HALISTER1: Malaysia Airlines Sees Growth in Intl. Mkt; Losing Local Share

Malaysia Airlines Sees Growth in Intl. Mkt; Losing Local Share

(Bloomberg) -- Passengers carried rose 12.9% to 3.57m in 1Q from yr earlier, airline says in emailed statement.
  • 1Q Load Factor at 79.4% vs 68.9% Y/Y
  • Yields lower due to intense competition and price war
  • Sees 45% improvement in forward bookings for next 6 months from June to Nov. compared to same period in 2016
  • Rapid expansion in international sales requires additional widebody aircraft in 2018 and 2019 to address profitable demand; co. exploring options for planes for possible delivery in 2018 and 2019
  • Co. in talks with Airbus on A330neo and Boeing on 787-9 for direct purchase or lease
  • Co. has firm order for 25 Boeing 737 MAX-8 planes with delivery from 4Q 2019; model anticipated to be game changer on costs for Malaysia Airlines
  • Co. maintains cautious outlook for 2017; on track for profit in 2018
  • A more aggressive price war on domestic market has happened earlier than initially predicted; weak ringgit and increased fuel price put pressure on cost
  • Advance bookings far stronger in 2017 than 2016, but airline is seeing yield pressure across all routes
  • Malaysia Airlines’ market is diverging with consistent growth and improvement on international services, but is losing market share domestically where fares are increasingly low: statement

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
AL US (Air Lease Corp)
AIR FP (Airbus SE)
MAHB MK (Malaysia Airports Holdings Bhd)

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