By P. Prem Kumar
KUALA LUMPUR
What a difference a year makes. Last year Malaysia Airlines was voted Asian Leading Airline of the year, but in just over six months two back-to-back air disasters have almost brought it to its knees.
With the airline still struggling to recuperate from the impact of March's vanished Beijing-bound flight MH370, morale at Malaysia's national carrier has slumped to new lows with the suspected shooting down of Kuala Lumpur-bound MH17 from Amsterdam over Ukraine’s border with Russia on Thursday.
The loss of MH370 had already hit MAS capacity, one analyst telling the Anadolu Agency this week that about 60 percent of the bookings on its Chinese routes have dropped since March 8.
"I am sure the number would be more or less similar for MAS’ European routes," said Ahmad Maghfur Osman, an aviation analyst in Kuala Lumpur.
He said that although the loss of MH17 was completely unanticipated, the fear to fly with the airline would have grown.
“MAS flights from Amsterdam will see a short-term drop due to fear and brand. Usually, an airline, which has gone through similar crises, takes six months to recover. But MAS has had to deal with one [crisis] after another barely within four months.”
In an exercise that could be seen as part damage limitation, part empathy, post-MH17 Malaysia Airlines has also offered to waive any fees for passengers who wish to change airline.
“Passengers who wish to postpone or cancel their travel plans can obtain a refund, including for non-refundable tickets,” the national carrier has said - evidence, according to Singapore-based aviation expert Dr. Shanmuga Sundaram, that the airline has received an avalanche of such requests.
The airline also announced Monday it would give initial financial aid of US$5,000 to the families of each passenger on-board MH17 as a "goodwill gesture" to ease their immediate burden.
Sundaram told AA that the MH17 tragedy has paved a clearer route for the Malaysian government – the airline’s major stakeholder – to temporarily seize the airline’s operations in order to undertake a massive internal restructuring.
He said MAS no longer has a brand issue, but "an internationally-acclaimed identity crisis" that needs intensive restructuring.
“This may also include a possible privatization and the closing down [of the airline’s services] for a maximum three months," he warned.
“If they [MAS] were only having these air disaster issues alone, it is considerable for a continuation of operations. But it is also bleeding red ink, with the government having to bail it out each time it incurs a loss."
The Malaysian government owns a majority stake in MAS, through state investment arm Khazanah Nasional, along with golden shares, which allow it sole decision rights. Unfortunately for Malaysia, it has been in the red in 11 of the last 13 quarters, with total accumulated losses of over RM4 billion (US$1.26 billion) to-date - astonishing when you consider that during that time it has also accumulated the Asia Airline award and two World's 5-Star Airline Awards.
Last year alone, the airline’s net loss was RM1.17 billion, deepened from losses of RM432.58 million in 2012. MAS claimed the deeper loss was due to higher depreciation and finance charges, coupled with unrealized foreign exchange loss and high jet fuel cost.
Privatization and a massive restructuring may be the only way out for the airline, warned Sundaram.
Malaysia's loss may also prove to be the country's gain, MH17 acting as a unifier during difficult times. The country is in turmoil over allegations the present government stole the last election, transparency, ethnic tensions, Catholic Christians’ use of the word “Allah” to refer to god, disputes over racist remarks uttered by public personalities, and the ongoing saga of Anwar Ibrahim's sodomy charges and subsequent prison sentencing.
Since the tragedy, however, some of the most fervent opposition parliamentarians have stood strong behind Prime Minister Najib Razak and his government as they have spoken of finding the culprit behind the suspected shooting and bringing the party to justice.
It's also providing a rallying call for those on the street, many of them stepping forward to protect the airline in its time of need.
Accountant Bushan Kumar Barkhas told AA that Malaysia Airlines' "track record had been excellent only until the two recent tragedies."
"It needs to find its own path with a strong management team,” he said, before taking a MAS flight from Kuala Lumpur International Airport to Paris.
Businessman Steven Eng, 40, told AA that even though the airline was suffering "some issues... as a responsible Malaysian, I cannot just neglect my national airline and choose something else."
"All airlines have glitches," he said, it's just that Malaysia Airlines' have had such a huge impact.
www.aa.com.tr/en
