Malaysia Airlines expects another year of losses in 2012, before the “right sizing” of its network, staff and non-core businesses helps it get back into the black in 2013.
MAS group chief executive officer Ahmad Jauhari Yahya yesterday said the airline expects to start generating positive operating cash flow next year, but is still likely to post a net loss of RM165 million.
The airline reported a loss of RM1.2 billion for the first three quarters of 2011 and does not expect to make a profit for the full year.
“We firmly believe all is not lost,” Ahmad Jauhari said in his first meeting with the media since his appointment more than three months ago.
Also present was group deputy chief execuB4tive officer Mohammed Rashdan Yusof.
Ahmad Jauhari said the airline would explore all options in handling the issue of its 20,000 staff strength, adding that a separation scheme would be a last resort.
“First, we will have to spin off our businesses as separate entities, then we’ll see about relocating staff so that we operate at optimum level,” he said.
MAS also has an engineering division, a pilot training and safety academy, ground handling division and a cargo arm.
According to the recovery plan, MAS is looking to generate between RM1.2 billion and RM1.5 billion in cash through a combination of a smaller network, improved revenue management and sales and marketing efforts, re-negotiation of contracts and spinning off of its subsidiaries.
Ahmad Jauhari does not rule out the possibility of disposing of its other businesses such as cargo and engineering entirely if the price is right.
However, he maintained that the idea of bringing in strategic partners is to allow it to grow to its full potential and help reduce its own costs.
The national carrier plans to shrink its network by 12 per cent in 2012 by suspending routes to South Africa, Argentina and Dubai, among others.
According to MAS, 40 per cent of its long-haul routes are losing money.
MAS will operate only 88 aircraft in 2012, with plans to end operating leases for 36 aircraft.
Despite cuts, there are plans to increase frequencies to destinations such as Manila, Jakarta and Narita in Japan.
Ahmad Jauhari said MAS was in talks with not only Australian carrier Qantas Airways but also other carriers on potential partnerships.
He did not elaborate.
On the Comprehensive Collaboration Framework (CCF) with AirAsia and AirAsia X announced in August this year, he said MAS had begun discussions with them on joint procurement and consolidation of key activities that could bring a savings of RM100 million.
"I am not saying that it would have been impossible to have this collaboration with AirAsia and AirAsia X if we didn't have the CCF, but it certainly makes it easier," Ahmad Jauhari said.
He also said there were opportunities for further collaboration.
MAS group chief executive officer Ahmad Jauhari Yahya yesterday said the airline expects to start generating positive operating cash flow next year, but is still likely to post a net loss of RM165 million.
The airline reported a loss of RM1.2 billion for the first three quarters of 2011 and does not expect to make a profit for the full year.
“We firmly believe all is not lost,” Ahmad Jauhari said in his first meeting with the media since his appointment more than three months ago.
Also present was group deputy chief execuB4tive officer Mohammed Rashdan Yusof.
Ahmad Jauhari said the airline would explore all options in handling the issue of its 20,000 staff strength, adding that a separation scheme would be a last resort.
“First, we will have to spin off our businesses as separate entities, then we’ll see about relocating staff so that we operate at optimum level,” he said.
MAS also has an engineering division, a pilot training and safety academy, ground handling division and a cargo arm.
According to the recovery plan, MAS is looking to generate between RM1.2 billion and RM1.5 billion in cash through a combination of a smaller network, improved revenue management and sales and marketing efforts, re-negotiation of contracts and spinning off of its subsidiaries.
Ahmad Jauhari does not rule out the possibility of disposing of its other businesses such as cargo and engineering entirely if the price is right.
However, he maintained that the idea of bringing in strategic partners is to allow it to grow to its full potential and help reduce its own costs.
The national carrier plans to shrink its network by 12 per cent in 2012 by suspending routes to South Africa, Argentina and Dubai, among others.
According to MAS, 40 per cent of its long-haul routes are losing money.
MAS will operate only 88 aircraft in 2012, with plans to end operating leases for 36 aircraft.
Despite cuts, there are plans to increase frequencies to destinations such as Manila, Jakarta and Narita in Japan.
Ahmad Jauhari said MAS was in talks with not only Australian carrier Qantas Airways but also other carriers on potential partnerships.
He did not elaborate.
On the Comprehensive Collaboration Framework (CCF) with AirAsia and AirAsia X announced in August this year, he said MAS had begun discussions with them on joint procurement and consolidation of key activities that could bring a savings of RM100 million.
"I am not saying that it would have been impossible to have this collaboration with AirAsia and AirAsia X if we didn't have the CCF, but it certainly makes it easier," Ahmad Jauhari said.
He also said there were opportunities for further collaboration.
