Malaysia Airlines reported its worst quarterly loss in more than two years, saying the still-unsolved disappearance of Flight 370 has dramatically hurt business.
The company reported a net loss of $137.8 million (443.4 million ringgit) for the January-through-March quarter. That was up 59% from the carrier's 443 million ringgit loss during the same quarter in 2013.
The quarterly loss was the fifth in the row for the 76-year-old airline, with The Associated Press writing the Flight 370 incident in March has "stressed a company that was already struggling with high fuel prices and operational cost."
Malaysia Air says it has been hit particularly hard in Chinese market, where demand has plummeted following Flight 370. The flight had been bound for Beijing, and Malaysia Air has been roundly criticized in China for its handling of the Flight 370 investigation.
Air Transport World provides additional background, noting "the majority of the 229 people on board were Chinese and it has been reported that the airline has seen a 60% drop in sales from China. Some Chinese travel agents are boycotting the airline."
Malaysia Air acknowledged "tough operating conditions" and "negative sentiment" in announcing its quarterly loss, according to the BBC.
"The net loss this first quarter is not unexpected," Ahmad Jauhari Yahya, Malaysia Airlines Group CEO, says in the company's earnings statement. "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."
Even prior for Flight 370, speculation had been mounting among industry analysts that Malaysia Air may need to revamp its operations to survive. Reuters writes the carrier 'has been squeezed between nimbler rivals like the low-cost AirAsia on short routes, and by Persian Gulf carriers and AirAsia X — AirAsia's unit for longer flights — in the medium- and long-distance markets."
Malaysia Air hinted at the possibility of a shakeup in its statement, saying "Ahmad Jauhari's focus is to drive his team forward in order to remain a relevant player in the market."
"While the search for MH370 continues more than two months since it disappeared, our group needs to accelerate efforts to improve its revenue stream and better manage our high costs which have increased in line with greater capacity," Ahmad Jauhari adds. "This need has become even more urgent for Malaysia Airlines' future survival and sustainability in a market that is not showing any signs of letting up on competition."
The Financial Times adds that the airline "this week confirmed that a 'thorough review' of its business plan was under way and that 'all avenues are being explored to ensure the long-term sustainability of the company'."