Loss-making national carrier Malaysia Airlines has put back its target to return to profitability from next year to 2014 following a failed tie-up with rival budget carrier AirAsia.
The two airlines called off the strategic share swap agreement, aimed at turning around Malaysia Airlines, in early May amid pressure from its employees union which was concerned about job cuts.
Malaysia Airlines said after its annual general meeting Thursday that a “renewed” business plan — without the cooperation deal — included cutting costs to return to profit by 2014.
“We give ourselves up to 2014 basically to return to profitability, a change from our earlier target by 2013,” chief executive officer Ahmad Jauhari Yahya was quoted as saying by the national news agency Bernama.
The troubled airline said it aimed to cut operational costs by 20 percent within three years through measures including as axing loss-making routes and concentrating on lucrative routes in Asia as well as possible job losses.
The airline also aims to increase revenue per available seat-kilometer by 10 percent, it said. An official confirmed the comments Friday.
The company has announced a series of plans to overcome its financial difficulties after scrapping the share swap deal, under which AirAsia had agreed in August to buy 20.5 percent of Malaysia Airlines.
Earlier this month, Malaysia Airlines said its 2.5 billion ringgit ($786 million) Islamic bond issue to raise funds had been fully subscribed.
In February Malaysia Airlines admitted it was “in crisis” after losing 2.52 billion ringgit last year largely due to soaring fuel costs.
For the quarter ended March 31, Malaysia Airlines reported its fifth consecutive loss, of 171.8 million ringgit, although that was an improvement in the 242.3 million ringgit loss a year earlier.