Malaysian Airlines (MAS) said today its profit plummeted 71 percent in 2008 due to the global slowdown and an overcrowded market, and that it would cut capacity by five percent this year.

The national carrier said that net profit in the three months to December fell 81 percent to RM46 million from RM241.9 million a year ago.

For the full year, it posted net profit of RM244 million, down from RM851.4 million in 2007, and well short of its earnings target of RM400-500 million for 2008.

idris jala and malaysia airline Managing director Idris Jala, who has overhauled the airline after massive losses in 2005, said it was a major achievement to turn a profit in the fourth quarter.

"This is solid performance, which shows that if we set our minds to do the impossible, we can do it. We maintained our profitability streak," he said in a statement.

Radical action - ultra-cheap fares

Jala said that MAS had already taken "radical action" including offering ultra-cheap fares over the second half of last year.

But he said that "bigger challenges lie ahead" and that the airline would cut capacity by 5.0 percent in 2009 after a 6.4 percent reduction in 2008, and trim costs by seven percent with a savings target of RM700 million to RM1.0 billion.

"Never waste a good crisis as this is the time to do the impossible which you wouldn't be able to do under normal circumstances," he said.

Jala did not rule out the prospect of an alliance with another airline to survive the tough times.

"There will be a tremendous push for consolidation if airlines cannot get out of the red. We will continue to seek opportunities which provide a solid, and right, platform for Malaysia Airlines," he said.