Malaysian Airline System Bhd (MAS) may need to undertake an in-depth review of its cost structure as well as adopt a more efficient financial management model to stem its losses.
Independent non-executive director of Affin Bank, Datuk Seri Abd Aziz Abd Rahman said eventhough MAS has been attempting to contain its losses by appointing new faces in the company, it may not bring any changes.
"Many tranformations carried out by MAS, such as bringing in Tajudin Ramli and Idris Jala, but that didn't work out. It received the service excellence award but that did not translate into profits," he said this to reporters after the closing ceremony of 2012 Pahang Economic Convention here Thursday.
Analysts expect Malaysian Airline System Bhd (MAS), which posted a net loss of RM1.28 billion in its fourth quarter, to record modest earnings in the 2013 financial year.
MIDF Research said this was achievable with the cutting of unprofitable routes and collaboration with AirAsia in route rationalisation.
"It will be a struggle for MAS to return to profitability.
"Nonetheless, the collaboration with AirAsia in route rationalisation will narrow losses and earn modest positive earnings in FY 2013," it said in a research note, adding that the prevailing high fuel cost and weak air travel were major barriers for the airline to record profit.
Hence, MIDF maintained its "sell" recommendation with an unchanged target price of RM1.35, pegging its price book value in financial year 2012 to 1.8 times.
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