Jim Armitage: Malaysia Airlines handled the Flight 370 tragedy dismally. Now it lacks the will to rescue the company's finances

Global Outlook Conspiracy theorists have 1,001 fantastical tales about what really happened to Malaysia Airlines flight MH370. I heard one last night claiming it was "undeniable" the Americans shot it down, suspecting it was planning to crash land on the jet-fuel tanks at their military base on Diego Garcia. That's why there's been an Obama-ordered media blackout on the whole episode, apparently. Perhaps. Or maybe it's on the moon with Adolf Hitler and a journalist from the Sunday Sport.

What's sure is that the episode, apart from being a human tragedy, has been disastrous for the state-owned airline.

Figures out this week showed losses of 443m ringgit (£80m) in the three months to 31 March as passengers – understandably –opted to fly with rival airlines. Sales to the Chinese, whose nationals made up two-thirds of the doomed flight's passengers, fell 60 per cent in the aftermath.

You'd expect the financial numbers to be bad after such an event, of course. But look closer at the dates. MH370 disappeared on 8 March – less than three weeks before the end of the airline's quarterly trading period. Cancellations only generally start to really hit the tills a few days after a plane goes down, making it more like just a fortnight that MH370 was having an impact on the company's finances.

In other words, this was an airline heading for heavy losses long before Captain Zaharie Ahmad Shah sat down at the controls on that doomed flight.

Indeed, the financial fate of Malaysia Airlines has been a matter of serious concern in its home country for years. Although the losses in the first quarter of this year were particularly bad, the same period in 2013 saw it plunge 279m ringgit into the red too. Over the past three years, it has lost $1.3bn (£770m).

The company is essentially in the same jam that most European airlines – British Airways, as much as any – were in a decade or more ago. That is, being shredded by low-cost rivals like AirAsia, and with high fixed labour costs protected by powerful unions.

Unlike BA at the time, Malaysia Airlines has been able to lean on the government for bailouts. But the state is starting to talk tough, and this week the transport minister Hishammuddin Hussein said no more aid would be forthcoming.

The question now is, does the Prime Minister, Najib Razak, really have the stomach to stand by that? Does he really want to line up for a fight with some of the toughest union bosses and other vested interests in his country?

Aviation analysts fear not. They feel neither management nor government has the drive to push through such a task, even though the crisis triggered by MH370 could give them the political cover to act – not to mention taking the chance to make up for the shamefully ham-fisted and insensitive way in which the incident was handled in the first place.

In the meantime, watch the share price. Research from analysts at the Maybank group in Malaysia has shown shares in Asiana, Air France and Singapore Airlines fell by between 7 and 20 per cent after air crashes of their own. Air France and Asiana's stock had pretty much recovered six months later, although Singapore's had not. Malaysia Airlines is down 14 per cent since the tragedy, but given the dramatic increase in expected passenger traffic in the region (Citigroup reckons Malaysia will attract 26 million visitors this year, compared with Singapore's 17 million), some analysts are tipping it to make a similar recovery to Air France and Asiana.

If MH370's black box is ever recovered and the pilot or crew are found responsible, recent history tells us that a second round of cancellations is unlikely. The Air France Rio-Paris flight 447, which went down with the loss of 228 lives in 2009, was this week deemed by investigators to be due to an "inappropriate response" by the crew. This followed a similar finding a year ago. No resulting fall in bookings with the French carrier occurred then, and neither has it this week.

With the indomitable faith in human engineering that we all exhibit when we climb up those steps from the tarmac, Air France customers put such thoughts to the back of their minds and keep on flying.

