Malaysia Airlines planes are parked at Kuala Lumpur International Airport in Sepang, Malaysia, Thursday, July 18, 2013.
The second tragedy to strike Malaysia Airlines in less than 6 months could mean deeper losses for the carrier known around the world for missing flight MH370.
On Thursday, Malaysia Airlines flight 17 from Amsterdam to Kuala Lumpur lost contact with air traffic control while in Ukrainian airspace. All 295 people on board were killed in what is being called an "act of terror."
This is happening as the airline is still addressing the aftermath of MH370, which disappeared on March 8, the cause of which is still under investigation. As the airline tries to find answers to bring solace to friends and family of those lost on 370, it has a new crisis to deal with.
The daughter of one of the crew members on MH370 tweeted her condolences to those affected by Thursday's tragedy.nam-
The two tragedies are linked by an airline carrier that has struggled with profitability since 2005. Despite financial woes, Malaysia Airlines has won more than 100 local and international awards in the past decade for service, including an award for best airline in Asia in 2013 by the World Travel Awards, and has five stars on the ranking website Skytrax. But accolades have done little to help an airline that has amassed more than $1.3 billion in debt in the past three years.
Losses have stemmed from high fuel costs, airport fees, low-cost carrier competition and the weakening of Malaysia's currency against the U.S. dollar.nam-
The airline has been buoyed by state ownership, which has so far allowed it to weather losses better than privately owned carriers.
"It is believed that the airspace that the aircraft was traversing was not subject to restrictions," flight tracking service Flightradar24 and the International Air Transport Association said in a statement. The lack of technical fault by the airline may not hold up to public opinion. After MH370, whose passengers included many Chinese, boycotts of the airline were called.nam-
Malaysia Airlines reported a net loss of 443 million ringgit ($138 million) for the first quarter of 2014, a 59% increase compared to a year before. The company has lost more than 40% of its market value this year.
The airline attributed the loss to a "tough business environment,"The airline attributed the loss to a "tough business environment," and identified the first quarter as a traditionally weak travel period.
“Traditionally, the first half is always weaker compared to the second half following the heavy travel period of the previous year-end holidays," said Ahmad Jauhari Yahya, the Malaysia Airlines Group CEO. "The net loss this first quarter is not unexpected. However, the results were made worse with the impact on air travel in general following the disappearance of MH370. The whole market has reacted by slowing down demand."
According to monthly reports from Malaysia Airlines, passengers increased year over year in April by 9.4%, but decreased by 4% in May, compared to the same month a year earlier.
The precise circumstances of the crash on Thursday will determine whether Malaysia Airlines receives compensation from its insurance carriers for the loss of the $500-million Boeing 777 and liability for the passengers.
Depending on the exact wording of the airline's insurance policies, and the reasons reasons for the crash, Malaysia Airlines could be responsible for the entire bill, which could run into the billions of dollars, aviation risk experts told Mash.
Analysts had speculated that the airline could be forced to file for bankruptcy because of mounting pressure following MH370. Now the focus of two international aviation disasters, the airline's tough situation just became tougher.
Tags: MALAYSIA AIRLINES, MH17, MH370, TRAVEL & LEISURE, US & World, WORLD