Tag Archives: 081

Malaysia Airlines is “technically bankrupt”, will cut 6,000 jobs and sell two Airbus A380s

Malaysia Airlines (Kuala Lumpur) is “technically bankrupt” according to its new CEO Christoph Mueller, formerly of Aer Lingus. Mueller announced today at a press conference the company will cut around 6,000 jobs in order to reduce costs. The airline continues to operate normally.

The airline will also rebrand on September 1. Mueller did not want to offer any details on the rebranding.

Malaysia logo-1

Mueller also stated the new airline could break even by 2018.

A full review is underway on all routes and some routes will be dropped.

As previously reported, a new legal entity, Malaysia Airlines Bhd (MAB), will replace the technically bankrupt Malaysian Airline System Bhd (MAS).

Read the full report from the BBC: CLICK HERE

An analyst comment from Ken Odeluga, a senior market analyst at www.cityindex.co.uk

City Index logo
Christopher Mueller’s strategic comment very much suggests the recently appointed CEO is trying to afford himself maximum flexibility in the difficult months ahead.

There’s a moderate possibility the airline will in practice not be formally declared bankrupt.
We note Malaysian bankruptcy law provides a much lower threshold to judge going concerns than would apply to Malaysian Airlines.

Its balance sheet is remarkably clean under the circumstances with about $810m of accumulated losses including $75m of hedge accounting.

Aside from that, there is no other red ink at all—no significant impairments or other risky effects and its most recent pre-tax margin at 17% is well above MA’s internal run-rate.
The burdens that exist are of course not inconsiderable, but the point is, the airline has been carrying them for longer than its crisis has been going on.

Its bigger problems involve the significant depreciation in the ringgit against the dollar that continues to shave off its room to manoeuvre, not to mention political interference, powerful unions, and more than a whiff of alleged corruption.

MA’s cost base could be about 20% higher than those of its rivals.

Mueller will need in the near-to-immediate term, all his negotiating, persuasive and coercive skills in dealing with all sorts of stakeholders—those which are legitimate and those for whom that term is more arguable.

At least there does now appear to be a will in the State apparatus that wasn’t there a year ago.

Mueller will have the ear of those strong enough to bulldozer parties which might attempt block the root-and-branch reform of the airline that will be necessary to make it what it may never really have been—competitive.

Copyright Photo above: SPA/AirlinersGallery.com. Malaysia Airlines is reviewing its fleet of 13 Boeing 777-200 ERs and will also attempt to find buyers for two of its six Airbus A380s. Airbus A380-841 9M-MNB (msn 081) approaches the runway at London’s Heathrow Airport.

Malaysia Airlines aircraft slide show: AG Airline Slide Show

Video:

Malaysia Airlines considers a new name, brand and livery

Malaysia Airlines (Kuala Lumpur), owned by a majority share by a holding company of the Malaysian government, is considering changes in the the wake of the two tragic accidents this year.

According to RT.com, the government is considering a rebrand, a different ownership restructure, a possible new name and an adjustment of its route network.

Malaysia Airlines is very likely to change.

As far as the livery, the two ill-fated Boeing 777-200 ERs wore the older 1987 livery (above) which features the red and blue Kelantan Wau Bulan (Moon Dragon Kite) tail logo which has been seen in the headlines over and over, especially with the debris in eastern Ukraine. Any brand refresh would probably retire this iconic and historic logo.

Read the full article: CLICK HERE

Top Copyright Photo: Richard Vandervord/AirlinersGallery.com. Boeing 737-8FZ 9M-MLH (msn 31723) is pictured in action at Phuket, Thailand in the 1987 color scheme.

Malaysia Airlines: AG Slide Show

Below Copyright Photo: Ivan K. Nishimura/AirlinersGallery.com. Malaysia refreshed the red and blue Kelantan Wau Bulan (kite) livery in 2010 with this new twin arc look while retaining the kite tail logo. Boeing 737-8H6 9M-MSE (msn 40147) passes through Honolulu on delivery.

