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KK Lee

Malaysia Airlines to report smaller Q3 operating loss

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Malaysia Airlines to report smaller Q3 operating loss

 

KUALA LUMPUR, Oct 19 — Malaysian Airline System expects to report a smaller operating loss in the third quarter, the New Straits Times reported today, citing the national carrier’s chief executive.

 

The airline reported an operating loss of RM420.8 million ringgit in April-June, hit by weak passenger demand and higher costs.

 

“Past trends show that the second quarter is (traditionally) the worst,” said CEO Tengku Azmil Zahruddin.

 

“So if the trend continues, we should see better results in the third quarter than in the second quarter,” he said.

 

Malaysia Airlines cut its capacity by 12 per cent and grounded three planes in the first half of this year, but Azmil said there are no plans to further cut capacity or routes.

 

The International Air Transport Association last week said Asian airlines are starting to sell more premium as well as economy seats, outperforming other regions where economic fears continue to weigh on travel — Rueters

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A loss is a loss. Full stop. The other way is Profit. Which cannot be used in the same line as Malaysia Airlines.

Edited by jadivindra

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Surprise to know that MH is not making any profit despite the fact that most of the flights capacity is high. I was told my MH ground check in staff of KKIA that all the flights to KUL are almost full daily..and my recent flight to KUL was at 100% for Economy Class... :rolleyes:

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Surprise to know that MH is not making any profit despite the fact that most of the flights capacity is high.  I was told my MH ground check in staff of KKIA that all the flights to KUL are almost full daily..and my recent flight to KUL was at 100% for Economy Class... :rolleyes:

 

Looks like everyone's paying ELF... That's how to make the plane full and not make profit... :pardon: :pardon:

 

 

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Looks like everyone's paying ELF... That's how to make the plane full and not make profit... :pardon: :pardon:

 

Don't they have yield management to ensure when should they sell cheap, how many seats they should sell at that price etc?

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Losses is incurred by international routes. Domestic routes have been profitable almost all the time.

 

:drinks:

Edited by KK Lee

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Losses is incurred by international routes. Domestic routes have been profitable almost all the time.

 

:drinks:

 

I wonder what they've done overseas to promote themselves to the foreigners? Or are they just simply relying on word of mouth?

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Losses is incurred by international routes. Domestic routes have been profitable almost all the time.

 

:drinks:

 

A bit like using one credit card to pay for the other one - the hole just gets bigger. :rolleyes:

 

I wonder what they've done overseas to promote themselves to the foreigners? Or are they just simply relying on word of mouth?

 

2 things: MH = Malaysian Hospitality; and Winner of some awards (Skytrax? Best cabin crew?) many many moons ago. :pardon:

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2 things: MH = Malaysian Hospitality; and Winner of some awards (Skytrax? Best cabin crew?) many many moons ago. :pardon:

 

Looks like their marketing strategy's not working that well. Or are there any other mitigating factors for the lackluster performance on international routes?

Edited by Mohd Suhaimi Fariz

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Looks like their marketing strategy's not working that well. Or are there any other mitigating factors for the lackluster performance on international routes?

How well the airline performs can be directly linked to the development of the airport (KLIA), which in turns is linked to the country's economy. So the mitigating factors are many.

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Don't they have yield management to ensure when should they sell cheap, how many seats they should sell at that price etc?

 

 

They have yield management (Revenue Management to be more precise) but they dont have yield managers.

 

Looks like everyone's paying ELF... That's how to make the plane full and not make profit... :pardon: :pardon:

 

Anyone can throw 0.5M free seats and bump up their load factor almost overnight. Then go bragging about it.

 

There something wrong somewhere or someone has got the KPIs all messed up in their heads.

Edited by Tim Lee

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They have yield management (Revenue Management to be more precise) but they dont have yield managers.

 

 

 

Anyone can throw 0.5M free seats and bump up their load factor almost overnight. Then go bragging about it.

 

There something wrong somewhere or someone has got the KPIs all messed up in their heads.

It is a Catch 22 situation with MH now, Tim. No one will fly them if the price is too high because their hardware ain't worth the penny. Charge low with ELF to fill up the seats but the yield isn't there, or worse, full plane but loss making.

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Wonder if the same bashing should apply to SQ, CX, BA etc as they are all reporting an operating loss at this juncture. Hmm.. oh no wait, "Malaysians are the best critics of themselves" . Maybe one should consider poor yields as experienced by almost every major airline in the world in the current economic climate. Try researching on double digit drop in yields reported by airlines worldwide and the great fall of JAL to improve understanding on Revenue Management. Sometimes things go a lot deeper than whats known to us. Full aircraft does not equal to a profitable route. Network management, revenue control, cost structures... they are all complex issues faced by airlines and i believe every airline works towards improving themselves in these areas. However, at times, when matters are beyond your control, you have to revert to damage control. Only those involved in these areas would understand the pain such a situation brings and it would be unfair to pass plain undue judgements. Just my two cents. Cheers!

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SQ, CX, BA may be reporting operating loss at this juncture but they are positioned for recovery and next up cycle. What about MH?

 

MH is operating domestic routes for PMB on contract with profit guaranteed. Hence, operating loss is incurred by international routes.

 

1H/09 has shown, it has become tough for MH to cut cost further e.g. catering. Believe the only solution for MH to climb out of the vicious cycle of cost cutting/loss is to abandon current business practice.

 

:drinks:

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It is a Catch 22 situation with MH now, Tim. No one will fly them if the price is too high because their hardware ain't worth the penny. Charge low with ELF to fill up the seats but the yield isn't there, or worse, full plane but loss making.

Also bear in mind that the B734's CASM is not as low as that for modern airliners like the A322. Furthermore, the B734's have fewer seats - it gets full a lot quicker! MH does not have much to play with as far as yields are concerned.

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