KUALA LUMPUR, June 8 ― Malaysia Airlines expects an improvement in performance in the later part of the year and is working hard to deliver sustained profitability in 2019.

In a statement, Malaysia Airlines Group (MAG) Chief Executive Officer Izham Ismail (GCEO) said the airline is preparing itself for a tough year ahead with competition and exchange rate volatility.

Escalating fuel prices remain of particular concern, up almost 100 per cent from early 2016.

"Moving forward,  we will continue to drive yield by focusing on the premium segment to cushion the airline from rising costs,” Izham said.

Since September 2015, the airline has been owned and operated by Malaysia Airlines Bhd (MAB).

MAB reported a 6.6 per cent improvement in passenger yield in the first quarter ended March 31, 2018 (Q1 2018) to 22.6 sen from 21.2 sen in Q1 2017.

MAB said this is despite the significant competition on both the international and domestic sectors.

Revenue Per Available Seat Kilometre (RASK) also followed suit, showing healthy growth of 3.5 per cent year-on-year (YoY) with overall total revenue also growing by two per cent YoY.

 Izham  said: "Our performance is on budget for quarter one and the concerted focus on yield, which began in the second half of the previous year, continues to see results with an overall improvement in yield and RASK.

"I am heartened by the relatively encouraging first quarter of 2018, especially after a challenging FY2017 which saw the company underperform against budget.”

He also said the  performance last year was hampered by an adverse exchange rate swing which saw the depreciation of the Malaysian Ringgit (RM) against the US dollar (USD).

"With more than 50 per cent of our cost structure in USD, the depreciation had a significant impact on the company’s overall financial performance.

"Nevertheless, taken on aggregate, the company has made progress in the execution of the Malaysian Airlines Recovery Plan (MRP). This includes an improved cost base for the airline, bringing it in line with its peer network airlines,” he added.

The quarter saw Malaysia Airlines replace its A380 operations with the A350-900 aircraft on the London route.

The Malaysia Airlines fleet has also undergone a transformation since the start of the MRP, in line with the airline’s core focus of the Asia Pacific.

Whilst the B737-800s continue to provide domestic and regional connectivity, the widebody technology has now been streamlined and rightsized to a simpler model of A350-900s and the A330s, to suit scheduled operations.

The A380s will be used for the Hajj and Umrah business and deployed during peak and high demand periods.          

A total of 43 fuel initiatives, with target savings set at RM220 million, were registered in this quarter and will be tracked for 2018.

In the current environment of escalating fuel prices, MAB said it will leverage on technology and digitisation to minimise volatility effects. ― Bernama