'Tough for MAS to meet profit target this year'

WORLD ECONOMIC FORUM ON EAST ASIA

THE chairman of Malaysia Airlines (MAS) said yesterday that it will be tough for the flag carrier to meet its net profit target this year if crude oil prices remain above US$135 (RM441) a barrel.

Despite reporting seven straight quarters of profit, Tan Sri Munir Majid said that Malaysia Airlines was "under pressure" from rising jet fuel costs as global oil prices showed no signs of abating.

"We are trying our darndest to remain in the black in the second quarter," he told Dow Jones Newswires on the sidelines of a global economic forum in Kuala Lumpur.

The carrier is due to release second quarter results in August.

MAS returned to profitability in 2007 after two years of losses.

It has forecast a profit of between RM400 million and RM550 million this year.

However, the rising price of jet fuel, which accounts for about 40 per cent of its operational costs, is forcing the carrier to review unprofitable routes and freeze recruitment to cut costs.

The airline has announced plans to raise the fuel surcharge in the next few weeks to offset rising costs.

Munir urged regulators to clamp down on speculators, who he said were responsible for pushing world oil prices to record highs. - AP