Jessie KohThe disappearance of flight MH370 has dealt a great blow to Malaysia Airlines’ reputation and sales, with their net loss doubling to USD 137.9 million in the first quarter of 2014. At their annual company meeting on Wednesday, the airline announced that they will be overhauling their business strategy as part of their recovery plan.
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Chief Executive Ahmad Jauhari Yahya declined to give details on this overhaul, only saying that big changes will be on the way for the airline, and that their “only option at this point of [their] business evolution is sweeping change”.
In recent years, Malaysia Airlines has carried out a strategy of aggressively discounting in order to compete with their low-cost rivals such as AirAsia. While this has increased their load factor (number of seats filled), the airline has still not reached profitability.
Malaysia Airlines will be facing a host of obstacles in their road to recovery from the MH370 flight disappearance, with analyst Brendan Sobie from aviation consulting firm Centre for Aviation (CAPA) saying that they are “in a difficult position with no easy solutions, at least for the short term, until they and the government decide on the long-term strategy.”
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