KUALA LUMPUR: Malaysia Aviation Group (MAG) has achieved positive earnings before interest, taxes, depreciation and amortisation (Ebitda) of RM433 million for the financial year ended December 31, 2021 (FY21) from a loss of RM1.76 billion a year ago.
MAG said the group had reduced its loss for FY21 by 60 per cent compared to FY20, following sustainable strategies underlined in its enhanced Long-Term Business Plan 2.0 (LTBP2.0).
This was achieved through strong cargo performance by Malaysia Airlines Bhd (MAB) Kargo, generating revenue of RM3 billion as a result of high global demand, allowing increased freighter and belly utilisation via passenger-to-cargo flights.
"Despite lower passenger traffic and reduced capacity for Malaysia Airlines (MAB) by 62 per cent and 71 per cent respectively in 2021, MAB recorded 57 per cent higher yield in passenger revenue.
"This was assisted by its Airline Revenue Maximisation Solution (ARMS) which provides a complete and comprehensive picture of an airline's revenue and cost ecosystem, personalising fares and offers to customers at a willing-to-pay rate using predictive forecasting features," it said.
According to MAG, the restructuring the group undertook in 2021 had offered the opportunity to holistically repair its balance sheet and address decades-long legacy issues.
"This has resulted in a reduction in the group's liabilities of over RM15 billion, and eliminating RM10 billion in debt.
"Lower operating cost from its cost savings/avoidance initiatives across the group as well as lower leasing cost post its successful restructuring further contributed to the improved performance in 2021," it said.
With the gradual reopening of international borders, MAG is seeing strong uptake in passenger demand and sales contributing to the group's cash balance which remains solid.
It expects the cargo operations to continue to lead the market as the demand for cargo movement in the APAC region is expected to grow by five per cent.
"MAB and its sister airlines will gradually add capacity for both domestic and international routes, expecting to achieve more than 70 per cent capacity to pre-pandemic level," it said.
MAG said the current Russian-Ukraine conflict had raised concerns and challenges in managing operational cost, which was directly impacted by the escalating fuel price.
Fuel price at current levels of US$110-US$130 per barrel makes up to 40-45 per cent of the group's total operational cost, an increase of about 35-40 per cent from a year ago.
"All companies within the group have taken immediate steps to manage the impact of higher fuel cost.
"Safety remains the top priority for MAG and measures have been taken to avoid the conflict zone," it added.