@twins i think lion air group pays you to talk good about them lol
i am attaching an article that says mas actually improving slowly but surely rather than just gone in to the red due to entry on malindo.
Despite optimism for improvements this year, national carrier Malaysian Airline System Bhd (MAS) reported a loss of RM375.44 million for its third-quarter (3Q) ended Sept 30. Earnings per share showed a loss of 2.25 sen, compared to 0.52 sen previously. The losses were made despite a 12.4% improvement in revenue to RM3.91 billion from the RM3.47 billion it made in the corresponding quarter last year, in which it posted a RM37.08 million net profit.
For the cumulative nine months, MAS’ net loss widened to RM830.25 million from RM483.96 million previously. Revenue for the period improved to RM11.22 billion from RM9.89 billion in 2012.
The loss was reported late yesterday when MAS stocks closed unchanged at 35 sen, but strong trading movements are expected today.
The loss, which went against market expectations, is an indication that the worst is not over for MAS, which is undergoing a comprehensive turnaround plan that is scheduled to bring the company back into the black by the end of 2014. This goal is expected to be deferred for the third time.
Last week, analysts covering the national carrier had expressed confidence that MAS would break even in the 3Q. Maybank Investment Bank Bhd expected the airline to report a RM17 million net profit on the back of seasonally strong 3Q and a better load factor.
The airline’s 3Q load factor stood at 84.8% — a historic peak for the 41-year-old carrier.
MAS said its operating expenditure in the last quarter was higher by 16% compared to the same quarter last year due to higher fuel and non-fuel variable costs, which rose in line with capacity increase and the weakening of the ringgit against the US dollar.
“Fuel and non-fuel costs for the airline increased by 16%. The increase in operating expenditure is also attributed to a one-off cost incurred for redelivery of aircraft.
“In addition, the group intensified its advertising and promotional activities amid intense competition as part of its long-term strategy to continuously strengthen presence in key markets,” MAS said in a filing to Bursa Malaysia yesterday.
Despite the loss, the carrier said its cash position remains strong at RM5.4 billion.
MAS said its operating revenue improved 13% to RM3.78 billion compared to the same quarter last year due to an increase in seat factor by 10.3 percentage points to 84.8%, on the back of a 20% increase in capacity.
“Passenger yield continued to be under pressure as competition for market share intensified regionally and globally.
Airline revenue increased by 14% while cargo revenue was comparable to last year.” MAS said it is looking to sustain strong growth in both passenger traffic and seats for the remainder of the year.
“Competition, on both the domestic and international fronts, has intensified over the year. With average fares falling across the board, the group continues to monitor market demand and focus on driving business efficiency.”
MAS said it faces competition locally from no-frill operator AirAsia Bhd and hybrid airline Malindo Air.
It said the arrival of more new aircraft will further improve its product offerings while simultaneously reducing the average age of the fleet.
The additional capacity will be used to increase frequencies to meet passenger demand and fly to new destinations, it added, while claiming that aggressive marketing and promotions, better capacity management, optimisation of asset utilisation and increasing productivity will continue to be the central focus of its business model.
In an August report, CIMB Research rated MAS ‘Underperform’ with a target price of 17 sen in anticipation that the carrier will continue registering losses for at least the next three years, with losses potentially widening further in 2014 on the back of the weakening ringgit.
Alliance Research Sdn Bhd has a target price of 23 sen while maintaining its ‘Sell’ call on the stock, given that yield is under pressure and US dollar is appreciating.
“We expect MAS’ business turnaround to take longer than expected and to continue to suffer losses,” the research firm said in its latest report on the airline.