PETALING JAYA, Oct 2 (Bernama) -- Despite the current bumpy ride and uncertain outlook for the aviation industry globally, Malaysia Airlines (MAS) aims to return to operational profitability next year.

"We expect to get better yields and seat factors in 2010 but it's difficult to say which quarter as there are too many uncertainties," said managing director and chief executive officer Tengku Datuk Azmil Zahruddin.

The third and fourth quarters of 2009 are going to be tough but MAS is targeting to make an operating profit next year, he said at a media briefing here today.

The national carrier expects available seat kilometre (ASK) growth in 2010 to be "flat", he added.

For its second quarter ended June 30, 2009, MAS posted an operating loss of RM420 million due to lower operating revenue led by a decline in global travel and cargo movements.

Pre-tax profit during the quarter amounted to RM896.71 million while revenue stood at RM2.56 billion.

Capacity reduction will be higher in the second half of this year, Tengku Azmil said, adding that it has reduced capacity by 12 to 13 per cent in the first half.

Among the recent measures was the suspension of the New York-Stockholm-Kuala Lumpur route.

Going forward, the airline is accelerating its Business Transformation Plan, focusing on three core areas to speed up the process of turning into the World's Five Star Value Carrier but with a low-cost operation.

The core areas of focus are enhancing customer satisfaction, generating revenue and intensifying structural cost reduction.

MAS will take delivery of 35 firm orders of the B737-800 aircraft from the fourth quarter of next year and these will be used for domestic routes and those covering Asean countries, South Asia and China.

The airline has the option for another 20 planes and it will be the second in the world to take delivery of the new B737-800 Boeing with Sky Interior that provides blue sky-like lighting overhead.

The B737-800 will enable the national carrier to expand further into southern China.

MAS will take delivery of six A380 aircraft beginning 2011 which will be utilised for high-density destinations like London, Sydney and Amsterdam, Tengku Azmil said.

"We will own some of 35 aircraft and lease some," he said.

According to him, the strategy behind the fleet renewal is to provide customers with better products and services, and match demand with capacity.

In the long run, the efficiency of the new fleet will result in lower fuel cost, engineering and maintenance, and reduction in landing, parking and overflight charges, he said.

Tengku Azmil also said that MAS would continue to pursue structural cost reduction with a target to cut down RM700 million this year.

Among others, the airline also aimed to reduce overtime by 10 per cent next year while recruitment will be carried out only in critical areas, he said.

MAS will also continue to pursue strategic partnerships as "it is always open to partnerships and strategic alliances", Tengku Azmil said.

"The most important criterion in these partnerships is that it must add synergy and value add," he said.

On acquiring other airlines, Tengku Azmil said: "We are open to the idea."

MAS, he said, will also continue to grow its cargo, and third-party maintenance, repaid and overhaul (MRO) business as well as the Firefly community airline.

"Growth for MRO will be organically as well as through joint ventures," he said.

Tengku Azmil said MAS' cargo unit MASkargo aimed to return to profitability next year while MAS Aerospace Engineering was targeting to achieve RM1 billion revenue by next year and RM3 billion in 2013.

On the lighter side when asked how different his management way would be compared with former MAS heads, Tengku Azmil said: "It will be a matter of style but not substance."

-- BERNAMA