Malaysian Airlines says it will be difficult to meet net profit in 2008
06/19/2008|9:53:00 AM|Etravelblackboardasia
Wednesday, 18 June 2008´╝ÜMalaysian Airlines Chairman, Munir Majid has said that if crude oil prices remain above $135 a barrel it will be tough for the flag carrier to meet its net profit this year.

Despite recording seven straight quarters of profit, Mr. Majid said Malyasian Airlines is “under pressure” from rising fuel costs as global oil prices show no sign 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.

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

Malaysia Airlines returned to profitability in 2007 after two years of losses. It has forecast a profit of between 400 million ringgit (US$125 million) and 550 million ringgit (US$172 million) this year.

But the rising price of jet fuel, which accounts for about 40percent 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.

At present, traders pay only a 7 percent deposit for crude oil futures. "If the regulators were to raise the deposit, then there would be less speculation," he said.

Asked if the airline has raised its fuel hedging requirement this year, Munir said this isn´t possible in an environment of record high oil prices.

The airline earlier reported it had hedged 43 percent of its fuel requirements for 2008.