Malaysia Airlines (MAS) said Monday its net profit plunged 65 percent in the second quarter from a year ago due to soaring fuel costs and warned the industry outlook was grim despite a retreat in global oil prices. The state-owned airline warned it may not be able to meet its profit target of between 400 million and 500 million ringgit ($121 million and $152 million) this year. Net profit fell to 40 million ringgit ($12 million) in the quarter through June, despite an 8 percent rise in revenue to 3.78 billion ringgit ($1.15 billion), it said. This was largely due to a 56 percent surge in jet fuel cost to 1.73 billion ringgit ($524 million) for the period, it said. For the first half this year, Malaysia Airlines said it posted a net profit of 160 million ringgit ($48 million) while revenue was up 7 percent to 7.53 billion ringgit ($2.3 billion). “I am pleased that we are able to make a net profit in the most difficult business environment in the airline industry's history ... but the industry outlook is still very grim,” said Managing Director Idris Jala. “It's a very difficult business environment to achieve these (full-year profit) targets but we will give it our very best shot,” he said. Pressure on the aviation industry has eased as global oil prices fell to around $114 a barrel Monday from nearly $150 a barrel in July, but Jala said it is insufficient to lift the sector out of its doldrums. At least 25 airlines had gone bankrupt this year due to high oil prices. “Anything above $100 a barrel is bad. Oil prices have marginally reduced but it must come down a lot more for the problem to go away,” he said. MAS will continue to cut capacity on routes with weak demand, trim costs and hedge its fuel requirement.