Travel
travel
News
Tim Vine has won the funniest joke award at the Edinburgh Festival 2014
peopleTim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
News
Jamie and Emily Pharro discovering their friend's prank
video
Arts and Entertainment
Taylor Swift crawls through the legs of twerking dancers in her 'Shake It Off' music video
musicEarl Sweatshirt thinks so
PROMOTED VIDEO
News
Our resilience to stress is to a large extent determined by our genes
science
Travel
travel
Arts and Entertainment
tv
Sport
sportBesiktas 0 Arsenal 0: Champions League qualifying first-leg match ends in stalemate in Istanbul
News
Pornography is more accessible - and harder to avoid - than ever
news... but they still admit watching it
Arts and Entertainment
The eyes have it: Kate Bush
musicKate Bush asks fans not to take photos at London gigs
News
i100
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Sport
Manchester United are believed to have made a £15m bid for Marcos Rojo
sportWinger Nani returns to Lisbon for a season-long loan as part of deal
News
news
News
i100
Arts and Entertainment
O'Toole as Cornelius Gallus in ‘Katherine of Alexandria’
filmSadly though, the Lawrence of Arabia star is not around to lend his own critique
Life and Style
fashion
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Java/Calypso Developer

£600 - £800 per day: Harrington Starr: Java/Calypso Developer Java, Calypso, ...

Quantitative Developer

£700 per day: Harrington Starr: Quantitative Developer C++, Python, STL, R, PD...

Web developer (C#, MVC4, HTML5, CSS3, Javascript, Jquery)

£30000 - £44000 per annum + Bonus+Benefits+Package: Harrington Starr: Web deve...

Senior Automation QA Engineer (Java, Selenium WebDriver, Agile)

£40000 - £65000 per annum + benefits+bonus+package: Harrington Starr: Senior A...

Day In a Page

Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home
Lauded therapist Harley Mille still in limbo as battle to stay in Britain drags on

Lauded therapist still in limbo as battle to stay in Britain drags on

Australian Harley Miller is as frustrated by court delays as she is with the idiosyncrasies of immigration law
Lewis Fry Richardson's weather forecasts changed the world. But could his predictions of war do the same?

Lewis Fry Richardson's weather forecasts changed the world...

But could his predictions of war do the same?
Kate Bush asks fans not to take photos at her London gigs: 'I want to have contact with the audience, not iPhones'

'I want to have contact with the audience, not iPhones'

Kate Bush asks fans not to take photos at her London gigs
Under-35s have rated gardening in their top five favourite leisure activities, but why?

Young at hort

Under-35s have rated gardening in their top five favourite leisure activities. But why are so many people are swapping sweaty clubs for leafy shrubs?
Tim Vine, winner of the Funniest Joke of the Fringe award: 'making a quip as funny as possible is an art'

Beyond a joke

Tim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

Sadly though, the Lawrence of Arabia star is not around to lend his own critique
Wicken Fen in Cambridgeshire: The joy of camping in a wetland nature reserve and sleeping under the stars

A wild night out

Wicken Fen in Cambridgeshire offers a rare chance to camp in a wetland nature reserve
Comic Sans for Cancer exhibition: It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans

Comic Sans for Cancer exhibition

It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans
Besiktas vs Arsenal: Five things we learnt from the Champions League first-leg tie

Besiktas vs Arsenal

Five things we learnt from the Champions League first-leg tie
Rory McIlroy a smash hit on the US talk show circuit

Rory McIlroy a smash hit on the US talk show circuit

As the Northern Irishman prepares for the Barclays, he finds time to appear on TV in the States, where he’s now such a global superstar that he needs no introduction
Boy racer Max Verstappen stays relaxed over step up to Formula One

Boy racer Max Verstappen stays relaxed over step up to F1

The 16-year-old will become the sport’s youngest-ever driver when he makes his debut for Toro Rosso next season
Fear brings the enemies of Isis together at last

Fear brings the enemies of Isis together at last

But belated attempts to unite will be to no avail if the Sunni caliphate remains strong in Syria, says Patrick Cockburn
Charlie Gilmour: 'I wondered if I would end up killing myself in jail'

Charlie Gilmour: 'I wondered if I'd end up killing myself in jail'

Following last week's report on prison suicides, the former inmate asks how much progress we have made in the 50 years since the abolition of capital punishment