Malaysia Airlines reports profit from Vietnam market

Malaysia Airlines has reported profit from its 2008 operations in Viet Nam although this year was a challenging year for the global airline industry because of the world's oil volatile prices.

Terence Swampillai, area manager of Malaysia Airlines in Viet Nam, told the Daily on the phone that the airline ran business profitably in the Vietnamese market as it was able to maintain high seat occupancy on its flights between Viet Nam and Malaysia.

Swampillai projected average seat occupancy of 74% on Malaysia Airlines' daily services in all of 2008 though the load factor occasionally fell slightly on the routes between Kuala Lumpur of Malaysia and Hanoi and HCM City of Viet Nam.

"Load factor dropped by four percentage points due to intense competition but still remained healthy," Swampillai said, crediting the high seat occupancy for the whole year to the peak air travel season in November and December.

Swampillai did not say how much profit that Malaysia Airlines gained from the Vietnamese market for the whole year. However, he disclosed the figure in the first three quarters of 2008.

"Malaysia Airlines continues to be profitable in the Vietnamese market. From January to September 2008, we posted a net profit of RM17,500 million (nearly US$5 million)," Swampillai said.

The profit from the Vietnamese market contributed to Malaysia Airlines' profitable performance around the world over the more than two-years. "From January to September 2008, Malaysia Airlines posted a net profit of RM198 million (some US$55 million). This marks the ninth consecutive quarter in which Malaysia Airlines has made profit."

The US$55-million profit include the RM38 million the airline earned in the third quarter, when the world's oil price exceeded US$147 per barrel.

Swampillai revealed the formula to success was the transformation of Malaysia Airlines into the world's five-star value carrier. "This means delivering the quality product and service at affordable prices. We have also implemented a series of cost reduction initiatives, especially to mitigate against high fuel prices."

Swampillai said Malaysia Airlines would continue offering improved services at "reasonable prices" including everyday low fare programmes as part of the carrier's focus in order to maintain high load factor for the Vietnamese market this year.

Swampillai acknowledged that 2009 would be a very tough year. "The outlook for 2009 in Viet Nam and worldwide for Malaysia Airlines is going to be very challenging as fuel prices remain volatile and economic conditions are not expected to improve significantly."

Swampillai clarified business would be difficult for both inbound and outbound travel in Viet Nam in the face of fiercer competition and the world's current economic slump.

But, Swampillai said he and his team in Viet Nam were confident in achieving better business results because of support and cooperation from partners in Viet Nam including travel agents and tour operators.

"We will weather the storm together and emerge even more successful in 2009 than we have in 2008," Swampillai said. He pointed out fuel surcharge reduction was one of the measures to the carrier would apply to attract more passengers. (SGT)