Kuala Lumpur – Malaysia Aviation Group (MAG), the parent company overseeing Malaysia Airlines, Firefly, Amal, and MASwings, has once again recorded a profitable year. Despite grappling with maintenance and operational hurdles, the group has set forth an audacious strategy to expand its fleet and boost non – airline revenue streams.
MAG achieved its third consecutive year of operating profit, a notable feat considering the difficulties it faced. In August last year, due to supply chain disruptions that prolonged maintenance periods and delayed new aircraft deliveries, the group made the decision to cancel more than 6,000 flights (18% of its usual schedule) during the typically strong fourth quarter. This move had a significant impact on MAG’s yield throughout the quarter and the entire financial year.
“2024 was undoubtedly a year that put our determination in MAG to the test,” Datuk Captain Izham Ismail, the group managing director of MAG, stated during a press conference in Kuala Lumpur on Thursday. “We were aware from the start that the road to recovery would not be a smooth, linear one. There would be obstacles along the way, especially after the robust financial performance we achieved in 2023. Expectations were high, and justifiably so. However, the industry faced a perfect storm, with delayed aircraft deliveries, persistent supply chain bottlenecks, and external pressures that disrupted our operations at crucial moments.”
The group’s net profit plummeted by 93% year – on – year to RM54 million, primarily due to lower yields. By the end of 2024, MAG reported an operating profit of RM113 million, an EBITDA of RM788 million, and a healthy cash balance of RM3 billion. Although the group’s revenue only decreased by 1% to RM13,679 million, the cancellation of flights across its domestic routes, large parts of Asia, and the Australia – New Zealand markets, which affected over one million customers, took a toll on its profit. Its average passenger yield dropped by 9.6% last year, and the airline incurred expenses related to rebooking passengers on alternative flights, as well as paying penalties and additional costs due to reliability issues.
Boo Hui Yee, the group chief financial officer of Malaysia Aviation Group, pointed out that if the costs associated with capacity cuts were excluded, the group would have reported a profit of around RM580 million.
Datuk Captain Izham Ismail expressed confidence that 2025 could be another profitable year, continuing MAG’s remarkable recovery since the fiscal year 2023, when the airline posted its first net profit after being restructured in 2015. A key factor in this success has been the strategic decision to focus more on the international passenger flow across its network.
“Over the past three years, the international market has contributed 90% to our top – level revenue, which is a game – changer,” Datuk Captain Izham Ismail said, adding that prior to 2017, the domestic market accounted for 55% of the revenue.
However, the MAG leader is well – aware of the broader macroeconomic challenges and uncertainties caused by ongoing supply chain issues and the Trump Administration’s tariffs. “We must remain cautious. Rising tariff – induced inflationary pressures and global supply chain volatility will continue to influence our cost structure as we move forward,” he said. “It is essential that we stay prudent, balancing cost management with the need to invest in key areas to maintain our growth momentum. Long – term growth and diversification are at the core of this approach.”
Diversification has, to some extent, helped Malaysia Aviation Group withstand the impact of capacity cuts. The group has plans to double the contribution of non – airline revenue to its overall revenue mix, aiming for 30% by 2030.
The group’s fleet is also set for an upgrade. By 2030, MAG intends to introduce a new generation of 55 narrowbody aircraft, consisting of Boeing 737 Max 8s and 737 Max 10s. Additionally, it plans to increase the number of A330neo aircraft in its long – haul fleet.
“As our fleet modernisation progresses, we are also strengthening our network to enhance connectivity and meet growing demand. With forward bookings increasing by approximately 9% year – on – year, our mainline will continue to expand its presence in key markets such as ASEAN, Australia, New Zealand, and South Asia, reinforcing our role as the gateway to Asia and beyond,” Datuk Captain Izham Ismail added.
Related topics:
Nagpur Eyes Global Reach: Direct Flights to Singapore, Malaysia, Bangkok Soon
Malaysia’s Incredible Birdlife Draws Nature Lovers Worldwide
Malaysia Airlines Partners with Trip.com to Offer MHupgrade Directly on Platform