KUALA LUMPUR / AP
The chief executive of Malaysia Airlines said on Wednesday that the carrier recorded a profit in February, its first positive monthly result in years, and is on track to return to the black by 2018.
In an interview, CEO Christoph Mueller described the airline as a “ship that has many leaks,” but said the monthly profit was a sign that things are on the right track. He said revenue has improved and costs are down, underpinned by low jet fuel prices.
Twin disasters in 2014, including the disappearance of Flight 370, hurt the airline’s reputation, but Mueller said its main problems include an unsustainable network of routes, high operating costs and archaic information technology systems, among others.
“Our target is to break even by 2018,” said Mueller, a turnaround veteran hired a year ago under a $1.5 billion overhaul that included cutting 6,000 jobs and axing unprofitable routes.
“For a company that lost 2 billion ringgit ($511 million) just last year, if you are able to break even for a month or so, it means the financial gap between revenue and cost has significantly closed, and that is good news that tells us that we are on the right trajectory,” he said.
Even before the 2014 disasters, the national carrier was already ailing from mismanagement that saddled it with at least $1.7 billion in losses since 2011.
It reeled further after Flight 370 vanished in March 2014 with 239 people on board and a second Boeing 777 carrying 298 people was shot down in Ukraine just a few months later. The company was removed from Malaysia’s stock exchange the same year, with the government pumping in cash under a radical restructuring.
Last December, the airline unveiled an alliance with Emirates that allows Malaysia Airlines to piggyback onto at least 70 of the Gulf carrier’s global routes so it can focus on Asia. The only long-haul route it has kept is to London.
Mueller called the alliance a “win-win” situation. He said Malaysia Airlines isn’t shrinking, but instead has added many new destinations to its network via the Emirates partnership.
He said the company is rightly focusing on Asia, the strongest market for international air travel, so that it can leave “strong footprints” in the region.