KUALA LUMPUR – Malaysia Aviation Group’s (MAG) earnings before interest, taxes, depreciation and amortisation (EBITDA) turned positive in 2021 at RM433 million, compared to a loss of -RM1.7 billion in 2020.
In a statement today, the group attributed its performance to the sustainable strategies underlined in its enhanced Long-Term Business Plan 2.0.
MAG added that it had managed to reduce its losses for the financial year ended December 31, 2021 (FY21) by 60% year-on-year (y-o-y).
“This was achieved through strong cargo performance by MAB Kargo, generating revenue of RM3 billion as a result of high global demand, allowing increased freighter and belly utilisation via passenger-to-cargo flights.
“In 2021, MAB’s passenger revenue yield increased by 57%, assisted by its Airline Revenue Maximisation Solution (Arms),” it said.
The Arms provides a complete and comprehensive picture of an airline’s revenue and cost ecosystem, personalising fares and offers to customers at a willing-to-pay rate using predictive forecasting features.
MAG said the restructuring exercise implemented in 2021 enabled the group to holistically repair its balance sheet and address decades-long legacy issues, resulting in a reduction in the group’s liabilities of over RM15 billion and eliminating RM10 billion worth of debts.
Lower operating costs from cost savings/avoidance initiatives across the group’s operations as well as lower leasing costs post-restructuring further contributed to the improved performance in 2021, it said.
It noted that passenger traffic and capacity were down by 56% y-o-y and 70% y-o-y, respectively, due to continued domestic and global travel restrictions for the most part of 2021.
Moving forward, the group foresees strong uptake in passenger demand and sales contributing to its cash balance following the gradual reopening of international borders.
“Cargo operations will continue to lead the market as the demand for cargo movement in the Asia-Pacific region is expected to grow by 5.0%.
“MAB and its sister airlines will gradually raise the capacity for both domestic and international routes, expecting to achieve more than 70% of the pre-pandemic capacity level,” it said.
Meanwhile, MAG said the current Russian-Ukraine conflict has raised concerns and challenges in managing operational cost, which is directly impacted by the escalating fuel price.
It said fuel price at current levels of US$110-US$130 per barrel makes up to 40%-45% of the group’s total operational cost – an increase of between 35% and 40% from a year ago.
“All companies within the group have taken immediate steps to manage the impact of higher fuel cost,” it said, adding that safety remains the group’s top priority and measures have been taken to avoid the conflict zone. – Bernama, April 21, 2022
