MAS reports Q1 loss after fuel costs surge

MAS reports Q1 loss after fuel costs surge

Malaysian Airline System Bhd. said on Monday it posted a first- quarter financial loss of 280.7 million ringgit (US$73.9 million) in the three months ending June 30 because of soaring fuel costs.

It was the first time the company reported a quarterly loss since April-June 2003, when the region's travel industry was hit by the outbreak of severe acute respiratory syndrome, or SARS.

Malaysian Airline said the loss occurred as fuel costs surged 58 percent compared to April-June last year, when the airline had a net profit of 26.6 million ringgit.

The company operates national carrier Malaysia Airlines and owns Southeast Asia's biggest passenger plane fleet of about 100 aircraft.

Malaysian Airline will find it difficult to be profitable for this full financial year, chairman Munir Majid said in a briefing where the results were announced.

In a statement to the stock exchange, the airline didn't provide an earnings guidance, but said yields for its regional and Indian markets will be under pressure following rapid liberalization in air access and intensifying competition.

"High fuel prices, higher interest rates and the recent London bombing may dampen economic growth and travel in developed countries such as in Europe for the latter part of the calendar year," the airline added.

However, it noted that demand for travel "has remained strong" despite fuel surcharges.

The months of July-September are also the peak period for Middle Eastern and European visitors, and passenger load is expected to be high, the company said.

Malaysian Airline also announced that its managing director, Ahmad Fuaad Dahlan, was retiring from the company effective on Monday.

No other details were immediately available. -- AP