Wednesday, July 23, 2014

Could Malaysia Airlines Go Bankrupt?

With two very high profile tragic accidents in less than six months, could Malaysia Airlines go bankrupt within 3 years?

By: Ringo Bones 

With passenger compensation that could probably total in the hundreds of millions of dollars due to two very high profile tragic accidents less than six months apart, the long-term economic viability of Malaysian Airlines seems now in doubt. With the still unexplained disappearance of Malaysia Airlines Flight MH370 Boeing 777 that vanished over the southern Indian Ocean last March 8, 2014 and the recent Malaysia Airlines Flight MH17 Boeing 777 shootdown over the pro-Russia separatist controlled part of Ukraine back in July 18, 2014 many in the airline business wonder if Malaysia Airlines would sill be around in the next 5 years. After all, Pan Am went bankrupt and closed its doors back in 1991, three years after the downing of Pan Am Flight 103 over Lockerbie, Scotland. 

According to IATA, Malaysia Airlines only has 15 Boeing 777 that it has recently acquired to its fleet of planes. And in less than 6 months two of them had been involved in very high profile tragic accidents involving the death of all hands on board and the expected compensation payouts that could reach in the hundreds of millions of US dollars. It is safe to say that the future economic viability of Malaysia Airlines is now in doubt. And the airline company’s latest tragic incident had inadvertently diverted press coverage of the 2014 Farnborough International Air Show in southern England where there are new planes on offer that promise lower fuel consumption, lower operating cost – as in more profits for airline companies. It would probably take an extraordinary revamp on how Malaysia Airlines is run could save it from permanently closing its doors in a few years time.  


VaneSSa said...

It was sad for Pan Am to go bankrupt even though the iconic airline was featured in Arthur C. Clarke's 2001 A Space Odyssey - in the book and the Stanley Kubrick directed movie - as it ferries regular civilian passengers to the Moon and back. The "bankruptcy resistance" of Malaysian Airlines would probably solely depend on the company's financial management personnel.

April Rain said...

There's this talk of AirAsia's Tony Fernandes taking in Malaysia Air Lines' staff - but is it better for the billionaire CEO of AirAsia to just buy Malaysia Air Lines / MAS to save it from bankruptcy?

Elisabeth said...

Believe it or not - Malaysia Air Lines had not made any profit during the last three years.