Kuala Lumpur, Nov 28: Crisis-stricken Malaysia Airlines said today that its third-quarter loss widened 54 per cent in the wake of two devastating air disasters that have sent its business into a tailspin and prompted a government rescue.
The company's net loss for the three months ending September 30 reached USD 170 million, expanding from a 373.2 million ringgit deficit in the same period last year. The result marks the seventh straight quarterly loss for Malaysia Airlines, which already had struggled to stay competitive even before the mysterious loss of flight MH370 and the July 18 shooting down over Ukraine of flight MH17.
MH370 disappeared with 239 people aboard, while all 298 passengers aboard MH17 were killed. In a filing to Malaysia's stock exchange, the airline blamed "the double impact of the MH370 and MH17 incidents and the continued intensified (industry) competition" for a worsening performance that also saw operating revenue fall 12 per cent to 3.3 billion ringgit.
"Malaysia Airlines continues to struggle despite efforts to reduce the financial bleeding," it said. The company's crisis has prompted a Malaysian government bailout. State investment fund Khazanah Nasional, which owns around 70 percent of the carrier, in August announced plans to acquire the remaining shares, de-list the airline, and try to resuscitate it.
The company would slash 6,000 jobs, 30 per cent of it's workforce trim its route network, and replace its CEO, Khazanah said, and it will pump 6 billion ringgit into the carrier, hoping to bring it back to profitability. The carrier has controversially been kept aloft for years by transfusions of public money while posting huge losses, with analysts blaming poor management, unwise business decisions, and government meddling.
MH370 inexplicably diverted from its Kuala Lumpur-Beijing course in March. Malaysia's government believes it went down in the Indian Ocean, but no trace has been found. The government and airline came under fierce global criticism over their failure to account for the jumbo jet, a slow-footed response and accusations of secrecy. Western leaders say MH17 was shot down by pro-Russia rebels in Ukraine. An investigation is ongoing. Malaysia Airlines previously had a solid safety record.