- POSTED: 15 May 2014 19:23
Malaysia Airlines announced Thursday that its net loss widened in the first quarter as the impact of flight MH370's disappearance added to the struggling carrier's woes.
KUALA LUMPUR: Malaysia Airlines announced Thursday that its net loss widened in the first quarter as the impact of flight MH370's disappearance added to the struggling carrier's woes.
The state-controlled airline said it posted a net loss of 443 million ringgit ($137 million) for the three months ending March 31, compared to a 279 million ringgit loss in the same quarter in 2013.
The result was the airline's fifth straight quarterly loss and also the worst since the fourth quarter of 2011, when it recorded a net loss of 1.28 billion ringgit.
"The results were made worse with the impact on air travel in general following the disappearance of MH370," said Ahmad Jauhari Yahya, the airline's group chief executive.
"Operations were slowed for several weeks since early March when MH370 disappeared. Marketing activities were halted out of respect for the families of those on board the Beijing-bound Boeing 777 aircraft."
The debacle over the missing plane has compounded the problems faced by Malaysia Airlines, which had already lost a combined $1.3 billion over the past three calendar years as it founders in the face of intense industry competition.
Analysts say it faces a continued grim outlook in coming years unless it is forced to undergo aggressive reform, which has been resisted by powerful employee unions and other vested interests.
In a statement on Wednesday, the airline said "a thorough review of the business plan is being undertaken and all avenues are being explored to ensure the long-term sustainability of the company."
The carrier has undertaken a series of "turnaround" plans over the years, but each has failed to stem the tide of red ink blamed by analysts on poor management, a bloated work force, powerful unions, and industry competition.
MH370 disappeared on March 8 en route from Kuala Lumpur to Beijing with 239 people aboard. An extensive search in the Indian Ocean has found no trace of the plane.
The incident has ravaged the carrier's worldwide image and especially hurt bookings in the lucrative and previously growing China market.
Two-thirds of those on board MH370 were Chinese and the crisis has triggered fierce criticism in China of the airline and Malaysia's government.
The airline, which is 69 per cent owned by government investment company Khazanah Nasional, said the first quarter loss was due in part to rising fuel costs.
Ahmad Jauhari said the airline must find ways to boost revenue to ensure its "future survival and sustainability in a market that is not showing any signs of letting up on competition", but he offered no specifics.