Malaysia Airlines recorded a stunning net loss of RM2.52 billion for 2011 and the company is now in “crisis”, the national flag carrier said today. The airline reported a massive net loss of RM1.28 billion in the fourth quarter, which was about as much as the first three quarters combined.
The company’s cash reserves more than halved to RM1 billion at the end of last year from RM2.1 billion at the end of 2010 and net assets plunged from RM3.5 billion to RM1.1 billion. Other major expenditure that MAS said contributed to the loss included provisions for the redelivery of aircraft (RM602 million), impairment of freighters (RM314 million) and stock obsolescence (RM179 million).
Ahmad said that immediate action plans include strengthening the airline’s balance sheet, winning back customers by introducing branded customer experiences and more aggressive marketing, relentless cost focus and launching its new regional airline by the middle of the year.
The national carrier also suffered the indignity of having its market capitalisation surpassed by younger upstart AirAsia after its share price fell to record lows.
Jauhari said that the company would now focus on executing the business turnaround plan that was announced in December. The business turnaround plan projects the airline to improve its performance in 2012 to somewhere between breakeven and a net loss of RM165 million.