In the aftermath of two air disasters in less than six months, Malaysia Airlines is in serious financial trouble and the end may be nigh.
Maxim Zmeyev / Reuters
The crash of Flight MH17 comes at an extremely difficult time for Malaysia Airlines. Just four months ago, the company lost Flight MH370. That flight is still missing, and having two high-profile disasters back to back won't bolster the company's image, analyst Robert Mann, of R.W. Mann & Co., told BuzzFeed Thursday. "Unfortunately, this is not going to help that situation," he said.
Mary Schiavo agreed. Schiavo — a former inspector general of the U.S. Department of Transportation who now works as an attorney specializing in plane crashes — spoke with BuzzFeed Thursday and envisioned an airline that will be further wounded by tragedy.
Schiavo called Malaysia Airlines a "fading" company that was already destined for the history books even before recent disasters, and financial analysis bears out that conclusion. The airline has been losing money for years, with those losses continuing in 2013 "due to intense competition and its high cost structure." The airline has been unable to turn things around this year, and is still losing money even as it cuts ticket prices in an effort to fill its many empty seats.
In the aftermath of MH370's disappearance, things only got worse, with analysts arguing the incident had damaged the brand's reputation. And as of last month, analysts expected the company's second quarter earnings to be "the weakest ever." The full impact of losing Flight MH17 is yet to be seen, but if more customers avoid the airline — as Schiavo speculated could happen — its financial troubles will only deepen.
Still, the end may have been nigh for the company anyway. Schiavo compared MH17 to Pan Am Flight 103, which terrorists destroyed with a bomb in 1988. When Pan Am collapsed several years later, some pointed to the bombing as a contributing factor, Schiavo said, even though the airline was already struggling. Something similar happened with TWA Flight 800, which crashed in 1996 due to a short circuit. Schiavo said Malaysia Airlines may be destined for a similar fate. "I think the end of Malaysia Airlines was already in the offing," she added.
Henry Harteveldt, an analyst at Atmosphere Research Group, also told USA Today that Malaysia Airlines needs new leadership if wants to move forward.
Debris at the MH17 crash site near the village of Grabovo, Ukraine.
Dmitry Lovetsky/ Associated Press
from BuzzFeed - Breaking http://ift.tt/1mUdnyt
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