HONG KONG – Hit by two astonishing tragedies in quick succession, the ***************** brand may become the ******* industry’s equivalent of asbestos or News of the *****: toxic to the public and, experts say, impossible to redeem.
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***************** ********* was downed over eastern ******* on Thursday with 298 people aboard by what American intelligence authorities believe was a surface-to-air *******. Just four months earlier, a ***************** jetliner carrying 239 people disappeared about an hour after taking off from Kuala Lumpur. The *** has still not been found, a source of profound unease for travellers and the aviation industry.
“I can’t comprehend of anything they can do to save themselves,” said Mohshin Aziz, an aviation analyst at Maybank in Kuala Lumpur, Malaysia.
“Perception-wise it really hits home,” Aziz said. “It’s very difficult to fight against negative perception.”
Even before the Flight 370 mystery, state-owned ***************** was in serious financial trouble. In an industry infamous for impoverishing shareholders and irking customers, ***************** had long stood out for its years of restructurings and ******.
The Flight 370 ******** along with the often erratic response of ***************** and the Malaysian government deeply scarred the carrier. Now, the once proud national ******* is facing the unthinkable again.
University student Dayne Rodgers, waiting for a flight to Brisbane, Australia at Incheon International Airport in South Korea, said even very cheap fares might not convince him to fly with *****************.
“I don’t know if my Mum would let me,” he said.
Already losing about $1.6 million a day, there will be “no miracles” for *****************, said Aziz, the Maybank analyst. Before the Ukrainian ********, his opinion was the ******* didn’t have the capacity to survive beyond a year.
The *******’s share price plummeted 11 per cent Friday. ******* has accused pro-Russian separatists of ******** down the plane flying from Amsterdam to Kuala Lumpur. The ****** denied it.
Unlike Flight 370, the responsibility for which is pinned with *****************, the second ******** appears largely beyond the *******’s control. It may, however, face questions about why it continued with flight paths over eastern *******, which is the heart of a violent rebellion against Kyiv, 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 ******* boom, the latest ******** will make the Malaysian carrier even less attractive. Its brand in the rest of the *****, where it became known largely because of the Flight 370 mystery, is now even more closely associated with the ***** fears of fliers.
Josh Gokul, a 25-year-old Australian student on a layover at Incheon, said he had flown with ****************** before and its service was “fantastic.”
But he is now “very hesistant” about using the *******. “Flying is scary enough.”
Within Malaysia, the shock is palpably raw.
“I was stunned,” said 48-year-old shopkeeper Reezal Mohamed. “It’s unbelievable.”
***************** has been in the red for the last three years. Last year, its ****** ballooned to 1.17 billion ringgit ($363 million), nearly three times larger than its 433 million ringgit loss in 2012.
As a state-owned flag carrier, it is required to fly unprofitable domestic routes, and its strong union has resisted operational changes. Nimbler discount rivals such as Air Asia have expanded rapidly, while ***************** has been like a supertanker, slow to change direction.
For some travellers, the *******’s poor financial health is more concerning for the future than the two disasters.
“Last time I saw them, the plane was almost empty and so I suspect, probably losing a lot of money,” said tourist Ricky Leong as he checked in for a ***************** flight from Hong Kong to Kuala Lumpur. “They’re not going to maintain their fleet and there’s going to be issues in the future.”
After the disappearance of Flight 370, the biggest backlash emanated from China because its nationals were the majority of passengers on the flight. Hopes for a recovery in that crucial market might now be set back.
Tongcheng Network Technology, which operates the Chinese ticket booking website ly.com, suspended all flight ticketing and hotel bookings involving ***************** after Flight 370 vanished.
“Now there’s this plane *****, we would be very unlikely to consider resuming it in the future,” said the manager of its public relations department, who only gave her surname, Zhang.
****** and risk management expert Kuniyoshi Shirai at A.C.E. Consulting in Tokyo said ***************** must take dramatic steps such as replacing top executives in response to the ********, which he blamed partly on the ******* for flying over ***-torn eastern *******.
“Otherwise, you cannot regain the trust of either consumers or investors,” he said.