Malaysia Airlines flying high after sweeping reforms

The Malaysian flag carrier sank to its lowest ebb in 2005 when it racked up losses of 1.3 billion ringgit (US$386 million) over nine months. The dismal performance forced the introduction of sweeping reforms which saw the airline slash staff and unprofitable routes and sell non-core assets. Malaysia Airlines finally swung into the black in 2007.

Despite the global financial crisis that then hit, grounding many weak airlines, analysts are upbeat on the Malaysian carrier's fortunes, especially after it posted net profits of 490 million ringgit last year.

“We are optimistic,” Hafriz Hezry Harihodin, an aviation analyst from AmResearch, told AFP, saying an extensive fleet renewal was expected to have a positive impact on yields from 2011.

The turnaround plan has been a success, “especially in terms of bringing down unit costs, improving efficiency and strengthening balance sheets,” he said.

Under the revamp, the airline launched low-fare campaigns to fill up empty seats, imposed a recruitment freeze and embarked on efforts to boost passenger loads and expand its network more strategically. It has ordered 35 medium-range B737-800s, with the first to be delivered this year, as well as six Airbus A380s and 25 fuel-efficient A330-300s -- giving Malaysia Airlines one of the youngest fleet of any Asian carrier.

It expects to make annual savings of 300 million ringgit after receiving the first 15 A330-300s wide-body aircraft, which are scheduled for delivery between 2011 and 2016.

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