Can Malaysia Airlines Survive After Two Devastating Disasters?

After two tragic aviation disasters, Malaysia Airlines is fighting to survive, but is it possible? More than 500 people have perished between the MH370 and last week’s MH17 incidents, with the former not resolved and no signs of debris in the area where investigators believe the plane went down.

Following Thursday’s downing of Malaysia Airlines Flight MH17 in eastern Ukraine, experts are having doubts that Malaysia’s national carrier can survive such catastrophic events. If it wasn’t bad enough that hundreds of lives have been lost on board their planes, the airliner has been harshly criticized by victim’s families for their poor handling of the situation and treatment of distraught relatives.

“The outlook is very dire,” says Mohshin Aziz, an aviation analyst at Kuala Lumpur–based Maybank. The airline “won’t be able to survive beyond the year in its current form,” Aziz opined.

The twin tragedies would be a blow for any company, much less one that was already in financial trouble, as is the case for Malaysia Airlines. The carrier has had to operate in the extremely competitive Asian market against highly reputable companies such as Singapore Airlines and Cathay Pacific based in Hong Kong.

The next few months will prove crucial for the survival of Malaysia Airlines, but the losses suffered by their parent company Malaysian Airline System, which has been in the red by over $1.4 billion since 2011, are staggering. Added to the financial situation is the tragic loss of hundreds of lives under their watch, which analysts believe will scare passengers from flying the airliner or force the company into handing out discounts to lure weary travelers.

According to Daniel Tsang, founder of consultancy Aspire Aviation in Hong Kong, bankruptcy would be a good option for Malaysia Airlines at this time and would allow the company to become more competitive in the region.

“It will never get back to the large size it was before. The sooner they accept that fact, the better off they will be.”

In June, Malaysia Airlines CEO Ahmad Jauhari Yahya told shareholders that MH370’s disappearance “sadly now added an entirely unexpected dimension, damaging our brand and our business reputation, and accelerating the urgency for radical change.”

But Malaysia Airlines also has an image problem. During the early days of the still unresolved disappearance of flight MH370, relatives of the 239 souls on board complained about the treatment they were receiving at the hands of airline officials. Some were appalled that Malaysia Airlines communicated via text message the news that they believed all on board were killed.

News that similar feelings are being expressed by relatives of victims of passengers on board MH17 is not helping with the image Malaysia Airlines has in the eyes of the world. Jordan Withers, whose uncle Glenn Thomas perished when the flight was downed over Ukraine, said on Thursday:

“Malaysia Airlines have been terrible — absolutely terrible. I cannot stress enough how poor they have been. Even trying to find out whether Glenn was on the flight it was hours at home in Blackpool. I was trying to get through to Malaysia Airlines and I was given three different numbers. I was hysterical on the phone and just said, ‘I want one number.’”

Statements such as this one from distraught relatives don’t help with the image that Malaysia Airlines has in the eyes of the world. Whether or not the carrier ultimately survives two tragic aviation disasters remains to be seen.

[Image via AHMAD FAIZAL YAHYA / Shutterstock.com]