AGX Group Wins Vietjet Air Aviation Services Contract

Malaysia Aviation Group (MAG), the parent company of national carrier Malaysia Airlines, announced a record net profit for its financial year ended Dec 31, 2023 (FY2023). The group achieved a net profit of RM766 million, marking a significant turnaround from the RM344 million net loss recorded in the previous year.

This is the first time MAG has posted a net profit in nearly a decade. The group also reported its second consecutive year of operating profit, which nearly doubled to RM1.09 billion from RM556 million in FY2022. Total revenue for the year saw a 31% year-on-year increase, rising to RM13.85 billion. The group’s cash balance at the end of FY2023 stood at RM4.6 billion.

Strong Passenger Demand Drives Growth

The positive financial performance was primarily driven by robust passenger traffic and increased capacity. MAG experienced a 47% year-on-year growth in passenger traffic, with its airline businesses carrying a total of 20.5 million passengers. This growth was fueled by strong demand in the premium segment, increased international travel, and expanded flight frequencies.

The group’s airline capacity grew by 61% year-on-year. The overall passenger load factor was 77%, a slight dip from 78% in FY2022, which was attributed to the significant increase in capacity. Operationally, Malaysia Airlines was recognized for having one of the top three on-time performances (OTP) globally.

Divisional Performance and Fleet Modernization

While the passenger airline business thrived, the cargo arm, MAB Kargo, faced challenges. MAB Kargo’s revenue decreased to RM1.34 billion from RM2 billion the previous year, with tonnage declining by 8%. This was attributed to a softening of market demand, leading to lower profits for the cargo segment.

In 2023, MAG focused on fleet modernization by taking delivery of eight new aircraft, including four Airbus A330-900s and four Boeing B737-8s, bringing its total fleet size to 100 aircraft. The group is also in the process of selling its six A380 aircraft. Looking ahead to 2024, MAG expects to receive another 12 new aircraft and remains cautiously optimistic about navigating ongoing industry challenges such as volatile fuel prices and currency fluctuations.

Key Points

• FY2023 Net Profit: RM766 million
• FY2022 Net Loss: RM344 million
• FY2023 Operating Profit: RM1.09 billion
• FY2022 Operating Profit: RM556 million
• FY2023 Revenue: RM13.85 billion, a 31% increase year-on-year
• Cash Balance (end-FY2023): RM4.6 billion
• Passenger Traffic Growth (YoY): 47%
• Total Passengers Carried (FY2023): 20.5 million
• Airline Capacity Increase (YoY): 61%
• Passenger Load Factor (FY2023): 77%
• MAB Kargo FY2023 Revenue: RM1.34 billion
• MAB Kargo Tonnage Decline: 8%
• New Aircraft Deliveries (2023): 8
• Expected Aircraft Deliveries (2024): 12
• Total Fleet Size: 100 aircraft
• A380 Aircraft for Sale: 6

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