Future of Malaysian Airlines is ‘dire’ after second plane disaster

  • @ArmitageJim

Investors feared for the future of Malaysia Airlines as its shares tumbled 11 per cent in the wake of its second plane disaster in little more than four months.

The company, already facing collapse or a possible state rescue after the disappearance of flight MH370 in March, has now seen its shares fall more than 35 per cent this year.

Its future is “even more dire now”, said Mohshin Aziz, a research analyst at Maybank. Never before has one flag carrying airline lost two wide-bodied passenger planes in a period of months.

Even before this week’s crash, reports had suggested state-owned investor Khazanah Nasional would buy the company outright. It is already the major shareholder. The investment company has pumped more than $1bn into the airline in recent years.

Maybank said the airline would not survive more than a year without massive new funding, while other analysts predicted the brand would be changed to avoid putting off future passengers.

Malaysian Airlines has been struggling against competition from rival low-cost airlines in its home markets and is seen in desperate need of restructuring. However, analysts say tough unions will resist attempts to carry out heavy redundancies.