News / Economy

Disasters May Doom Malaysia’s Flag Carrier

A Malaysia Airlines plane sits on the tarmac at Kuala Lumpur International Airport in Sepang, July 19, 2014.
A Malaysia Airlines plane sits on the tarmac at Kuala Lumpur International Airport in Sepang, July 19, 2014.

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.

FILE - Malaysian Prime Minister Najib Razak, walks away after a media conference, Kuala Lumpur International Airport, July 18, 2014.FILE - Malaysian Prime Minister Najib Razak, walks away after a media conference, Kuala Lumpur International Airport, July 18, 2014.
x
FILE - Malaysian Prime Minister Najib Razak, walks away after a media conference, Kuala Lumpur International Airport, July 18, 2014.
FILE - Malaysian Prime Minister Najib Razak, walks away after a media conference, Kuala Lumpur International Airport, July 18, 2014.

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.


Steve Herman

A veteran journalist, Steven L Herman is the Voice of America Asia correspondent.

You May Like

Hostage Crisis Could Divide Japan Over Plans to Boost Military

Japanese Chief Cabinet Secretary Yoshihide Suga said Monday the government is working closely with the Jordanian government to secure the release of remaining Japanese hostage Kenji Goto More

Video Brussels Shaken as New Greek Leader Challenges Europe’s Austerity Drive

Country's youngest ever PM Alexis Tsipras, 40, sworn in Monday and says he will restore dignity to Greece by ending spending cuts More

Multimedia National Geographic Photo Camps Empower Youth

Annual mentoring program's mission is to give young people a voice to tell their own stories through photography More

This forum has been closed.
Comment Sorting
Comments
     
by: riano baggy from: indonesia
July 22, 2014 4:25 AM
this tragedy moment can happen to all airlines, FAA must responsibility to have announce to all airlines to avoid take a path in conflict areas.


by: Not Again from: Canada
July 20, 2014 9:22 PM
Malaysia and all the nations that have victims need to sue those that fired the missile, those that provided the missile system, those that provided the personnel to operate the missile system, and those that trained the missile system's operators.
In addition, Malaysia airlines needs to sue them for any and all harm they have done to the airline; and they also need to sue them for or business' loss costs. The total amounts are huge, almost 300 lost lives, at at least 10 million a victim, close to 3 Billion; then aircraft and business losses, at least another 3 billion. Serious punitive damages must be required, because of the horrendous ways in which the remains were treated, at least 10 to 20 additional billions. An international law suit of at least 80 to 100 billion needs to be started by the victms, and the nations victimized.
All assets, including ships, aircrafts, vessels, realestate, bank accounts..... etc, of the potential culpable parties need to be preventibly be frozen, before they move the assets from the reach of the countries victimized.
The EU has much of those assets in the reach of its law/order agencies. Will the EU have the courage to do it? given their past approach, probably not, the victims need to demand it.


by: Ripon from: Bangladesh, South Asia
July 20, 2014 5:46 PM
What else has remained yet to be doomed?


by: Tom from: Texas
July 20, 2014 9:49 AM
Perhaps they should take the money given to keep the airline going and use it to provide relief and help to their starving people and enhance the country. Trying to play with the big boys by running a government airline is not real smart.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Obama Urges Closer Economic Ties During Historic India Visiti
X
Aru Pande
January 26, 2015 9:33 PM
U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video Obama Urges Closer Economic Ties During Historic India Visit

U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video US, EU Threaten New Russia Sanctions Over Ukraine

U.S. President Barack Obama has blamed Russia for an attack by Ukrainian separatists that left dozens dead in the port of Mariupol and cast further doubt on the viability of last year’s cease-fire with the Kyiv government. VOA’s Michael Bowman reports from Washington.
Video

Video White House Grapples With Yemen Counterterrorism Strategy

Reports say the U.S. has carried out a drone strike on suspected militants in Yemen, the first after President Barack Obama offered reassurances the U.S. is continuing its counterterrorism operations in the country. The future of those operations has been in question following the collapse last week of Yemen’s government. VOA White House correspondent Luis Ramirez reports.
Video

Video Kerry Warns Against Violence in Nigeria Election

US Secretary of State John Kerry visited Nigeria Sunday in a show of the level of concern within the U.S. and the international community over next month’s presidential election. Chris Stein reports.
Video

Video Zoo Animals Show Their Artistic Sides

The pursuit of happiness is so important, America's founding fathers put it in the Declaration of Independence. Any zookeeper will tell you animals need enrichment, just like humans do. So painting, and even music, are part of the Smithsonian National Zoo's program to keep the animals happy. VOA’s June Soh met some animal artists at the zoo in Washington. Faith Lapidus narrates.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video Saudi, Yemen Developments Are Sudden Complications for Obama

The death of Saudi Arabia's King Abdullah and the collapse of Yemen’s government have cast further uncertainty on U.S. efforts to fight militants in the Middle East and also contain Iran’s influence in the region. VOA White House correspondent Luis Ramirez reports on the new complications facing the Obama administration and its Middle East policy.
Video

Video Progress, Some Areas of Disagreement in Cuba Talks

U.S. and Cuban officials are reporting progress from initial talks in Havana on re-establishing diplomatic ties. U.S. Assistant Secretary of State (for Western Hemisphere Affairs) Roberta Jacobson said while there was agreement on a broad range of issues, there also are some “profound disagreements” between Washington and Havana. VOA State Department correspondent Pam Dockins has the story.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.
Video

Video S. Korean Businesses Want to End Trade Restrictions With North

Business leaders in South Korea are calling for President Park Geun-hye to ease trade restrictions with North Korea that were put in place in 2010 after the sinking of a South Korean warship.Pro-business groups argue that expanding trade and investment is not only good for business, it is also good for long-term regional peace and security. VOA’s Brian Padden reports.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid

World Currencies

EUR
USD
0.8930
JPY
USD
117.98
GBP
USD
0.6673
CAD
USD
1.2445
INR
USD
61.498

Rates may not be current.