Route cuts put Malaysia Airlines back to black

Struggling flag carrier Malaysia Airlines said on Tuesday it has swung back to a profit after six straight quarterly losses as the slashing of unprofitable routes helped cut costs.

The airline recorded a 37.08 million ringgit ($12.25 million) net profit for its third quarter ending September 30, compared to a 477.6 million loss in the same period a year earlier, it said.

"We are very encouraged by the improved trend in our financial performance in this third quarter especially after six quarters of loss," chief executive Ahmad Jauhari Yahya said in a statement.

"Our focus remains to increase revenue and manage our costs... Although the journey ahead is long, with focus, we will succeed."

The improvement in the airline's bottom line "was mainly due to the route rationalisation programme", which resulted in a nine percent decrease in fuel costs and a seven percent drop in non-fuel costs, the carrier said.

Lower fuel costs also helped, it said.

The airline has battled for years to stay in the black, with analysts blaming a combination of stiff competition, poor management, change-resistant unions, government interference and other factors.

Earlier this year, it reported a full-year 2011 loss of 2.5 billion ringgit and in June announced it was pushing back a planned 2013 return to profitability after a tie-up with rival budget carrier AirAsia crumbled.

Amid the gloom, the airline embarked on a cost-cutting campaign centered on slashing routes, including to Rome, Johannesburg, Cape Town, Buenos Aires, Karachi and Dubai.

Malaysia Airlines said the cost-cutting moves caused revenue to shrink only two percent to 3.5 billion ringgit.

Ahmad Jauhari said the airline continued to face challenges including the global economic woes and their affect on air travel, increased competition and high fuel costs.

The airline was still in the red for the first nine months of the year, with a net loss of 484 million ringgit, down from 1.25 billion for the same period a year earlier, it said.

Earlier this year, a tie-up with profitable AirAsia fell apart due to resistance by unions representing Malaysia Airlines.

Analysts had predicted the venture would help the flag carrier by eliminating head-to-competition on some routes.

Malaysia Airlines, which in February admitted it was "in crisis", has announced a series of turnaround plans over the years, the latest major refocusing coming last December.

  • 2015 Nissan Murano aims for the style-forward crowd 4 hours ago
    2015 Nissan Murano aims for the style-forward crowd

    Nissan says its 2015 Murano crossover, only the second major revamp of the car since it debuted in 2003, draws its design cues from the “age of future space flight.” That’s probably taking it a little far, but the new Murano, based off the 2013 Resonance concept vehicle, is an exceptionally lovely machine, all fluid, curved metal on the outside, and flowing, soft-touch materials on the inside. Certain kinds of comfort and charms that were unheard-of outside of premium vehicles five years ago have definitely trickled down, and reached a kind of design apotheosis with this car.

  • Volkswagen brings new (ish) Jetta to New York along with Golf Sportwagen 7 hours ago
    Volkswagen brings new (ish) Jetta to New York along with Golf Sportwagen

    With its new President and CEO of America, Michael Horn, on stage in New York after just 100 days on the job, Volkswagen debuted its 2015 Jetta. You'd be forgiven for noticing little differences compared to the outgoing model, and in the words of Horn himself, the changes are indeed subtle. The most notable of those subtleties is the all-new 2.0 liter turbo diesel motor, offering 45 mpg highway and a modest increase of 10 hp. For VW, diesel is where it's at.

  • With Vantage GT, Aston Martin races below $100,000 7 hours ago
    With Vantage GT, Aston Martin races below $100,000

    Aston Martin is going downmarket, sort of. The 2015 Vantage GT, a sport-styled variant of Aston’s legendary flagship car, draws style and performance tips from their GT4 race cars, which will be running in North America this year. It’s also priced at $99,900, which shows that the market for these kinds of consumer sports cars has boomed in recent years.