Malaysia Airlines’ Reports A $97 Million Loss After Two Flight Disasters
After the eerie mystery of Flight 370, which went missing in March, and the missile attack on Flight 17, which was downed in July, few people are rushing to buy a Malaysia Airline ticket. According to CNN Money, as cautious customers kept their distance, Malaysia Airlines suffered a $97 million loss for the April-June quarter.
The two tragedies claimed the lives of 537 passengers, so naturally, a good number of customers cancelled their reservations and Malaysia Airlines endured a 33 percent decline in weekly bookings. And the worst is still to come.
“Tragically, just as we were beginning to see signs of recovery in all regions, we were dealt the blow of MH17. The full financial impact of the double tragedies of MH370 and MH17 is expected to hit Malaysia Airlines in the second half of the year,” said Malaysia Airlines CEO Ahmad Jauhari Yahya, according to BBC.
To cushion the blow, a quarter of Malaysia Airlines’ 19,500 employees are expected be laid off — something economic analysts say must be done if the air carrier wants to remain afloat among strong competitors.
“We operate in a harsh business environment of stiff competition from regional and global carriers and high operational costs. Coupled with the impact of the two tragedies, which have damaged our brand, the need to restructure the company was accelerated,” Yahya said.
To sidestep the bad vibes customers get when they hear “Malaysia Airlines,” the air carrier plans to undergo a major rebranding process. Malaysia Airlines, as RT reports, is seeking to change its name, add new flight routes, cut unprofitable flights to Europe and China, and find new investors. But of course, it won’t be easy.
“Passengers are worried about safety, and investors are worried about profitability,” says RT. Bloomberg News says the airline will need $629 million in the next year to stay afloat.
The Malaysian government, which owns a 70 percent share of the carrier, plans to reveal its restructuring plan as early as Friday.