Malaysia Airlines is in uncharted territory after the disappearance of Flight MH370 in March with 239 people aboard was followed this week by the downing of
another of its jets MH17, carrying 298 people, over Ukraine.
Before the disasters the carrier had among the worst financial performance of
any airline. An even bigger question mark now hangs over the future of Malaysia
Airlines, with its brand tied to two almost unfathomable tragedies.
Some analysts say the state-owned airline won't survive a year without a
substantial cash injection from the Malaysian Government.
A bailout would address the airline's immediate financial problems but
without far-reaching changes it could remain a burden on taxpayers and shrivel
into regional obscurity.
My views on the airline's crisis.
- How bad is the situation for Malaysian Airlines?
Other airlines have come back from disasters but none have experienced two
tragedies of such magnitude within the space of four months.
"There's no historical precedent, It's completely not their fault, but right now if you ask any
customers would they fly with Malaysia Airlines, they'd just have that negative
sentiment of I'd rather choose something else."
The airline was already losing about $1.6 million a day and has been in the
red for the past three years. The disappearance of Flight 370 with many Chinese
passengers on board also caused a backlash in the crucial China market. Experts
don't see any short cuts to recovery.
"It cannot be a quick fix, So the second question is do they
have the financial resources to survive a year, two years? And the answer is,
unfortunately, no."
- Is Malaysia Airlines to blame ?
The airline was blasted for its erratic response to the disappearance of
Flight 370 en route to Beijing from Kuala Lumpur. Because the whereabouts of the
plane was unknown, Malaysia Airlines had little meaningful information for the
families of passengers. Communication of what information it did have was often
mishandled, compounding the anguish of relatives.
The plane, believed to have crashed far off course in the southern reaches of
the Indian Ocean, still hasn't been found.
The fate this week of Flight MH17, heading to Kuala Lumpur from Amsterdam, is
far more clear-cut. It was shot out of the sky over an area of Ukraine
controlled by pro-Russian separatist rebels.
"They are a victim this time, so it is very different from a situation where
they have no answers. The
whole world is going to be sympathetic to them."
But another narrative questions why airlines continued to fly over the
conflict zone. Some airlines were avoiding it, which involves taking a longer
fuel guzzling route, but most were not. Malaysia Airlines may face more scrutiny
about its risk management decisions once the initial shock of the tragedy
dissipates.
"It is unthinkable from a risk management point of view that the plane was
flying where it was,
Their brand is going to suffer serious damage, There is even a
possibility the airline will go out of business."
- How should Malaysia Airlines handle the latest tragedy?
Clear, consistent and compassionate communications are essential.
"I think their immediate response has been consistent and caring. They are
communicating on Twitter and Facebook, they are definitely going out on the
commercial media. If they weren't getting the immediate response right, then it just would be the
nail in the coffin for them.
Being open and transparent, continuing to assist the families
of passengers and crew members while also running a punctual and reliable
business will help the airline build on the sympathy about its plight.
Malaysia Airlines appears to have learned lessons from its halting slowness
to react to the MH370 tragedy and is already applying those lessons.
- What can the airline do to rebuild it's brand?
The airline needs far reaching changes.
Because of its financial struggles, some analysts had advocated the sale of
the state-owned airline to bring in fresh capital, ideas and expertise. Like all
international airlines, Malaysia Airlines needs to renew its fleet with modern
jets to be competitive, which requires substantial investment. Its capacity to
make those investments is further compromised if travelers avoid the airline
because of the disasters.
But the fact remains Malaysians are being tested in a great way. Special prayers, deepest condolences and sympathies to the "Nation of Love".
