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Malaysia Airlines' passenger traffic grows 13% in Q1

Flag carrier adds Chinese routes to drive growth

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A Malaysia Airlines plane arrives at Kuala Lumpur International Airport in Sepang, Malaysia.   © Reuters

KUALA LUMPUR -- Malaysia Airlines said Friday that growth accelerated in the first quarter of 2017 on the back of increased capacity.

The national flag carrier, which is undergoing a turnaround with the aim of becoming profitable in 2018, said passenger traffic increased 13% year-on-year to 3.57 million, while load factor, a measure of how much an airline fills its seats, was up to 79.4%, compared to 68.9% in the same period last year.

By comparison, the Malaysian operations of low-cost carrier AirAsia carried 6.8 million passengers in the same period, a rise of 6% from last time, on a load factor of 90%.

Yields at Malaysian Airlines were lower, however, due to intense competition from rival full-service airlines and low-cost carriers, said Peter Bellew, group chief executive, in a statement. The carrier, which is not stock market listed, disclosed only partial figures and did not provide a breakdown of earnings.

With a fleet of 75 planes, the carrier is seeking more wide-body aircraft through leases to meet future demand. It said forward bookings for the June to November period were up 45% compared to the same period last year.

The airline has leased six Airbus 350s, with the first delivery expected at the end of the year, in addition to a firm order of 25 Boeing 737 MAX-8 aircraft that will be delivered in the final quarter of 2019.

It is also launching 11 new routes connecting the Malaysian cities of Kuala Lumpur, Penang and Kota Kinabalu to China's Wuhan, Fuzhou and Nanjing. A new route to Haikou has also started, while increased services were added to the Hong Kong and Shanghai routes.

The group maintained a cautious outlook for fiscal 2017 but said it was on track to profitability in 2018.

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