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18-07-2014, 11:07 PM
Can Malaysia Airlines survive a second disaster in four months?
AP JULY 18, 2014 4:31PM
The Malaysia Airlines logo is clearly visible on the tail of the downed Boeing 777 in Ukr
The Malaysia Airlines logo is clearly visible on the tail of the downed Boeing 777 in Ukraine. Source: Supplied
HIT by two astonishing tragedies in quick succession, the Malaysia Airlines brand may become the airline industry’s equivalent of asbestos: toxic to the public and, experts say, impossible to redeem.
Malaysia Airlines Flight 17 was downed over eastern Ukraine with 298 people aboard by what American intelligence authorities believe was a surface-to-air missile.
Just four months earlier, a Malaysia Airlines jetliner carrying 239 people disappeared about an hour after taking off from Kuala Lumpur. The jet has still not been found, a source of profound unease for travellers and the aviation industry.
“I can’t comprehend of anything they can do to save themselves,’’ said Mohshin Aziz, an aviation analyst at Maybank in Kuala Lumpur, Malaysia.
“Perception-wise it really hits home,’’ Mr Aziz said. “It’s very challenging. It’s very difficult to fight against negative perception.’’
Even before the Flight 370 mystery, state-owned Malaysia Airlines was in serious financial trouble. In an industry notorious for impoverishing shareholders and irking customers, Malaysia Airlines had long stood out for its years of restructurings and losses.
That disaster along with the often bumbling response of Malaysia Airlines and the Malaysian government deeply scarred the carrier. Now, the once proud national airline is facing the unthinkable again.
Already losing about $1.6 million a day, there will be “no miracles’’ for Malaysia Airlines, said Mr Aziz. Before the Ukrainian disaster, his opinion was the airline didn’t have the capacity to survive beyond a year.
The airline’s share price plummeted 11 per cent today.
Unlike Flight 370, the responsibility for which is pinned with Malaysia Airlines, the second disaster appears largely beyond the airline’s control. It may, however, face questions about why it continued with flight paths over eastern Ukraine, which is the heart of a violent rebellion against Kiev, when some airlines were circumventing the country.
For air travellers in Asia, who have a multitude of options thanks to the budget airline boom, the latest incident will make the Malaysian carrier even less attractive. Its brand in the rest of the world, where it became known largely because of the Flight 370 mystery, will become more closely associated with the worst fears of flyers.
Danny Gokul, an Australian university student on a layover at Incheon International Airport in South Korea, said he had flown with Malaysian Airlines before and its service was ``fantastic.’’
But he is now “very hesitant’’ about using the airline. ``Flying is scary enough.’’
His friend, Dayne Rodgers, waiting for a flight to Brisbane, said even very cheap fares might not convince him to fly with Malaysia Airlines.
“I don’t know if my Mum would let me,’’ he said.
However, as news broke of the latest disaster, some travellers were quick to show their support of the airline on its official Facebook page.
One poster said he wouldn’t be abandoning the airline.
“Sad to hear of another fatal blow to a great Airline ... despite these 2 horrific events of late blame should not be turned back upon your organisation ... Stand tall and hold your head high ... I will be back soon to use your great service.’’
Another added: ``Travelling with you guys next week from Auckland NZ to KL, to all crew stay strong our thoughts are again with you. see you on Thursday.’’
Within Malaysia, the shock is palpably raw.
“I was stunned,’’ said 48-year-old shopkeeper Reezal Mohamed. “At first I could not understand. It’s unbelievable.’’
Malaysia Airlines has been in the red for the last three years. Last year, its losses ballooned to $363 million, nearly three times larger than its 2012 loss.
As a state-owned flag carrier, it is required to fly unprofitable domestic routes, and its strong union has resisted operational changes. Nimbler discount rivals such as Air Asia have expanded rapidly, while Malaysia Airlines has been like a supertanker, slow to change direction.
For some travellers, the airline’s poor financial health is more concerning for the future than the two disasters.
“Last time I saw them, the plane was almost empty and so I suspect, probably losing a lot of money,’’ said tourist Ricky Leong as he checked in for a Malaysia Airlines flight from Hong Kong to Kuala Lumpur. “They’re not going to maintain their fleet and there’s going to be issues in the future.’’
After the disappearance of Flight 370, the biggest backlash emanated from China because its nationals were the majority of passengers on the flight. Hopes for a recovery in that crucial market might now be set back.
Tongcheng Network Technology, which operates the Chinese ticket booking website ly.com, suspended all flight ticketing and hotel bookings involving Malaysia Airlines after Flight 370 vanished.
“Now there’s this plane crash, we would be very unlikely to consider resuming it in the future,’’ said the manager of its public relations department, who only gave her surname, Zhang.
Seth Kaplan, managing partner of industry newsletter Airline Weekly, said Malaysia Airlines was in “worse shape’’ financially that almost any other airline before Flight 370 vanished.
