Malaysia Airlines said Wednesday its losses deepened in the fourth quarter as fuel costs soared but hopes to rebound this year under a business recovery plan.
The airline posed a bigger-than-expected net loss of 1.28 billion ringgit ($427 million) for the December quarter, reversing from a profit of 226 million ringgit ($75 million) a year earlier.
Full year losses totaled 2.52 billion ringgit ($841 million) compared with a profit of 234 million ringgit ($78 million) in 2010.
Chief Executive Ahmad Jauhari Yahya said the airline's full-year performance was severely dented by a 21 percent rise in expenditure over the previous year, swamping a 2 percent rise in revenue and a 1.3 million increase in passenger numbers.
Fuel costs alone rose 33 percent to nearly $5.9 billion ringgit ($2 billion) last year, he said.
"Losses for 2011 underscore the imperative need for Malaysia Airlines to immediately adopt strong measures to stop the bleeding. This includes staff redeployment, increasing productivity and efficiency, relentless cost control and making further route reviews," he told a news conference.
Ahmad Jauhari said the outlook is challenging because passenger and cargo demand are likely to stay weak while fuel costs will stay high.
Malaysia Airlines is finalizing a plan to strengthen its balance sheet to increase its cash reserves and funding capacity, he said but declined to give details.
Under the company's recovery plan, Ahmad Jauhari said a premium regional carrier is expected to be launched by the middle of the year.
Malaysia Airlines has cut seat capacity by 9 percent this year by axing loss-making routes, underwent a management revamp and is actively seeking outside investors for its affiliated businesses, he said.
The airline will take delivery of 23 new fuel-efficient planes this year, including five superjumbo A380 aircraft, that will help cut fuel bills and boost business, he said. The A380s will be deployed on Sydney and London routes, with the first to start flying in July, he said.
"We see a pretty weak market for long haul business but we are still optimistic on the short-haul in Asia," he said. "Our business plan is for a recovery this year, to stem all our losses."