to eat my own humble pie. congrats for a job well done!

 

 

 

[mohd sukri abd hamid 0]

good job mas...love you..always flying with mas..best airlines to bring me home

[Nik H. 3]

even I have to admit that IJ has done a good job. i will have to eat my own humble pie. congrats for a job well done!

 

Izanee, and some of the most well meaning critics here.....some of the things done in MAS by IJ are not far adrift from suggestions posted on Mwings. Meal(Snack)boxes, pricing strategies, route rationalisation and eventually Fleet changes count as a few. Many more initiatives are to follow and the road to maintain profitability is going to be a rocky one. Much remains to be done.

 

Thankfully, IJ has agreed to helm MAS for another 3 years, and that, at the very least, will ensure some measure of consistency in policy and continuity in driving the BTP. IJ in my humble opinion, is a good boss to work with. Don't get me wrong, I don't work for him, I work for MAS, so blowing smoke up his ass is not something I'd do. Eventually he'll be going to even better pastures but i will still be left behind with his successor, whoever he may be. I have gone through a number of management changes and am relieved not to go through another one. Credit must be given where credit is due.

 

By his own admission, the future for the global air industry is far from rosy, and he's going to have a tough time doing his job with MAS being a business of National interest.

 

In the meantime, keep the criticism coming, there's always something useful that can be picked out and learnt from. Nothing like some reminders to keep MH on its toes.

 

Cheers.......

 

 

[Simon 3]

By reading this thread's title, AK lost RM466, no big deal la :rofl: I think Sofian missed the 'Million'

 

Although MAS has some profit, but it is a huge dive compare to the same period last year.

[Azreen 0]

Congrats MAS. Keep the profits coming, more importanty I hope their cashflow is good too.

[KK Lee 5]

Thankfully, IJ has agreed to helm MAS for another 3 years, and that, at the very least, will ensure some measure of consistency in policy and continuity in driving the BTP.

 

Expect next 2 to 3 years to be very tough and challenging years ahead for MH, surprise that IJ renewed his contract. May be aviation bug had gotten into him.

 

 

[M. Sofian H. 0]

Idris Jala Named Orient Aviation Person 2008

 

 

KUALA LUMPUR, Dec 1 (Bernama) -- Datuk Seri Idris Jala, managing director and chief executive officer of Malaysia Airlines (MAS), has been named Orient Aviation Person 2008 for being the driving force behind the national carrier's amazing comeback.

 

While many wrote off the airline when it made its biggest losses ever of RM1.3 billion in 9 months in 2005, Idris joined the airline and turned MAS' record losses into record profits and rebuilt confidence and morale among its 20,000 employees, all within two years.

 

"MAS recorded RM851 million in the financial year 2007, its highest profit in 60 years of operations, and is only one of the six airlines in the world recognised as a "5-star airline" by Skytrax, United Kingdom, an accolade it has won for three consecutive years from 2006 to 2008," said MAS in a statement.

 

Idris said he was pleased and honoured to accept the award as he and his team worked hard to turnaround MAS. Now, they are embarking on a business transformation journey in pursuit of their vision to become the World's FIve Star Value carrier.

 

Idris said he is blessed with a great team of people who are passionate about the airline.

 

Orient Aviation chief executive Barry Grindrod said Idris acted speedily and decisively. In the last three years, he has slashed US$500 million costs at MAS.

 

Idris is on target for additional cuts of US$280 million in operational costs this year. Significantly, he has also restored morale in the carrier which was rock bottom when he joined the airline, Grindrod said.

 

He has quickly become one of the most highly respected chief executive officers in the industry worldwide, he said.

 

Previous winners of the award, which was established in 1999, include Chew Choong Seng from Singapore Airlines; Geoff Dixon, Qantas Airways; Jaime Bautista, Philippine Airlines; Kanok Abhiradee, Thai Airways International and David Turnbull, Cathay Pacific Airways.

 

-- BERNAMA

[Izanee 0]

Capt Nik...i might not like some of IJ's decisions...but I guess his style of leadership and his approachability makes him an excellent boss to work for! My job is pretty stressful most of the time too...and i think i am lucky to have a supportive group of consultants who treat us as part of a family.

I can understand how IJ needed to drastically reduce his costs quickly.... we have to do similar things to cut our losses too...albeit in a more sterile environment!

 

I'm glad that some comments here have been taken into consideration....such as having hot meals in the snack box. Although they are not ideal...i guess the important thing is that some of our messages do get through.

 

I leave MAS in both your capable hands...and I will continue trying to make my criticisms as constructive as I can...

 

keep up the good work...esp in MAS charters!

Edited December 1, 2008 by Izanee

[Pieter C. 5]

AirAsia's MYR465.5 million loss is first since going public

 

Wednesday December 3, 2008

Noncash losses on fuel hedges and currency fluctuations dragged AirAsia to its first quarterly loss since going public in 2004, a MYR465.5 million ($128.2 million) third-quarter deficit that represented a reversal from the MYR180 million earned in the year-ago period.

 

Principal charges comprised a MYR215 million loss related to the unwinding of the carrier's fuel hedges, a loss it said it will recover "in less than three months," and a MYR213 million translation loss resulting from the US dollar's rise against the ringgit. It said its long-term forward contracts to purchase dollars could "potentially" result in a gain of MYR366 million.

 

Third-quarter revenue rose 43% year-over-year to MYR658.5 million, a gain cited by CEO Tony Fernandes when he said the period demonstrated the LCC's "resilience and strength." Core operating result swung to a MYR75.9 million loss from a MYR47.8 million profit in the third quarter of 2007.

 

Ancillary revenue rose 88%, with per-passenger spend climbing 52% to MYR23.1. Ancillary income now represents 10.6% of AirAsia's total revenue and will "be the driver for strong profit margins going forward," Fernandes said. Passenger numbers were up 24% to 3 million on a 27% lift in RPKs to 3.43 billion. Capacity grew 33% to 4.83 billion as the airline added five new routes during the quarter and load factor slipped 3.9 points to 75.4%. Yield was ahead 12% and unit revenue increased 8% to 13.63 sen. Unit cost soared 30% to 13.54 sen but fell 14% to 4.43 sen excluding fuel.

 

The fourth quarter "is traditionally our strongest," AirAsia said, adding that "sustained strong demand for our services" continues. It expects its full-year fuel bill to be lower than budgeted, although the dollar's continued rise against the ringgit could offset those gains. It forecast a "satisfactory" fourth-quarter result.

 

 

[FK Wong 0]

Could it be that, it was done on purpose to announce huge losses as everyone do know it for the fact that he is keen to take the company back privately. Imagine that the IPO for the public listed company is only RM1.10. For another fact to it let's say that the share sets back to 60 cents and he intend to purchase it for 75 cents or 80 cents. I guess there is plenty of money that he have earned "legally" from the IPO's and privatization process.

[KK Lee 5]

 

Most of MH fuel hedging was done when the oil price was at the peak last year. If compare with current spot price, these hedging is costing the airline over RM25 million a month until contracts end in the summer

 

2009 will be a very tough year for MH and 4Q/08 result is likely to be in the red.