What caused Malaysia Airlines to miss its 2018 target?

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Malaysia Airlines Missed 2018 Profitability Target Due to Multiple Factors

Malaysia Airlines failed to achieve its 2018 profitability target primarily due to a confluence of challenging market conditions and operational hurdles. These included intense competition within the aviation sector, escalating fuel prices, adverse foreign exchange rate movements, and a persistent shortage of qualified crew members. These factors collectively impacted the airline's financial performance, preventing it from reaching its profit goals for that year.
Financial Losses Escalated in 2017

The financial strain on Malaysia Airlines was evident in its reported figures for the fiscal year ending December 31, 2017. During this period, the airline's net loss saw a significant year-on-year increase of 85%, reaching RM812.11 million. This marked a continuation of a difficult financial period, as the airline had already accumulated losses amounting to RM2.35 billion between 2015 and 2017.
MAS Recovery Plan Aimed for Turnaround by 2018

The MAS Recovery Plan (MRP), introduced five years prior to the reporting period, was specifically designed to steer the airline towards profitability by the year 2018. This comprehensive strategy was intended to address the underlying issues contributing to the airline's financial distress. However, the missed target indicates that the recovery efforts, despite their intention, were insufficient to overcome the prevailing challenges within the stipulated timeframe.
Ongoing Funding and New Business Plan

Khazanah Nasional Berhad, through its parent company Malaysia Aviation Group Berhad (MAG), has continued to provide financial support to the airline. Recent capital injections have brought the total funding to RM800 million, with RM500 million disbursed in March and an additional RM300 million recently provided. This funding is part of an initial RM6 billion approved under the MRP. Malaysia Airlines is presently awaiting approval for a new long-term business plan (LTBP) which aims to achieve financial break-even by 2022 and cover its cost of capital by 2024.
Interest from Potential Buyers

The financial difficulties and ongoing restructuring efforts have attracted interest from various parties keen on acquiring Malaysia Airlines. Several entities have reportedly expressed their intent to take over the airline, including Najah Air Sdn Bhd, The Weststar Group, Jentayu Danaraksa Sdn Bhd, and a consortium comprising former employees and private individuals. Khazanah has indicated it will evaluate all serious offers based on financial and execution capabilities.

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What caused Malaysia Airlines to miss its 2018 target?

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