>>> Second quarter's financial woes for Malaysia Airlines


MALAYSIA AIRLINES YESTERDAY revealed dismal second quarter's figures. For the period July - September 2005, the company's losses hit a high of RM367.7 million; RM87 million higher than its first quarter's deficit.

The airline, unlikely to profit in FY2005, blames rising fuel and other costs for its financial woes. So far this year, losses reached a staggering RM648.4 million.

In the 2nd quarter, overall operational costs hit a high of RM2.84 billion. Fuel costs rose by 45% to RM1.2 billion. Staff and plane servicing costs spiralled too.

MAS operates under severe constraints: overstaffing, unprofitable routes and poor management. Poor corporate decisions led to splurges on expensive paintings for its chairman's office and extravagant consultancy services on (of all things) cost-cutting measures.

It has to maintain - often under government's direction - flights which drain its budget, such as those connections within East Malaysia and the long-haul to Buenos Aires.

MAS faces difficulty in mitigating public's outcry over its losses, especially after the government bought out its entire aircraft fleet.

A projected total loss of RM1 billion for this financial year, which ends in December, seems inevitable.


DY