MAS defers expansion as Sars bites into revenue
Malaysia Airlines today said it would defer its expansion plans due to the Sars outbreak, which would cost the carrier at least RM131.20 million in sales losses.
Asian regional assistant general manager Rashid Khan said passenger load factor has dipped to 53 percent this month amid the Severe Acute Respiratory Syndrome (Sars) health scare which has killed more than 300 people worldwide.
International Air Transport Association data showed ticket sales for flights originating from Malaysia fell nearly 50 percent year-on-year to RM30.50 million in the second week of April alone, he said.
Malaysia Airlines today said it would defer its expansion plans due to the Sars outbreak, which would cost the carrier at least RM131.20 million in sales losses.
Asian regional assistant general manager Rashid Khan said passenger load factor has dipped to 53 percent this month amid the Severe Acute Respiratory Syndrome (Sars) health scare which has killed more than 300 people worldwide.
International Air Transport Association data showed ticket sales for flights originating from Malaysia fell nearly 50 percent year-on-year to RM30.50 million in the second week of April alone, he said.
The flag carrier, which has cancelled 716 flights on 14 routes from April to June, estimates this will result in a RM131.20 million loss in revenue, Rashid told reporters.
Singapore, Hong Kong, and destinations in China are among the routes affected.
Exploring new destinations
Rashid said the loss of flights to the Sars-affected market would account for RM31.60 million of the sales loss, while non-Sars affected market accounts for RM99.60 million.
He said the airline has implemented a crisis management plan, which includes an overall review of its business plan and developing strategies to overcome weak demand for air travel.
It would defer some of its network expansion plans and instead explore new destinations in Australia, India, South Africa and the Middle East, he said.
The carrier is also working with government agencies and travel agents to focus on domestic market, which contributes some 25 percent or two billion ringgit of its total sales, he added.
Despite putting off its expansion program, the airline would go ahead with plans to acquire new aircraft and refurbish its present fleet, said senior general manager of corporate services Mohamadon Abdullah.
"Sars has no effect on our long-term business plan. It's business as usual," Mohamadon added.
The Sars epidemic may however, throw a spanner into the carrier's aim to return to the black this year after suffering successive losses since the 1997-1998 regional economic crisis, analysts warned - AFP
