KUALA LUMPUR: A sharp 18% capacity cut in the final quarter of 2024 (Q4’24) did not stop Malaysia Aviation Group (MAG) from posting net income after interest and tax (net profit) of RM54 million for the year and its third straight year of operating profit, which amounted to RM113 million.
The capacity reduction, triggered by global supply chain disruptions, extended aircraft maintenance downtime and delays in new aircraft deliveries, hit during what is usually a peak travel period, denting revenue and earnings across the group.
MAG managing director Datuk Captain Izham Ismail said the impact of the reduction has significantly altered the group’s financial trajectory.
“With our overall performance for the year, we are really behind because of the capacity cuts we did in Q4. If we had not made those cuts, we estimated that the group’s profit could have reached RM580 million. For Malaysia Airlines Bhd alone, the improvement would have been close to RM300 million.
“We ended the year with a strong RM3 billion cash balance and no further shareholder injections,” he said at MAG’s 2024 financial year performance briefing today.
He said revenue declined by 4% even though capacity was up by 7%.
“Load factor was high at 81% compared to 77% the previous year, but yields dropped because Q4, typically our highest-yielding quarter, was where most of the cuts happened. That eroded the full-year yield. Cargo revenue was also lower as a result of reduced capacity.”
As a result, full-year revenue slipped 1% year-on-year to RM13.68 billion, despite a 6% rise in Available Seat Kilometres (ASK). The group’s earnings before interest, taxes, depreciation and amortisation (Ebitda) stood at RM788 million, while operating profit came in at RM113 million.
A significant contributor to the bottom line was a RM426 million reversal of impairment losses, previously recognised during the Covid-19 pandemic in 2020, on aircraft, property and other assets. The reversal was attributed to improved load factors, capacity and yield over the past two years.
Meanwhile, Malaysia Airlines’ operating profit fell 87% to RM139 million from RM1.09 billion a year earlier, due to reduced capacity and lower yields.
“Despite the setbacks, MAG closed the year with a strong RM3 billion cash balance and no additional capital injection from sole shareholder Khazanah Nasional since October 2021. Load factors remained resilient, with passenger load climbing to 80%, up three percentage points from 2023, signalling robust demand in both passenger and cargo segments,” Izham said.
The group carried 16.6 million passengers in 2024, up from 14.5 million in 2023, with passenger yield at 30.1 sen, down from 33.3 sen. On-time performance improved marginally to 73% from 72% previously.
Izham said non-airline segments also contributed positively to the group’s performance.
“MAB Kargo posted higher operating profit supported by stronger load factors, while ground handling unit AeroDarat tripled its operating profit on the back of higher flight handling volumes. Amal by Malaysia Airlines recorded a 36% improvement year-on-year,” he added.
Despite the operational setbacks, Izham said, MAG is pushing ahead with fleet renewal and network expansion.
“Two new Airbus A330neo aircraft have already entered service on long-haul routes, with eight more expected this year. The group is also set to resume flights to Paris in March 2025, reinforcing its European footprint.”
Forward bookings have increased by about 9% year-on-year, driven by strong demand across key markets including Asean, Australia, New Zealand and South Asia, he added.
