Malaysia Aviation Group (MAG) – the parent company of national carrier Malaysia Airlines – expects its profitability to “take a beating” following a spate of operational woes, though the full financial impact remains to be seen.
MAG managing director Izham Ismail says the group had in June forecast a “comfortable” net profit for the year ending December 2024.
That outlook “will be less rosy” following the incidents in recent weeks, which forced the group to cut 20% of its schedules through the year-end in an effort to stabilise its operations. MAG was hit by delays in aircraft deliveries, as well as reliability and technical issues on its fleet of older jets.
“Admittedly, it will decline. It will take a beating,” says Izham, who was speaking to FlightGlobal in Kuala Lumpur. He says the group’s 2024 earnings will be “nowhere near” the same levels as that of the previous year.
MAG posted posted a net profit of MYR766 million ($177 million) in 2023 – finishing in the black for the first time since its restucturing.
While he declines to share specifics, Izham believes the group will improve its earnings again in 2025.
Despite the anticipated financial hit from its operational challenges, Izham insists the airline will prioritise safety over its profitability. While the capacity cuts were ongoing, Izham recalls being warned that the move would impact its bottom-line.
“I told my teams: don’t talk to me about [profit and loss] – safety comes first at all costs,” he says.
