Struggling Malaysia Airlines on Monday posted a RM136.4 million net loss for the 2006 financial year, a better-than-expected result after undergoing major restructuring.

Losses at the state-owned national carrier were down from the RM1.14 billion reported for 2005. The airline had foreshadowed a loss of RM620 million for 2006 after launching a turnaround plan.

In a statement, the carrier attributed its 2006 performance to a marked increase in passenger revenue and cost reductions.

Revenue for 2006 reached RM13.2 billion compared to RM11.9 billion a year ago, the airline said.

For the fourth quarter from September to December, Malaysia Airlines posted a net profit of RM121.5 million against a loss of RM611.3 million in the same quarter for 2005.

It was the second consecutive quarter of profit after the airline erased red ink to see a net profit of RM240.68 million in the third quarter.

Cost-cutting exercise

"I'm delighted with our second consecutive operational profit, which clearly shows the success of our business turnaround plan," said the airline's managing director Idris Jala.

"We have exceeded all our business turnaround plan financial targets for Q1, Q2, Q3 and Q4," he said in a statement.

Under the turnaround plan, the airline axed unprofitable routes and signed code-sharing agreements and partnerships.

It also embarked on a cost-cutting exercise and began laying off 3,000 to 5,000 employees in a voluntary separation scheme.

All but 19 major domestic routes were surrendered to budget carrier AirAsia.