Annual Report 2019

RISK MITIGATION FINANCIAL RISK Fuel Price – A surge in fuel pricewouldhave a significant impact on the Group’s profits with fuel making up one of the key cost components for operations The Group mitigates this risk by actively monitoring and managing its exposure to fuel price volatility through hedging strategies. Foreign Currency – Unexpected massive currency depreciation, in particular the Malaysian Ringgit to the US Dollar, will have a detrimental effect on the Group’s cost of financing The Group mitigates this risk by managing its exposure through hedging strategies and derivative products. COMPLIANCE RISK Non-Compliance to Regulatory Requirements – Litigation risk arising from potential breach of local laws and regulations, contracts, industry guidelines and regulator/consumer authority requirements in multiple jurisdictions The Group mitigates this risk by maintaining a high level of engagement with local regulators and authorities to ensure any new regulatory requirement is understood and swiftly adhered to. The Group also constantly monitors the local regulatory landscape for new or amended regulations affecting the Group. Data Security & Privacy – Violation of data privacy laws and regulations and loss of customer confidence due to a data breach The Group has established a data governance framework and data security & privacy working group to review existing policies and ensure compliance to laws, regulations and best practices. SUSTAINABILITY RISK Sustainability Risk – Economic, environmental and social impact that, if not managed, may adversely affect the Group The Group mitigates this risk via the establishment of a Sustainability Working Group Committee that helps to provide direction on the effective and efficient implementation of sustainability strategies. The Committee, which consists of departmental representatives is driven by the Group Sustainability Team to promote proactive participation in and awareness of global sustainability matters and making improvements to long-term sustainability plans. The Group Sustainability team also ensures compliance with environmental regulatory requirements, including managing the potential impact of environmental related schemes such as the Carbon Offsetting & Reduction Scheme for International Aviation (CORSIA). STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL (CONT’D) 198 MORE THAN JUST AN AIRLINE >