MASKARGO SEES MODERATE GROWTH NEXT YEAR
by Tamimi Omar
The Edge Daily, Malaysia
10-09-2007
HONG KONG: Malaysia Airlines Cargo Sdn Bhd (MASkargo) expects to
see moderate growth next year, underpinned by the recovery in the
air cargo industry, forging of partnerships with other airlines and
further enhancement of its services.
Its newly appointed managing director Shahari Sulaiman said that next
year’s air cargo growth outlook would be about 5% to 5.2% from 4% this
year, which would assist MASkargo to achieve "single-digit growth"
next year.
However, he said that net profit performance this year would likely
"be flat" due to the slower global air cargo growth. MASkargo made
a pre-tax profit of RM179 million for its financial year ended Dec
31, 2006.
Shahari said the cargo industry forecast was based on the projections
made by the International Air Transport Association (IATA) and other
analysts.
"For the first six months this year, IATA and other analysts said
growth would be 5%, but instead it was only 2.5% due to the issues
of imbalanced demand," Shahari told The Edge Financial Daily in an
interview here.
He explained that there was greater demand from one destination,
leaving the plane empty on its return flight home. To overcome the
problem, Shahari said MASkargo was looking to sign more agreements
with other airlines within its existing routes in an effort to increase
its revenue.
"We can expand coverage by working together with other airlines and
enter new markets without incurring extra cost," he said.
Shahari said that MASkargo was in talks with Air Uzbekistan to expand
coverage of both airlines. He added that the deal would be formally
signed in Uzbekistan’s capital Tuscan by year-end.
He said that under the proposed partnership, MASkargo would be
transporting Air Uzbekistan’s cargo to European and Asian countries,
while Air Uzbekistan would transport MASkargo’s cargo to Commonwealth
of Independent States (CIS) countries.
The CIS is an international organisation consisting of eleven former
Soviet Republics, which are Armenia, Azerbaijan, Belarus, Georgia,
Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Ukraine and
Uzbekistan.
Turkmenistan discontinued permanent membership as of Aug 26, 2005,
and is now an associate member.
"The CIS has never been a market for us, but with this agreement we can
transport the cargo to Tuscan and they will out load to destinations
within the CIS.
This will bring in incremental revenue for us," Shahari said.
He said MASkargo could also take advantage of further liberalisation
in the Asian region looking to further increase its presence. "Growth
in the intra-Asian region will be around 6% to 7%, so that is where
we can make money," he said.
Shahari said MASkargo would leverage on information technology (IT)
expertise to have a more efficient and more personalised products for
its clients. "We are heavily invested in IT as a management tool to
assist our business. With this, we can evaluate the actual value of
our customer and design the right package for his needs."