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Malaysia Airlines warns of further losses
Malaysia Airlines is warning of further losses in the second half of the year due to the double tragedies that hit the airline this year.
Reporting a net loss of 307m Malaysian ringgit (US$97.4m) for the three months to June, the airline confirmed today that it has seen a ‘sharp decline’ in bookings since the shooting-down of flight MH17 in the Ukraine and the disappearance of flight MH370.
Chief executive Ahmad Jauhari Yahya said: "We expected the impact of MH370 on the performance in quarter two. Given that, our team put in much hard work and effort to regain market confidence and rebuild sales.
"Tragically, just as we were beginning to see signs of recovery in all regions, we were dealt the blow of MH17."
Immediately after the MH17 incident, average weekly bookings declined 33% and numerous flights were cancelled.
But Yahya said the full financial impact is expected to hit in the second half of the year.
An announcement over the airline’s restructuring is expected before the end of the week. It is believed that the 19,500-strong workforce could be cut by as much as 25%.
Malaysia’s state investment firm Khazanah Nasional, which currently owns 69.4% of the airline, plans to buy out minority shareholders so it can start a restructuring plan.
Malaysia Airlines was in financial woe even before the two tragedies and has not made a profit since 2010.
Last month, Flight MH17 was shot down over Ukraine killing all 298 on board.
In March, Malaysia Airlines Flight MH370 disappeared with 239 people aboard en route from Kuala Lumpur to Beijing.
The search for the missing flight has been narrowed down following new analysis of data. See separate story today.
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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