Below Copyright Photo: Michael B. Ing/AirlinersGallery.com. When Malaysia introduced the new Airbus A380, the airline unveiled this special A380 livery (for only the A380s) in 2012. The red and blue kite morphed into a blue kite for the A380s. Is this enough of a change? Probably not. Airbus A380-841 9M-MNB (msn 081) departs from London (Heathrow).

Bottom Copyright Photo: Christian Volpati/AirlinersGallery.com. When MSA was split into Malaysian Airline System (MAS) and Singapore Airlines, Malaysian (later Malaysia Airlines) originally introduced this livery in 1972. As you will note, the original livery featured a red and white kite tail logo. Dropping this historic logo will be a tough decision for the airline but unfortunately it is now a tarnished logo. Boeing 737-2H6 9M-MBH (msn 20926) prepares to depart from the gate at Kuala Lumpur.

Poll:

 

Malaysia to introduce the Airbus A380 on the Beijing route on March 1

Malaysia Airlines (Kuala Lumpur) will introduce the Airbus A380 on the Kuala Lumpur-Beijing route on March 1, 2013 according to Airline Route.

On the financial side, the company reported an operating loss in the second quarter. Here is the full report:

“Malaysia Airlines has announced a reduced operating loss of RM102 million for the second quarter ended 30 June 2012 compared to RM443 million in the same period last year. The significant 77% improvement in performance year-on-year (y-o-y) at the operating level was due to efforts in the pricing and revenue management area plus lower fuel costs and lower passenger-related costs in line with capacity cuts.

The operating loss for the second quarter was also lower than the operating loss of RM307 million achieved in the first quarter of 2012. For the second quarter of 2012, total revenue fell 6% to RM3.2 billion compared to RM3.4 billion in the previous year following the Route Rationalisation programme in late 2011 and early 2012 to cut several loss-making and low yielding routes.

Group expenditure reduced 13% y-o-y to RM3.4 billion. Fuel costs, which accounted for 37% of expenditure, fell 18% to RM1.3 billion following a 15% drop in consumption. The same quarter also saw a drop in jet fuel price to an average USD132 per barrel from USD140 per barrel y-o-y. Non-fuel costs dropped 10%.

Aircraft leasing costs reduced 9% due to the return of two freighter Boeing 747 aircraft. Overall maintenance costs fell by 16% whilst handling and landing costs fell some 20%. On the other hand, depreciation of aircraft increased 35% in the second quarter due to additions to the fleet with the arrival of 5 new aircraft including the first of six A380 ordered as part of its fleet renewal program.

The Group’s net loss after interest and taxes stood at RM348.7 million for the second quarter ended 30 June 2012, equivalent to a 34% improvement on the loss of RM525.8 million registered in the same period y-o-y. Included in the second quarter 2012 results was a forex loss of RM173.0 million due to the strengthening of the US Dollar against the Ringgit.

For the 6 months ended 30 June 2012, Malaysia Airlines’ net loss stood at RM520.1 million, 32% better than the previous loss of RM767.4 million for the same period in 2011.”

In other news, on August 6, Boeing and Malaysia Airlines celebrated the direct delivery of the airline’s 75th 737 aircraft during an event at Boeing Field. The airplane, a Next-Generation 737-800, arrived in Kuala Lumpur, Malaysia on August 8, 2012.

The airplane comes with the 787 Dreamliner-inspired Boeing Sky Interior, which features larger pivoting overhead stowage bins, larger window reveals and LED lighting to enhance the sense of spaciousness. Malaysia Airlines was the Asia launch customer for the Boeing Sky Interior in October 2010.

Malaysia Airlines took delivery of its first 737 in 1972 and has operated the 737-200, 737-300, 737-400, 737-500 and 737-800.

Copyright Photo: Rob Skinkis. Airbus A380-841 9M-MNB (msn 081) climbs away from London (Heathrow) in the full special livery.

Frameable Color Prints and Posters Available: 

Malaysia Airlines Slide Show: