Malaysia Air expected to report lower losses | india | Hindustan Times
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Malaysia Air expected to report lower losses

india Updated: Aug 02, 2006 12:43 IST

Flagship carrier operator Malaysian Airline System Bhd is likely to soon report an improvement in its financial performance after raising air fares, cutting costs and implementing other restructuring efforts, an industry executive said.

For the three months ended June, the airline is expected to report a loss of less than 180 million ringgit ($50 million; euro39 million), the executive familiar with the carrier told Dow Jones Newswires on condition of anonymity due to corporate sensitivities.

The performance would mark a rebound of at least 35 per cent compared to the April-June quarter of 2005, when the national carrier posted a 280.7 million ringgit loss.

The carrier is scheduled to report the second-quarter earnings later this month. A Malaysian Airline spokesman declined to comment on details of the performance.

Pulled down by high fuel costs, the company has forecast a financial loss of 620 million ringgit ($172 million; euro143 million) for 2006, but hopes to return to profitability by 2007 under an ongoing three-year turnaround program.

"There's still a good chance of meeting the full-year target (for 2006) even though the financial targets are challenging," the source said.

Like other Asian carriers, Malaysian Airline, which is 69 per cent-owned by the government's Penerbangan Malaysia Bhd, has been hit by surging fuel costs and intense fare competition.

Earlier this week, the company announced it was raising its domestic airfares by an average of 15 per cent and fuel surcharges for local routes this month.