Malaysia Airlines announced on early Monday, December 8 its intent to suspend its shares on the Kuala Lumpur stock exchange on December 15, as part of a government plan to rescue the national flag carrier in the wake of flight MH370’s aviation tragedy on March 8, and flight MH17’s aviation disaster on July 17, according to Agence France-Presse aviation news reports.
The national flag carrier has been operating deeply in the red for well over five years. At its peak, the carrier has been cash burning about US$2.16 million a day and bleeding about US$1.6 million a day in losses. As a result, Malaysia Airlines has been in intensive-care through transfusions of public money, leading to continued operating shortfalls and substantially below market average metrics of passenger loads.
Market analysts conclude the air carrier’s lack of competitiveness in the lucrative Southeast Asia market resulted from drifting management, clouded strategic business decisions, bloated labor costs, draining working capital, devastating government crisis mismanagement and dubious procurement controls.
Agence France-Presse adds: The final day of trading of Malaysia Airlines’ stock will be on December 12. This will be followed three days later by a complete suspension of the air carrier’s stock on the Malaysian stock market, according to the government firm’s filing with Kuala Lumpur’s stock exchange late on Thursday, December 4.
Minority shareholders of Malaysia Airlines on Thursday, November 7, 2014 approved a US$420 million bid by its majority owner, state fund Khazanah Nasional Berhad, to privatize the embattled carrier which suffered two air tragedies this year, reported Agence France-Presse.
“Our shareholders’ approval represents a first, but major hurdle crossed, and there is much more to be done,” group CEO Ahmad Jauhari Yahya said.
Khazanah Nasional Berhad, the state-owned investment fund that owns nearly 70% of the air carrier, plans to acquire all remaining shares to place the embattled airlines completely in private ownership in its quest to rescue the flag carrier’s brand.
The Malaysian investment fund has already embarked upon its strategic intent of 6,000 staff cuts at the airline — about a third of its original 20,000 labor pool — as part of a radical restructuring to lower the air carrier’s labor cost more aligned with its chief rival and market leader, Singapore Airlines, currently dominating the Southeast Asia commercial passenger air carrier market, where the world’s highest future growth in international aviation is anticipated in the next 5-10 years by Boeing and Airbus industry projections.
Moreover, Khazanah is pumping about US$1.73 billion (MYR6 billion ringgit) into the financially-strapped Malaysian air carrier, Agence France-Presse reports. Additional plans call for slashing the flag carrier’s routes and replacing its chief executive.
Malaysia Airlines flight MH370 was previously speculated to be declared lost on the southern Indian Ocean floor, sometime this month officials speculated, after history’s largest and costliest oceanic airliner search now for nine months today, December 8, 2014.
Halting weather, including stormy oceanic winds up to 90 kilometers per hour in parts of the priority search area, are likely to affect operations in the coming weeks, but conditions are expected to improve, as the summer season emerges off the western coast of Australia, the Joint Agency Coordination Center (JACC) said last month on Monday, November 3.
I speculated on October 5 inside my LinkedIn Pulse article, “MH370 Found This Week: Officials Say “Not Where, But When”,” the following opening excerpt:
“Beginning today, the next 12 days of continuous deep sea scouring, unabated by harsh hurricane-like underwater oceanic weather conditions, is critical to uncovering the whereabouts of the massive Boeing 777-200ER airliner.”
“Wreckage or debris must be found during these critical 12 days before the underwater sea vessel equipment employed in this next search phase has to return back to shore for refueling and restocking. During this time as the deep sea vessel equipment is away, the conditions of the “priority search area” could change drastically. This could severely hamper and impede the ongoing MH370 search that could delay recovery of the missing Boeing 777-200ER for years.”
“We don’t have a final date, but once we have an official loss recorded we can work with the next-of-kin on the full compensation payments for those families,” Malaysia Airlines commercial director Hugh Dunleavy was quoted as saying in the New Zealand Herald on Tuesday November 4.
Malaysia Airlines immediately retorted back in a public statement on November 10 to this speculation on an official declaration of loss of flight MH370.
“Addressing the speculation to family members via letters, the airline highlighted that any course of action is always guided by the advice of the technical team in charge of the search operations,” according to the flag carrier’s statement.
“The assurances given to us are that the ongoing search and recovery operations will remain and will not be discontinued.”
The Australian and Malaysian governments are working together to date on officially continuing the search of the lost Boeing 777-200ER airliner scouring thousands of square kilometers of deep southern Indian Ocean floor, as tight budgets begin to impede the search for the missing airliner.
The flag carrier further added: “Recent speculation in the press regarding a declaration of loss followed the expression of a personal opinion only. Any information regarding MH370, the search and recovery operations and any matters related to the missing aircraft will only be communicated by the Joint Agency Coordination Centre (JACC).”
The Malaysian flag carrier’s Boeing 777-200ER, Registration Number 9M-MRO, performing as Malaysia Airlines flight MH370, disappeared early morning March 8 with 227 passengers and 12 Malaysia Airlines crew members on board en route from Kuala Lumpur International Airport to Beijing International Airport.
It is generally alleged the massive airliner was in its remaining catastrophic moments (including recent speculations of either a hijacking or a massive on-board fire, originating from a 440 pound large supply of highly flammable lithium-ion batteries inside the cargo hold), when the airliner was radar tracked, as it flew far off-course from its intended flight path. Then, turning suddenly back towards the Straits of Malacca, after which the massive Boeing 777-200 airliner is alleged to have mysteriously last flown into the southern Indian Ocean off the coast of Western Australia, experts and search investigators generally believe at this point.
On December 3, Australian Transport Safety Bureau issued an update on the search, saying that “more than 185,000 square kilometers have been surveyed. More than 8,000 square kilometers of the seafloor have been searched so far, reports the Epoch Times.
Despite deep oceanic underwater searches scouring over 8000 square kilometers of Indian Ocean floor, focused on the priority search area off the coast of western Australia, no trace of the airliner has been found.
Epoch Times added: “Australia is also working on new drift modeling to determine if and when wreckage from the missing plane will come on shore. Initial analysis found that the first Flight 370 debris would appear on Indonesian shores after about 123 days.”
“We are currently working … to see if we can get an updated drift model for a much wider area where there might be possibilities of debris washing ashore,” MH370 search coordinator Peter Foley recently stated to Reuters more than a week ago.
A second Malaysian flag carrier’s Boeing 777-200, Registration Number 9M-MRD, operating as Malaysia Airlines flight MH17, with 283 passengers and 15 Malaysia Airlines crew on board went down on the morning of July 17 in war-torn eastern Ukraine — believed hit by a surface-to-air missile or a military jet fighter — killing all 298 souls on board.
Speculation swirls as experts of the European air traffic control regulator, Eurocontrol, speaking unofficially “urged Kiev to close the southeast of Ukraine for civilian aircraft days before the MH17 flight was downed near Donetsk, but the plea was ignored by local authorities,” unnamed sources in the organization told the Sunday Times newspaper.
Meanwhile, impatient families of Malaysia Airlines MH17 crash victims are publicly urging the United Nations to perform its own independent investigation of the downing of the Boeing 777-200 airliner. MH17 families are uneasy with what they say is the failure of Dutch authorities to build a proper case, reports Reuters and International Business Times.
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