"Amazing", I have to say this 😀. This has been one of the long-term problem plaguing the financial health of the nation, like a cash-sucking entity which we just don't want to dump it.
Sure, we have to write an article on this historic news in order to keep a memorable record here 😄
Malaysia Aviation Group (MAG) achieved positive operating profit for the 2nd consecutive year at RM889mil, a 64% improvement from RM540mil in 2022. Cash balance stood at RM4.3bil with no capital injections from main shareholder, Khazanah Nasional Berhad, since October 2021. 😍😍😍
The Group also recorded its 1st ever net profit after interest and tax (NIAT) for the full financial year 2023, since its *inception in 2015, of positive RM766mil, a swing of RM1.1bil from a negative RM344mil the previous year.
*Note 📓📓📓:
Malaysia Aviation Group (MAG) took over as the parent company from Malaysia Airlines Berhad (MAB) when MAG was established in 2015.
MAB [previously Malaysian Airline System (MAS)] and other related entities (namely Firefly, MASwings, MABkargo) were re-established in 2015 as part of the MAS Recovery Plan (MRP) launched by Khazanah Nasional in 2014. MAS last recorded profit in 2010.
The strong performance was attributed to robust passenger traffic from the premium segment, intensified international network flow, active capacity management, deep partnership collaboration and stronger yield for passenger segment.
These were achieved despite higher operational and labour costs, weaker ringgit (RM), challenges in supply chains due to increasing costs and uncertain delivery commitments, fuel prices, and elevated interest rates.
All business segments across the Group registered a year-on year (YoY) improvement during the year. Main airline, MAB’s total revenue improved by 45% compared to the year before, underpinned by higher capacity, strong demand and focus on the international sector for passenger business segment. Capacity was at 90% of 2019 levels.
Operational Highlights
Airline Business
- MAB achieved significantly higher operating profit at RM1.099bil from RM80mil in 2022, attributable to higher capacity and robust yield amid strong passenger travel demand.
- In terms of capacity, the airlines business collectively achieved more than 89% across its domestic and international routes, while Malaysia Airlines has reinstated 86% of pre-pandemic capacity as at end December 2023, with a targeted full recovery expected by Q2 2024.
- Passengers carried by MAB was 52% higher than previous year with load factor at 77% while yield declined by 3% with more capacity deployed
- MAB On-time Performance (OTP) is down at 72%, compared to 82% a year ago affected by supply chain issues and aircraft constraints, among others.
- MAB introduced three new destinations to India – Amritsar, Trivandrum and Ahmedabad and resumed flights to Kertajati, Indonesia. Firefly (click here for good deals) narrowed its losses for 2023, on improved performance in both its ATR and Jet operations.
- Amal by Malaysia Airlines recorded an improvement on its financial performance from year ago with the resumption of Hajj and Umrah travels.
Aviation Services
- Cargo arm, MAB Kargo Sdn Bhd (MASkargo) recorded a lower operating profit impacted by further softening of in freight cargo demand and increased market competition.
- MAB Engineering Services Sdn Bhd continued to gain traction and performed well with third party revenue now contributing 24% of its revenue.
- AeroDarat Services Sdn Bhd, the one-stop centre for ground handling services recorded an improvement on its financial performance YoY. The number of flights it handled is 16% higher during the year compared to a year ago.
- MAB Academy underwent significant modernization and transformation, relocating the training centre to Malaysia Airlines’ former headquarters in December 2023, housing state-of-the-art facilities that reshape traditional approach to work and education.
Loyalty & Travel Services
- Enrich, Malaysia Airlines’ travel and lifestyle loyalty business segment record 34% higher revenue during the year with increased flight redemptions as the Group resumes flights to more destinations during the year.
- Journify, the one-stop travel and holiday planning app of MAG, saw good traction in 2023 delivering revenue higher than target and recording 10 million new customer traffic and over 100k app downloads since its inception.
- MHHolidays, the holiday arm of Malaysia Airlines that bundles flights and hotels globally, also delivered revenue above the target and website traffic grew by 71% versus last year.
Remarks by Group Managing Director of MAG, Datuk Captain Izham Ismail:
“We are pleased to report that the Group is poised for a remarkable comeback, solidifying our commitment to making 2024 the year of credibility. Bolstered by financial stability, we are well positioned to reinvest in our cabin’s hard product, enhance our offerings and execute our fleet expansion strategy.
MAG’s performance in 2023 marked a decade-high, showcasing our trajectory towards success. Post the successful financial restructuring in 2021, the Group has achieved significant progress in its LTBP2.0 turnaround plan, achieving positive EBITDA, reduction in fiscal losses and healthy operational cashflow, culminating in the Group’s first ever net profit after interest and tax in 2023 after almost a decade of losses.
In alignment with our fleet modernization and growth strategy, MAG is on track to integrate 12 new aircraft into its fleet in 2024. Looking ahead, we are optimistic about operating a fleet consisting of 50 narrow-body and 50 wide-body aircraft by 2033.”
Source: Malaysia Aviation Group Berhad
Malaysia Airlines
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