Malaysia Airline (Mas) Copyright

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Malaysia Airlines First Quarter 2011 Financial Results
Tengku Dato’ Sri Azmil Zahruddin (MD/CEO)
Mohd Azha b Abd Jalil (CFO)
25 May 2011
© Copyright Malaysian Airline System Berhad 2011. All rights reserved

Contents





State of the Industry
Staying on course
First Quarter 2011 Financial Results
Positioning MAS towards becoming the No 1 Airline in
Asia
• Summary

© Copyright Malaysian Airline System Berhad 2011. All rights reserved.

2

Sharp rally in oil and fuel prices
spurred by geopolitical risks
Average spread between crude oil and jet fuel widened from ~US$10 to >US$20/bbl 11 Apr 2011
SinJet US$142.85/bbl
WTI US$110.3/bbl

140

1Q10
130

average: US$85
1Q11 average: US$121

US$/bbl

120
110

42%
increase in
average jet
fuel price

SinJet

100
90

WTI Crude

80
70

1Q10

2Q10

3Q10

4Q10

1Q11

60
*Prices from Jan’10, sourced from Bloomberg

Sin Jet

WTI Crude

© Copyright Malaysian Airline System Berhad 2011. All rights reserved.

3

Tough operating conditions further squeezing
profit margins, some into negative territory

Jan-Mar
operating
profit down
41%

Jan-Mar loss of
US$202m

Source: Company reports, Airline Weekly

Operating
profit down
17%

Jan-Mar loss of
US$128m

© Copyright Malaysian Airline System Berhad 2011. All rights reserved.

4

Contents





State of the Industry
Staying on course
First Quarter 2011 Financial Results
Positioning MAS towards becoming the No 1 Airline in
Asia
• Summary

© Copyright Malaysian Airline System Berhad 2011. All rights reserved.

5

Staying on course towards becoming
Number One Airline in Asia by 2015
Remaining resilient in challenging times
Strong revenue and traffic growth recorded in 1Q11
Unit cost (ex-fuel) continues its downtrend, costs relentlessly controlled throughout the company
Modest capacity growth in response to softening demand
Progressive fares and fuel surcharge reviews
Intelligent pricing on high-load flights, aggressive selling on lean flights to maximise revenues


New revenue management system expected to be rolled out in 3Q11 to improve pricing methodology and revenues

Healthy preloads seen for the next 6 months

© Copyright Malaysian Airline System Berhad 2011. All rights reserved.

6

Contents





State of the Industry
Staying on course
First Quarter 2011 Financial Results
Positioning MAS towards becoming the No 1 Airline in
Asia
• Summary

© Copyright Malaysian Airline System Berhad 2011. All rights reserved.

7

1Q11 Results Overview
Fuel cost surged by RM321mil
• Fuel cost higher by 32% against 1Q10
• Non-fuel CASK continued downtrend, decreasing -6% to 15.6sen Traffic increased by +10%
• Capacity up +11%
• Pax load factor up +1.2ppts to 76.0%
Pax revenue up by 10%
• RASK mostly flat at 17.3 sen. Adjusted for MYR appreciation against most major currencies, RASK would have increased +1.7%
• Stronger front-end performance: Revenue increased by 40% Significant increase in fuel cost outstripped strong revenue growth • Operating loss of -RM267m
• Net loss of -RM242m
Cargo performance in line with industry
• Yield increased, loads stabilised
© Copyright Malaysian Airline System Berhad 2011. All rights reserved.

8

Significantly higher fuel prices led to operating loss
Stronger MYR further offsets strong revenue growth
121.16

98.56
89.71
85.27
86.65

290
-39*

226

233

310

137

123
-19*

*Without A380
compensation

-242

Operating Profit/(Loss)

-267

NIAT

-286

SinJet fuel price

1Q10

2Q10

3Q10

4Q10

1Q11

-535

*Average SINjet fuel price sourced from Bloomberg

© Copyright Malaysian Airline System Berhad 2011. All rights reserved.

9

Significantly higher fuel prices partially
moderated by strengthening MYR
-106
+10%
higher
volume

+325

+102

Price
increased
by USD29

USD weakened...
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