KUALA LUMPUR: Malaysia Airlines’ parent company Malaysia Aviation Group reported a second consecutive annual profit in 2024, but it fell 93% from the previous year due to lower airfares and capacity cuts stemming from supply chain and maintenance issues.
MAG, owned by Malaysian sovereign wealth fund Khazanah Nasional, on Thursday reported a net profit after interest and tax of 54 million ringgit ($12 million) for 2024, compared to 766 million ringgit a year earlier.
Malaysia Airlines has struggled to recover from two deadly disasters in 2014, and at the end of last year it temporarily reduced its flight capacity by 18% after it was investigated by Malaysia’s civil aviation authority, which found several significant safety and maintenance issues.
“Despite the capacity cuts, passenger traffic remained robust in the premium segment with stronger load factors from both passengers and (the) cargo segment,” MAG Managing Director Izham Ismail told reporters.
MAG’s average passenger yield, a proxy for airfares, fell 9.6% last year, the results showed.
Airlines in Asia have been seeing good travel demand but airfares are coming down from the record highs achieved after the pandemic.
MAG said the fourth-quarter capacity cuts were driven by supply chain disruptions that extended maintenance times and new aircraft delivery delays.
The company, which last received a capital injection from Khazanah in October 2021, does not need another one at this time, Izham said.
MAG has been steadily growing and renewing its fleet.
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It aims to operate a narrow-body fleet of 55 new generation Boeing MAX aircraft by 2030.
Last month, it said it would buy 18 737 MAX 8 and 12 737 MAX 10 aircraft, with an option to purchase a further 30 jets. Izham said MAG was committed to renewing its ageing fleet, but that operational disruptions remained a challenge.
“Global supply chain disruptions and delivery delays have impacted the pace,” he said. Other carriers around the world have reported similar struggles.
MAG is also expecting 20 new Airbus A330neo wide-body jets by 2028.
Two have entered service and eight more are expected this year, MAG said.
Izham said MAG was still evaluating aircraft from China’s COMAC, and the door was not closed to the emerging planemaker for future fleet tenders.
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