Malaysia Airlines gains from capacity cuts

Malaysia Airlines gains from capacity cuts

Malaysia Airlines has reduced its seat capacity by more than 30%
Malaysia Airlines has reduced its seat capacity by more than 30%

Malaysia Airlines has reported an improved first quarter performance, following capacity cuts which have reduced the airline’s seat offerings by almost a third.

Reporting its results for the January-March 2016 period, the national carrier revealed that its available seat capacity had been slashed by 30.2% compared the Q1 2015, which led to a 21.7% drop in revenue.

But the capacity reduction helped Malaysia Airlines improve its average passenger yield by 23.4% compared to the same quarter last year. Average load factors remain subdued however, at just 68.9%.

Overall, Malaysia Airlines said was “marginally profitable” in the first quarter, due to its capacity cuts, the drop in fuel prices and staff cuts. These factors helped drive a 32.9% year-on-year reduction in costs.

The airline admitted however, that it is still expecting to record a full-year loss in 2016, but this should be “significantly smaller” than previous expected. Under its turnaround plan, Malaysia Airlines is planning to be “sustainably profitable” by 2018.

Mark Elliott
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Mark Elliott
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