Malaysia Airlines may struggle to take off after double disasters

Written by Associated Press | Hong Kong | Updated: Jul 19 2014, 07:09am hrs
Hit by two astonishing tragedies in quick succession, the Malaysia Airlines brand may become the airline industry's equivalent of asbestos or News of the World - toxic to the public and, experts say, impossible to redeem.

Malaysia Airlines Flight 17 was downed over eastern Ukraine on Thursday 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. Even before the Flight 370 mystery, state-owned Malaysia Airlines was in serious financial trouble. In an industry infamous for impoverishing shareholders and irking customers, Malaysia Airlines had long stood out for its years of restructurings and losses.

The Flight 370 disaster along with the often erratic response of Malaysia Airlines and the Malaysian government deeply scarred the carrier. Now, the once proud national airline is facing the unthinkable again. The airline's share price plummeted 11% on Friday. Ukraine has accused pro-Russian separatists of shooting down the plane flying from Amsterdam to Kuala Lumpur. The rebels denied it.

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, at the heart of a violent rebellion against Kievss, when some airlines were circumventing the country. The flight route was declared safe by the International Civil Aviation Organization.

For air travellers in Asia, who have a multitude of options thanks to a 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, is now even more closely associated with the worst fears of fliers.

Malaysia Airlines has been in the red for the last three years. Last year, its losses ballooned to 1.17 billion ringgit ($363 million), nearly three times larger than its 433 million ringgit loss in 2012.