First monthly profit for Malaysia Airlines

Group CEO Christoph Mueller confident airline is on track to return to profitability by 2018.

PETALING JAYA: Malaysia Airlines Bhd has posted a profit in February, it was reported today.

This is its maiden positive monthly result and its Group Chief Executive Officer Christoph Mueller is confident it is on track to return to full profitability by 2018 .

“For a company that lost RM2 billion just last year, if you are able to break even for a month or so, it means the financial gap between revenue and cost has significantly closed, and that is good news that tells us that we are on the right trajectory,” he said in an interview with AP.

“Malaysia Airlines has been operating for six months now and although we have a long way to go and areas for improvement, we are making steady progress in the restructuring.”

The carrier said revenue per available seat kilometre for the quarter improved 10% year-on-year on the back of the route optimisation exercise conducted earlier.

German-born Mueller is the first non-Malaysian at the helm of the national carrier.
Malaysia Airlines Bhd took off on Sept 1 last year by taking over Malaysian Airline System Bhd operations, including assets and liabilities.
The turnaround veteran was hired a year ago under a USD1.5 billion overhaul that included axing 6,000 jobs and unprofitable routes.

He cited the main problems were an unsustainable network of routes, high operational costs and archaic information technology systems.

Mueller told AP it was hard work cutting through the corporate culture of a state-owned company where the red tape was thick and employees had many “entitlements.”

He is pushing for hierarchies and bureaucracy to be slowly removed.

Mueller described the airline as a “ship that has many leaks”.

He told AP that revenue had improved and costs were down, underpinned by low jet fuel prices.

Even before the MH370 and MH17 disasters, the national carrier was ailing from mismanagement that saddled it with at least USD1.7 billion in losses since 2011.

In December, Malaysia Airlines unveiled an alliance with Emirates to piggyback on 70 of the Gulf carrier’s global routes so that it can focus on Asia. The only long-haul route it has kept is to London.