Travelers Abandon Malaysia Airlines After MH370 Disappearance

Ahmad Jauhari YahyaMalaysia Airlines has seen its losses widen after Flight 370 vanished over two months ago, raising questions about the future of the 76-year-old carrier.

The company’s net loss rose by 59% to 443m ringgit ($138m; £82m) in the January-to-March period, marking its fifth straight quarter of losses.

The firm attributed it to “tough operating conditions” and “negative sentiment”.

Investors shrugged off the news with shares rising 2.4%.

Only 30% of the company is able to be bought freely on the stock exchange in Kuala Lumpur, with the rest held by state investment firm Khazanah Nasional.

Of the 30% that trades on Malaysia’s stock exchange, most of that is owned by the country’s pension funds and other institutions, leaving a small proportion for retail investors to trade.

Overall though, the firm has lost more than 40% of its market value this year.

Flight 370 went missing on 8 March while flying from Kuala Lumpur to Beijing, leading to a massive search and rescue operation that is still ongoing and may cost millions of dollars.

The Malaysian government believes the plane ended its journey in the Indian Ocean, but no trace of the plane or wreckage has been found so far.

The crisis led to a high number of cancellations and reputational damage to the carrier, including a 60% drop in sales from China.

About two-thirds of the 239 people on board Flight 370 were from China, prompting boycotts by some travel agents on the Mainland.

Malaysia Airlines chief executive Ahmad Jauhari Yahya said the disappearance of Flight 370 added to its poor results, which were “not unexpected”.

“The results were made worse with the impact on air travel in general following the disappearance of MH370. The whole market has reacted by slowing down demand,” he said in a statement.

The company “needs to accelerate efforts to improve its revenue stream and better manage our high costs which have increased” he added.

“This need has become even more urgent for Malaysia Airlines’ future survival and sustainability in a market that is not showing any signs of letting up on competition”.

 

Loading...

Source: BBC

Leave a Reply

x

Check Also

China: Man executed for rape and murder of 'sex slaves'

China has executed a man who kept six women as “sex slaves” and forced three ...