KUALA LUMPUR, Malaysia – Malaysia Airlines said Tuesday it suffered a second straight quarterly loss in the three months ending in June, while budget carrier AirAsia reported a 48 per cent drop in net profit due to soaring fuel costs.
Malaysia Airlines, the national flag carrier, said it doesn’t expect to make a profit in the second half of the year amid bearish market conditions in Europe, the U.S. and Japan, but losses are likely to be less severe than in the first six months.
It narrowed its losses to 527 million ringgit ($178 million) in the April-June quarter from 535 million ringgit ($180 million) a year earlier. Revenue rose 8 per cent to 3.9 billion ringgit ($1.3 billion) but fuel costs shot up 41 per cent to 1.55 billion ringgit ($522 million).
AirAsia, Southeast Asia’s largest no-frills carrier, separately said its second quarter net profit fell to 104.3 million ringgit ($35 million) from 199 million ringgit ($67 million) a year earlier. Revenue rose 16 per cent to 1.08 billion ringgit ($364 million).
It said price volatility for oil and aviation fuel clouded its outlook for the second half of the year, although it would be partly mitigated by its recent reintroduction of a fuel surcharge.
The two airlines earlier this month formed an alliance through a share swap deal to end their long rivalry and boost business.
Tune Air, the parent of AirAsia, will take a 20.5 per cent stake in Malaysia Airlines while government investment arm Khazanah Nasional – the key shareholder in the flag carrier – gets a 10 per cent stake in AirAsia.
Under the deal, Malaysia Airlines will focus on the premium market and cede low-cost routes to AirAsia. Analysts have said it could help turn around Malaysia Airlines and improve AirAsia’s access to lucrative international routes.
Malaysia Airlines said it is in the midst of forming a new leadership that would focus on plans to restore its fortunes and identify areas of collaboration with AirAsia to realize synergies and cost savings.
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