By Chan Quan Min
Malaysia Airlines achieved its highest passenger load factor in a decade, filling some 84.3% of seat capacity, up seven points year-on-year, recently published operational statistics for the month of June 2013 reveal.
The flag carrier also posted a record passenger count for the month in review with 1.5 million passengers carried in June alone.
From the same month last year, the total number of passengers has risen by approximately 12,600 passengers per day or 33% on average.
The reported load factor for international sectors are well within the national airline’s internal target of 83% – 85% set earlier this year for flights to destinations outside of Malaysia.
For domestic flights, average load factor was reported at 83.7%, far higher than Malaysia Airlines’ own internal target of 75% – 78%.
The encouraging operating statistics come ahead of the airline’s formal second-quarter financial results announcement scheduled for Aug 20.
Ahmad Jauhari
Since the appointment of Ahmad Jauhari Yahya to the position of CEO, Malaysia Airlines has been pursuing a load active strategy and has attempted fill as many empty seats as possible.
Indeed, first-quarter results earlier this year demonstrated a marked improvement in passenger load factor from the previous year, a trend that continued in the ensuing months up to June.
In tweaking the airline’s revenue management system to sell more seats, Malaysia Airlines had to resort to heavy discounting, which inevitably lead to a drop in first-quarter passenger yield, a measure of average fare per paying passenger for a given distance.
In a report dated May 30 this year, Mohshin Aziz, a Maybank IB research analyst said Malaysia Airlines’ high load factor targets “will require MAS to discount its ticket prices to spruce up demand.”
Industry watchers will have to wait until later today to see if rising passenger numbers and load factor have translated into improved earnings.
Malaysia Airlines has not turned a profit since 2010, the airline’s annual reports show.
Rise in passenger numbers absorb capacity increase.
Load factor has risen even as total seat capacity has increased with the introduction of six new Airbus A380 double-deck aircraft on European routes as well as additional Boeing 737-800 narrow-body planes for shorter routes.
Meanwhile, aircraft utilisation rates have improved. Malaysia Airlines is reportedly now flying 17% more flights per day for approximately the same number of aircraft and staff as last year.
Several industry news sources cite the positive trend to the introduction of new aircraft, namely the Airbus A380 and the airline gaining full membership of the Oneworld Alliance.
Jauhari himself is a fan of the Airbus A380, believing the addition to the fleet boosted passenger numbers. He claimed a load factor above 80% and “sometimes even full load” for the aircraft model which began flying the London route in July last year, detailed a mid-June Bloomberg report.
Also in June, Malaysia Airlines head of commercial, Hugh Dunleavy claimed that the airline managed to improve its interline bookings by approximately 60% year-on-year for the first half of 2013. He credited the airline’s participation in the Oneworld Alliance for this increase.
Talk has been rampant that the airline could be privatised since Idris Jala remarked last week that the government could benefit the national airline by exiting the aviation sector.
However, in a statement today, Prime Minister Najib Abdul Razak refuted rumours of a fire-sale, pulling the plug on a short, day long rally yesterday that added 3.5 sen to the airline’s stock.
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