Q. I have a flight booked with Malaysia Airlines from Heathrow to Melbourne for Christmas. Is it true that it is going bankrupt? Karen Proudfoot, Essex
A. First, top marks for booking a flight with this excellent airline so well in advance. Prices for Christmas to Australia only ever go up, so it was a good call to buy early. Furthermore, fares on Malaysia Airlines are lower than they should be. The cause is weaker demand than you would expect for a carrier of such quality. The reason is that, apparently, some people are unwilling to fly with the airline after the tragic, unrelated losses of MH370 and MH17 last year.
The former disappeared on 8 March when flying from Kuala Lumpur to Beijing with 239 passengers and crew. The second was shot down over eastern Ukraine on 17 July en route from Amsterdam to Kuala Lumpur, killing all 298 on board.
Christoph Mueller, the new boss, took over last month, and has said that the airline is "technically bankrupt". This is not a surprise to anyone in the industry. Even before the unexplained disappearance of the Kuala Lumpur-Beijing flight and the shooting down of the plane from Amsterdam, the airline faced severe problems. It was up against intense low-cost competition on its regional network, and the loss of business in the face of the fast and hungry expansion by the Gulf-based airlines Emirates, Etihad and Qatar Airways.
The plan is to shrink the workforce from 20,000 to 14,000, and to run the airline as a "start-up", unencumbered with old pay and working relations.
There is no expectation that the airline will close down, and Mr Mueller has said that anyone buying a Malaysia Airlines ticket can do so confident in the knowledge that it will operate normally and safely. He is highly regarded in the industry, having turned Aer Lingus from an also-ran to a business that is now valued at more than £1bn.
Expect an announcement on the airline's future early in September, but the changes are likely to take effect only from the autumn of 2016.Reuse content