PETALING JAYA, April 13 — Malaysia Aviation Group (MAG) is on track to return to profitability in 2023 and hit the pre-pandemic ticket sales level by as early as 2024.
Chief sustainability officer Philip See said the projection was based on this year’s first quarter performance against the group’s budget plan.
He said the group’s pre-pandemic ticket sales amounted to RM10 billion whereby between three and four was ancillary revenue.
See said during the group restructuring exercise, a substantive balance sheet restructuring had been done to make it more competitive and resilient with a lot of effort being taken to add variability to the core structure.
“The key to profitability is to diversify the business, like our cargo business which did quite well during the pandemic. We hoped the momentum would continue together with the recovery of air travel,” he told reporters after the memorandum of understanding (MoU) signing ceremony between MAG and Sunway Group here today.
The MoU was signed by MAG group chief executive officer captain Izham Ismail and Sunway Group executive director Sarena Cheah.
The ceremony was witnessed by the MAG group chairman and Malaysia Airlines Bhd chairman Tan Sri Wan Zulkiflee Wan Ariffin, founder and chairman of Sunway Group Tan Sri Jeffrey Cheah and deputy chairman of Sunway Group Tan Sri Razman M Hashim.
See said the airline group is also adopting strategies such as changing business model, widening the ancillary pool and having a totally new travel experience through the Journify app.
He said the wider goals of MAG business are to widen the ancillary revenue, which the group expected to double by 2025 from the pre-pandemic level, and broaden beyond selling the flight tickets such as travel packages, seat selection, meals and more.
“Ancillary revenue is pure margin for the group. Our cost structure is 70 to 80 per cent fixed. Airlines’ business is low margins. So it is important for us to drive these all different travel experiences that is why Sunway is a very important collaboration for us.
“The asset that MAG and Sunway Group had is so complimentary. We also want to get a larger share of wallet from other parts of travel experience,” he said.
Meanwhile, in a joint statement, MAG and Sunway Group said the two-year MoU was aimed to capitalise on each other’s strengths and strong presence as catalysts to revive the country’s economy in a range of industries including aviation, property, education, medical tourism and hospitality.
They said the collaboration would allow MAG, a global aviation organisation, and Sunway, one of Southeast Asia’s leading conglomerates, to explore broad collaborative initiatives which include new business opportunities, joint marketing campaigns as well as branding and promotional activities.
Sunway Malls and Theme Parks chief executive officer HC Chan said the collaborations efforts would undoubtedly accelerate Malaysia’s economic recovery and growth that was hampered by the pandemic.
“Malaysia remained a touristic destination that has so much to offer. Through this partnership with MAG, we believed that it is time for revitalisation and recovery for these sectors once again, putting Malaysia on the map of the world,” he said.
Through this MoU, he said Malaysia Airlines would be appointed as the preferred airline of Sunway, reflecting Sunway’s confidence in the airline’s premium and reliable services across the airline’s network, both locally and internationally.
At the same time, he added that Sunway would be able to tap into new opportunities through the airline’s tour operating arm, MHholidays, the airline’s digital student travel programme, MHexplorer, and a joint reward programme via the airline’s loyalty programme Enrich. — Bernama
