KUALA LUMPUR, March 2 (Xinhua) -- Malaysia Airlines remains cautious for 2018 as overcapacity remains a regional challenge.

The national carrier said in a statement Friday that it anticipated that supply and capacity pressure will continue to put a stress on yields, although the effect for 2018 is expected to be moderate.

In the fourth quarter last year, the group's load factors fell to 77 percent from 80.9 percent a year ago.

This was despite its total revenue for the fourth quarter rising 2 percent year-on-year, and passenger yield growing to 23.6 cents from 21.5 cents a year ago.

"Overall, the airline did underperform against budget compared to the previous year. This was due to a weaker first half impacted by a weak pricing strategy as well as the hike in exchange rates and fuel," Malaysia Airlines Group Chief Executive Officer Izham Ismail said.

The airline did recover in the second half with closer oversight on yield management and ended the year in a stronger position, he added.

"Moving forward, we will continue to focus on and drive yield to cushion the group from rising fuel costs and forex volatility," he said.

Although Southeast Asia has strong traffic growth, he sees overcapacity remains a challenge and pressuring yields.

In addressing the overcapacity in the region, the carrier has expanded to China with four new routes including Nanjing and Haikou.

It is noted that the airline will be receiving six more A330-200s throughout 2018, which will be operated on secondary Asia Pacific cities from Australia or New Zealand to ASEAN (Association of Southeast Asian nations) and South Asia.