Kuala Lumpur : Malaysia Airlines Bhd has reported a year-on-year (yoy) revenue improvement of two per cent in the first quarter ended March 31, 2019 (Q1) on the back of increased available seat kilometres, but does not expect to break even this year due to external volatilities.
It said the increased available seat kilometres was driven by an 8 per cent increase in domestic and international capacity. Load factor was unchanged at 75.2 per cent as the airline matched increase in capacity with market demand. The airline saw a marginal growth in yield on the back of the added capacity and a positive passenger growth of 5 per cent.
The quarter saw improvement in ancillary revenue following initiatives that allow passengers greater choice and flexibility. This, coupled with competitive pricing for products such as prepaid baggage and seat selection and other ancillary products, saw an increase in ancillary revenue by 23 per cent yoy.
Izham Ismail, CEO, Group said notwithstanding an improvement in its Q1 operational performance in comparison to last year, it expects 2019 to remain extremely challenging. The competitive environment is expected to continue to tighten in 2019, driven by overcapacity in the region as well as domestic. This is largely driven by the price-sensitive leisure market which directly impacts yield.
"While the airline has hedged against fuel and forex, we will continue to be impacted by such external volatilities including the ongoing trade war between the US and China, and does not foresee to break even this year," he said in a statement.
The airline also noted a large increase in passengers in Q1 accessing the three Golden Lounges in KLIA following refurbishments and improvements in offerings.