Malaysia Airlines (MAS) said today it was on track for a return to profitability this financial year due to a recovery in passenger numbers and restructuring.

The airline is forecasting a net profit of RM94.2 million for the year to March.

The troubled national flag-carrier expects sales growth of about six percent in the first half from a year earlier, managing director Mohamad Nor Yusof told a shareholders meeting.

Passenger levels and revenue have recovered after dropping in the wake of last year's terror attacks on New York and Washington and are currently above pre-Sept 11 levels, he told shareholders.

However, he added the Bali bombing in Indonesia on Oct 12, which killed nearly 200 people, did have an impact on the airline's business but "to what extent, we won't be able to say at this moment".

Restructuring plan

The airline, struggling under some RM10 billion in debt, embarked on a revamp aimed at returning it to the black by 2004 after the government renationalised it in February.

Shareholders at today's meeting approved a restructuring plan under which the airline would transfer 73 aircraft to a government vehicle Penerbangan Malaysia Bhd (PMB), and lease back the aircraft.

The reorganisation will also involve the financial transfer of the domestic airline to PMB but Malaysia Airlines will continue to operate the domestic service for the government body.

The company has also proposed selling its non-core assets and businesses, which include a 70 percent stake in MAS Catering Sendirian Berhad and property. - AFP