Malaysia Airlines chief executive Peter Bellew, giving an example, said this time last year, the load factor for the Singapore-Kuala Lumpur route was 35-40 per cent.
Today, he said, it was “generally full” all the time, including the business class.
“A lot of our flights are full and we are turning away a lot of customers. Our staff can’t get seats as well. It’s a good problem to have, but it’s still a problem. This time last year, we were cancelling flights as we didn’t have customers,” he was quoted by Singapore’s Business Times as saying.
It might be difficult to believe that just two years ago the company was almost on the brink of collapse following two tragedies.
On March 8, 2014, MH370, vanished shortly after taking off from Kuala Lumpur bound for Beijing with 239 people on board. It still remains a mystery. And on July 17, the same year, MH17 was shot down by a missile, killing all 298 people on board, over a war zone in eastern Ukraine.
“The numbers don’t lie. We had 90% load factor (in December 2016). And we are whacking Singapore Airlines, Garuda and Cathay Pacific. We are doing pretty good,” Bellew told the Business Times.
Over the same month, SIA’s load factor stood at 82.9%, Garuda’s at 77.4% per cent and Cathay Pacific’s at 85%, according to the report.
Traffic rose 5% to 3.8 million customers from a quarter ago, while average fares dropped 3% over the quarter.
Among the reasons for the turnaround are better management of resources and finances, simplification of the fare structure, and making its website more user-friendly.
Bellew said:”Previously, the seats weren’t filled as the airline sold them at high fares. We had really, really expensive fares and we would panic at the end when the aircraft was empty and then give unbelievably cheap fares. The whole mix was wrong.”
The airline now has a stepped approach to fare pricing – the earlier one makes a booking, the better the deal.
Forward bookings for the next six months for business class travel have doubled and overall, risen 50% from last year, said the Business Times report.
Among Bellew’s targets for this year: to carry 15 million passengers versus 13.9 million last year; an on-time performance of over 80%; halving the baggage mishandling rate; and for the airline to wrap the year at 25% ahead of budgeted loss.
However, according to the report, industry watchers are uneasy with figures that Malaysia Airlines has not published, and the fact that it received a RM6 billion lifeline from Khazanah Nasional Berhad – public funds – for its survival.
The airline said it finished the year 49% ahead of its budgeted loss for the period without providing absolute or comparative numbers.
BT quoted an unnamed analyst as saying: “It isn’t listed anymore, so it’s tough to know how it’s really doing without the official figures. I can’t imagine it’s so easy for the airline to be profitable next year.”