Malaysia’s state-owned airline is facing questions about its survival after being hit with back-to-back disasters.
Even before the loss of two jets loaded with passengers on international flights, Malaysia Airlines had been operating in the red for three years, accumulating a deficit of $1.3 billion.
U.S. and Ukrainian intelligence officials say Malaysia’s Flight 17, flying at an altitude of 10,000 meters Thursday, was brought down by a surface-to-air missile, almost certainly supplied to the rebels by Russia.
That occurred as Malaysia’s flag carrier was still reeling from the loss of Flight 370. The Kuala Lumpur to Beijing flight disappeared March 8 after veering far off course.
"Very dire" situation
Mohshin Aziz, aviation analyst for Maybank, Malaysia’s largest financial group, describes the airline’s situation as “very dire.”
“We would expect that financial problems would definitely be taking a bigger hit and I don’t think Malaysia Airlines can survive, in its current form, by the end of the year,” he said.
Aziz says Malaysia Airlines will still enjoy the support of the government, whose officials are mandated to fly the carrier, and a sympathetic Malaysian public, which identifies the airline as integral to the nation.
“After viewing this company, analyzing this company for a long, long time I think they only have a business case domestically. Internationally, no chance,” he said.
Malaysia Airlines faced criticism and a loss of trust for its slow reaction to the disappearance of Flight 370. Despite an extensive search in waters off the western Australian coast there has been no trace of the jet and no conclusion about why it vanished.
Since last week’s downing of Flight 17, there has been further criticism of the airline for flying over a conflict zone, instead of taking a longer path that would have consumed more fuel, as some other airlines had done.
The troubled airline has already received three bailouts through Malaysia’s sovereign fund and will need a fourth huge injection of cash to survive in any form, according to industry analysts.
The carrier is offering, until Thursday, full refunds to customers who want to cancel their tickets on any flight and no penalties for changing dates for those preferring to delay travel.
And the carrier says, effective Friday, it will be retiring flight code MH17 as a “mark of respect” for the 298 people killed in the crash.
The airline also says it has no immediate plans to fly Flight 17 victims' relatives to Ukraine because of concerns about the security situation there and few family members have expressed a desire to go.
Malaysia’s prime minister is vowing to “do our best to bring back the victims” of Flight 17.
Najib Razak made that comment on a Facebook posting after meeting relatives of some of the 28 Malaysian passengers and 15 Malaysian crewmembers who were aboard the plane.
The prime minister says he understands the pro-Russia insurgents in the area “have agreed to create a safe passage for the recovery and investigation team.”
Malaysia’s transport minister and other government officials are hoping to reach the crash site as quickly as possible.
Top government officials of the United States, Australia, the Netherlands and Malaysia are among those who have expressed anger and alarm over reports that bodies and wreckage at the crash site were not secured.
Numerous world leaders are pressuring Moscow to ensure that the insurgents in eastern Ukraine allow investigators proper access to the crash site.
Multiple reports about bodies and debris being removed and tampering of potential evidence from the Boeing 777 prompted a U.S. State Department statement calling that “an affront to all those who lost loved ones and to the dignity the victims deserve.”
A chaotic scene
Australia’s prime minister, Tony Abbott, describes the crash scene as “absolutely chaotic.”
The foreign minister of the Netherlands, which lost nearly 200 of its citizens on the flight, told Ukraine’s president description of the crash site “has created a shock” among the Dutch people.
Germany’s government and the Kremlin say Russian President Vladimir Putin and German Chancellor agreed Saturday in a phone call that an independent commission, headed by the International Civil Aviation Organization, should have swift access to the site.