“It’s just hard to imagine that they could have even survived the first incident,’’ he said.
AP
AP JULY 18, 2014 4:31PM
The Malaysia Airlines logo is clearly visible on the tail of the downed Boeing 777 in Ukr
The Malaysia Airlines logo is clearly visible on the tail of the downed Boeing 777 in Ukraine. Source: Supplied
HIT by two astonishing tragedies in quick succession, the Malaysia Airlines brand may become the airline industry’s equivalent of asbestos: toxic to the public and, experts say, impossible to redeem.
Malaysia Airlines Flight 17 was downed over eastern Ukraine with 298 people aboard by what American intelligence authorities believe was a surface-to-air missile.
Just four months earlier, a Malaysia Airlines jetliner carrying 239 people disappeared about an hour after taking off from Kuala Lumpur. The jet has still not been found, a source of profound unease for travellers and the aviation industry.
“I can’t comprehend of anything they can do to save themselves,’’ said Mohshin Aziz, an aviation analyst at Maybank in Kuala Lumpur, Malaysia.
“Perception-wise it really hits home,’’ Mr Aziz said. “It’s very challenging. It’s very difficult to fight against negative perception.’’
Even before the Flight 370 mystery, state-owned Malaysia Airlines was in serious financial trouble. In an industry notorious for impoverishing shareholders and irking customers, Malaysia Airlines had long stood out for its years of restructurings and losses.
That disaster along with the often bumbling response of Malaysia Airlines and the Malaysian government deeply scarred the carrier. Now, the once proud national airline is facing the unthinkable again.
Already losing about $1.6 million a day, there will be “no miracles’’ for Malaysia Airlines, said Mr Aziz. Before the Ukrainian disaster, his opinion was the airline didn’t have the capacity to survive beyond a year.
The airline’s share price plummeted 11 per cent today.
Unlike Flight 370, the responsibility for which is pinned with Malaysia Airlines, the second disaster appears largely beyond the airline’s control. It may, however, face questions about why it continued with flight paths over eastern Ukraine, which is the heart of a violent rebellion against Kiev, when some airlines were circumventing the country.
For air travellers in Asia, who have a multitude of options thanks to the budget airline boom, the latest incident will make the Malaysian carrier even less attractive. Its brand in the rest of the world, where it became known largely because of the Flight 370 mystery, will become more closely associated with the worst fears of flyers.
Danny Gokul, an Australian university student on a layover at Incheon International Airport in South Korea, said he had flown with Malaysian Airlines before and its service was ``fantastic.’’
But he is now “very hesitant’’ about using the airline. ``Flying is scary enough.’’
His friend, Dayne Rodgers, waiting for a flight to Brisbane, said even very cheap fares might not convince him to fly with Malaysia Airlines.
“I don’t know if my Mum would let me,’’ he said.
However, as news broke of the latest disaster, some travellers were quick to show their support of the airline on its official Facebook page.
One poster said he wouldn’t be abandoning the airline.
“Sad to hear of another fatal blow to a great Airline ... despite these 2 horrific events of late blame should not be turned back upon your organisation ... Stand tall and hold your head high ... I will be back soon to use your great service.’’
Another added: ``Travelling with you guys next week from Auckland NZ to KL, to all crew stay strong our thoughts are again with you. see you on Thursday.’’
Within Malaysia, the shock is palpably raw.
“I was stunned,’’ said 48-year-old shopkeeper Reezal Mohamed. “At first I could not understand. It’s unbelievable.’’
Malaysia Airlines has been in the red for the last three years. Last year, its losses ballooned to $363 million, nearly three times larger than its 2012 loss.
As a state-owned flag carrier, it is required to fly unprofitable domestic routes, and its strong union has resisted operational changes. Nimbler discount rivals such as Air Asia have expanded rapidly, while Malaysia Airlines has been like a supertanker, slow to change direction.
For some travellers, the airline’s poor financial health is more concerning for the future than the two disasters.
“Last time I saw them, the plane was almost empty and so I suspect, probably losing a lot of money,’’ said tourist Ricky Leong as he checked in for a Malaysia Airlines flight from Hong Kong to Kuala Lumpur. “They’re not going to maintain their fleet and there’s going to be issues in the future.’’
After the disappearance of Flight 370, the biggest backlash emanated from China because its nationals were the majority of passengers on the flight. Hopes for a recovery in that crucial market might now be set back.
Tongcheng Network Technology, which operates the Chinese ticket booking website ly.com, suspended all flight ticketing and hotel bookings involving Malaysia Airlines after Flight 370 vanished.
“Now there’s this plane crash, we would be very unlikely to consider resuming it in the future,’’ said the manager of its public relations department, who only gave her surname, Zhang.
Seth Kaplan, managing partner of industry newsletter Airline Weekly, said Malaysia Airlines was in “worse shape’’ financially that almost any other airline before Flight 370 vanished.
“It’s just hard to imagine that they could have even survived the first incident,’’ he said.
AP
