Malaysia Airlines said Friday it sank into the red in the first quarter, with losses of 695 million ringgit (198 million dollars) due to weaker demand, overcapacity and volatile fuel prices.
The national carrier said the loss for the three months to March compared with a net profit of 120.1 million ringgit a year earlier. It was the first quarterly loss for the company in two-and-half years.
The airline also posted an operational loss of 138 million ringgit, while revenue for the January-March period was 2.7 billion ringgit, down from 3.8 million ringgit a year earlier.
"This is the first operational loss for Malaysia Airlines since the third quarter of 2006 as it faced a triple squeeze; overcapacity, extreme fuel volatility, and a global slump which hit passenger and cargo demand," the company said in a statement.
It also said the outlook remains challenging as travel demand in the second quarter "is expected to remain soft" but could improve later.
"The outlook remains challenging as yield pressures continue to mount as airlines proceed to reduce fares and fuel surcharges to encourage consumers to travel," the airline said, according to Dow Jones Newswires.
Malaysia Airlines' profit had plummeted 71 per cent in 2008 due to the global slowdown, while its fourth-quarter profits for 2008 were down 81 per cent to 46 million ringgit from 241.9 million ringgit a year ago.
On Monday, the airline industry body IATA has said the world's airlines are expected to lose nine billion dollars this year, almost double an estimate just three months ago, making the crisis worse than the aftermath of the September 11, 2001 attacks in the United States.
Combined with a revised estimate that it lost 10.4 billion dollars in 2008, the industry now looks set to lose almost 20 billion dollars over two years.
Airline executives however expressed hope of a turnaround next year, saying some carriers may start making money in late 2010.