Malaysia Airlines Under Complete Government Ownership

Unable to cope up with the two tragic incidents and the loss of several lives Malaysia Airlines has exchanged hands and has gone back to public ownership.

The disappearance of the MH370, the flight that departed from Kuala Lampur and did not arrive at Beijing but was lost and no trace of the plane has been found till this date. It is being assumed now that the 227 passengers and the 12 crew members are perhaps lying somewhere deep in the Indian Ocean bed. The Boeinf777 met with an inexplicable fate, unknown and undiscovered. The mishap shook airline’s reputation.

Even more tragic, the incident of the MH17, which fell down from a height of 33,000 feet with 283 passengers and 15 crew members after being shot down in eastern Ukraine.

It was indeed challenging for the airline to continue after two great tragedies. People have lost faith as immediately after the second tragedy occurred passengers cancelled bookings and booked flight with other airlines. The airline had to make an unprecedented offer to fully refund those passengers who made their bookings in 2014.

Malaysia airline was facing competitive pressure from Singapore Airlines, Cathay Pacific and the Gulf-based carriers even before the tragedies occurred. The airline was not being able run the expenses on its own. The government’s sovereign wealth fund Khazana which already owns 70 percent of the shares of the airline has decided to step in and buy out private share holders for 12.5 percent more, than the closing share price on Thursday, 06.08.14. The stocks had fallen drastically after the second tragedy and shares had to be brought at 42 percent higher price with cost coming up to something like £250m.

The airline has fallen prey to vicious rumors as some describe the fate of the airline as“haemorrhaging cash”. But experts feel that the crashes will in some way help the airline to rebuild its standards and make it fit for flying as a top quality carrier.

The airline in the past years had been unable to make a marketing push. The carrier was running at a loss by lowering price to suite affordability. Compared to other airlines like Emirates and other high flyers the airline’s charges were considerably less to keep going in the competitive market.

With the present conditions it can be expected that Malaysia airlines will cut route networks and staff numbers and there are talks that the aircraft will change names to Air Malaysia. However with the stigma attached to the airline, it will indeed be a formidable task to relive the success of the airline in international skies.