An unprecedented challenge

And with losses now at a reported $2 million a day it comes as no surprise that the Malaysian government has been forced to privatise its national airline after the twin disasters.

Malaysia Airlines shares were delisted in August, with majority owner state-run Khazanah Nasional spending $500 million to buy the 30 per cent of shares it does not own.

The airline will be restructured, with significant staff losses, and recapitalised to sustain operations amid a high level of debt and continuing losses because of a travel downturn after the disasters.

Khazanah said all stakeholders would need to work together to save the company via a “complete overhaul of the national carrier on all relevant aspects (including) the airline’s operations, business model, finances, human capital and regulatory environment”. “Nothing less will be required in order to revive our national airline to be profitable as a commercial entity and to serve its function as a critical national development entity,” it said.

Analysts say that taking the airline private will allow the government to make the radical changes necessary and sustain operations amid a high level of debt.

Even before the disappearance of MH370 on March 8, Malaysia Airlines was in the red, with losses of $1. 4 billion over the past three years.

Its shares have plummeted 23 per cent this year.

Earlier, Khazanah said Malaysia Airlines had funds to last about a year.

Although it formerly had a solid safety and product reputation, the two crashes have devastated bookings.

Air travel today on major routes is incredibly safe with 100,000 flights a day carrying 8. 3 million passengers. You have more chance of being struck by lightning than being killed in an air crash. But those reassuring numbers are meaningless for travellers contemplating a trip.

Malaysia Airlines has been in the news every day since MH370 disappeared on March 8 in the most bizarre mystery of modern times.

Sickeningly, only the loss of MH17 to an apparent surface-to-air missile has pushed the earlier disappearance into the background.

Clearly the two are unrelated but that will make little difference to intending passengers.

Incredibly, 70 per cent of passengers have some level of fear of flying so two air crashes in five months is too much for most to overlook no matter what the airfare. Clearly the two are unrelated but that will make little difference to intending passengers. Passengers will understandably ask, “what can possibly go wrong next?” Compounding that feeling has been the handling of MH370 with Malaysian government authorities making conflicting and contradictory statements that have sent all the wrong messages about the airline and Malaysia itself.

China has been a strident critic of the dissemination of information about MH370 by the Malaysian government.

In fact only pressure from the media forced the government to make public the interim report on MH370. Even then it was found wanting.

It has been left to the Australian Transport Safety Bureau, appointed by the Malaysians to lead the investigation, to fill in the gaps.

Numerous media reports relating to MH370 have been at first denied then later confirmed as fact, leading to a feeling of confusion, which has reflected badly on the airline and the country.

However, the loss of MH370 would challenge most nations and not since 1972, when a flight was lost in the South American Andes for 72 days, has a commercial passenger aircraft disappeared.

In today’s instant communication era with Google Earth and find my phone apps most find it incomprehensible that an aircraft could be lost for over five months.

MH17 and particularly MH370 will remain in the news for months and possibly years.

When the search resumes for MH370 this month attention will again focus off Perth and once the aircraft is found there will be a massive influx of international media.

One producer from CNN told Contrails that when the first images emerge of MH370, the media interest will be as great as the Olympics.

For Malaysia Airlines there is going to be no respite from the bad publicity and thus passenger numbers will plummet further.

Put simply – if it wasn’t a government-owned airline it would collapse.