State support for Malaysian Airlines grows more urgent after black swan event
By Anshuman Daga and Saeed Azhar
The catastrophe followed the mystery disappearance of flight MH370 on March 8. The earlier disaster has led the airline to report its biggest loss in two years in the January-March quarter.
Sources told Reuters this month that state investor Khazanah Nasional Bhd, which owns 69 percent of MAS, plans to take it private as the first step in a major restructuring.
"Even if this is pure coincidence, it's never happened in history that such an airline as a flag carrier has seen two wide-body aircraft disappearing in a few months," said Bertrand Grabowski, DVB Bank's managing director in charge of aviation. DVB is a banker to MAS.
Khazanah, which has injected more than 5 billion ringgit ($1.6 billion) into MAS over the last 10 years, had previously said it was considering all options.
As MAS shares fall further and trade near record lows, prospects for fresh capital raising in the market are diminishing.
The stock fell as low as 18.5 sen on Friday, trading near its lifetime low of 15 sen. The shares have lost nearly 85 percent of their value in the past five years versus a 64 percent rise in the main Malaysian market index.
MAS and Khazanah did not immediately respond to queries from Reuters.
STRICKEN CARRIER
Attempts to restructure the airline have been politically fraught due to heavy opposition to job losses from its powerful labour union, which has hampered previous revival plans. Thursday's incident is seen a black swan for MAS.
"This latest incident will now compromise the brand from a European perspective," Fattorini said.
"You've got to ask whether the brand can survive this latest tragedy?"
($1 = 3.1810 Malaysian Ringgit)
(Reporting by Anshuman Daga and Saeed Azhar; Editing by Miyoung Kim and Ryan Woo)