Kuala Lumpur-based Malaysia Airlines is gearing up for a full operational recovery in China and North Asia this year. In fact, the airline is optimistic about reaching pre-pandemic capacity levels across its entire network by the end of 2023. This hopeful outlook follows its parent company, the Malaysia Aviation Group, celebrating one of its best-ever quarterly financial performances in the past two decades. So, what contributed to this impressive turnaround? Let’s take a closer look.
A Remarkable Financial Turnaround
The Malaysia Aviation Group has managed to pull off a significant financial turnaround. In 2021, the group reported an operating loss of RM767 million ($173 million). However, last year, they bounced back with an operating profit of approximately RM556 million ($125 million). This remarkable comeback was achieved even amidst higher fuel prices, increased labor costs, and a weaker currency.
Several factors contributed to this return to profitability. First and foremost, the group saw robust demand for flights, with higher yields across both passenger and cargo business segments. Additionally, effective cost management and cash flow optimization played a crucial role in boosting profits.
Passenger and Cargo Business Segments Flourishing
Despite operating at lower capacity levels last year compared to pre-pandemic times, Malaysia Airlines experienced significant growth in revenue. The group’s total revenue tripled in comparison to 2021, primarily driven by stronger demand in the international sector for both commercial passenger travel and cargo freight. Although global freight demand softened slightly, it didn’t seem to put a damper on Malaysia Airlines’ success.
The group didn’t provide specific numbers, but they did share that approximately 9.9 million passengers were carried by the flag carrier last year, compared to just 1.7 million in 2021. The passenger load factor also improved from 46% to 75%.
Expanding the Network and Looking Ahead
Malaysia Airlines has been expanding its network, increasing capacities to specific destinations. One such example is the addition of a second daily non-stop flight between Kuala Lumpur International Airport and Doha Hamad International Airport, in conjunction with Qatar Airways. This expansion allows Malaysia Airlines to connect to more destinations in North America, Europe, and Africa.
As a member of the oneworld alliance, the airline is currently operating at an estimated 85% of pre-pandemic capacity. They are confident about returning to full capacity in China and North Asia by the end of June, with total capacity across the entire network expected to return by the end of this year.
With a bright outlook for 2023, the Group is also seeking opportunities to stimulate demand in Malaysia. They are eagerly anticipating the delivery of four out of 25 Boeing 737 MAX 8s from the third quarter of this year, making 2023 an exciting year for the Malaysia Aviation Group.
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