Moscow wants report on UN role in probing MH17 crash

A photo taken on September 9, 2014 shows part of the Malaysia Airlines Flight MH17 at the crash site in the village of Hrabove (Grabovo), some 80km east of Donetsk. The Malaysian passenger jet which blew up over rebel-held east Ukraine with the loss of all 298 people on board was hit by numerous "high-energy objects", according to a report on September 9, 2014 which could back up claims it was downed by a missile. While the preliminary report from Dutch investigators does not point the finger of blame over the July disaster, it could heighten Western pressure against Moscow over its role in the bloody Ukraine conflict. AFP PHOTO/ ALEXANDER  KHUDOTEPLY

A photo taken on September 9, 2014 shows part of the Malaysia Airlines Flight MH17 at the crash site in the village of Hrabove (Grabovo), some 80km east of Donetsk. The Malaysian passenger jet which blew up over rebel-held east Ukraine with the loss of all 298 people on board was hit by numerous “high-energy objects”, according to a report on September 9, 2014 which could back up claims it was downed by a missile. While the preliminary report from Dutch investigators does not point the finger of blame over the July disaster, it could heighten Western pressure against Moscow over its role in the bloody Ukraine conflict. AFP PHOTO/ ALEXANDER KHUDOTEPLY

Russia’s U.N. ambassador says Ukrainian rebels and the Russian government were blamed for involvement in the crash of a Malaysian Airlines jet in July without any proof as part of “an information war.”

Vitaly Churkin told the U.N. Security Council Friday that the only way a transparent and objective international investigation can be carried out is with the participation of the United Nations.

Churkin, who called for the council meeting, said the preliminary report into the crash released Sept. 9 “is not really informative.” It said the Boeing 777 was likely struck by multiple “high-energy objects from outside the aircraft,” causing its breakup over eastern Ukraine.

He said Russia has new questions stemming from the report and called for the release of alleged information on what happened, including satellite photos.

Capt. Ivan

Government to Take Over Troubled Malaysia Airlines

Malaysia’s government will carry out a “complete overhaul” of its troubled national airline in an attempt to revive company after it was hit by two devastating disasters this year.

The move on Friday to de-list Malaysia Airline System and take it private had been expected since ticket sales slumped in the wake of the baffling disappearance of MH370 on March 8 with 239 passengers and crew. The airline’s crisis deepened on July 17 when another jet, Flight MH17, was shot down over Ukraine, killing all 298 people on board.

State investment fund Khazanah Nasional’s [KHAZA.UL] proposed 1.4 billion ringgit ($436 million) buy-out of the shares it does not own paves the way for it to take steps such as cutting back on less-profitable routes, trimming the bloated payroll and installing a new management team.

A full-scale rebranding of the airline, which has reported losses for the past three years, could also be considered as it grapples with shaky customer confidence following the twin tragedies.
Khazanah said it will need cooperation “from all parties” to undertake the restructuring, covering the airline’s operations, business model, finances, staff and the regulatory environment.

“Nothing less will be required in order to revive our national airline to be profitable as a commercial entity, and to service its function as a critical national development entity,” it said in a statement.
Political considerations will play a important role in the restructuring of the company, which like other state-owned firms, has been used by the government to promote development goals such as affirmative action policies for majority ethnic Malays. Reuters first reported on the possible restructuring in July.
Khazanah has injected more than 5 billion ringgit ($1.6 billion) into MAS over the last 10 years, as it has increasingly struggled in the face of competition from upstart budget airlines such as AirAsia Bhd.

POLITICAL SENSITIVITIES
Attempts to restructure the airline over the years have been politically fraught due to heavy opposition to job losses from its influential labor union.

“There is no point in going to another airline or getting some private equity team involved or anything like that because the government will effectively have to offer some sweeteners to the union to diminish their power and diminish their size,” said Timothy Ross, Asia transportation analyst at Credit Suisse. “They probably employ 5,000 people too many.”

The carrier has a fleet of 151 planes and a total staff of nearly 20,000 employees.
The head of Malaysia Airline’s main labor union said it would support the plan only if the current top management team, led by chief executive Ahmad Jauhari, was replaced.

“Ahmad Jauhari has had three years to turn things around. We’ve made it very clear, we will support a new team that has the aviation knowledge and integrity for the job,” Mohd Jabarullah Abdul Kadir told Reuters.
Khazanah will offer 27 sen for each share in the company it does not own, amounting to 1.38 billion ringgit, a 12.5 percent premium to the closing share price on Thursday, MAS said in a statement after suspending its shares.

“DRAMATIC IMPACT”
Khazanah, which owns 69.37 percent of MAS and is chaired by Prime Minister Najib Razak, said it expected to give more details of the planned restructuring by the end of August after it has secured approval from shareholders.
The airline and its key stakeholders are in talks with banks for a strategic overhaul that could include the partial sale of its engineering unit and an upgrade of its ageing fleet.

The company turned in its worst quarterly performance in two years in the January-March period and has been burning through its operating cash.

The carrier warned in May of a “dramatic impact” on passenger traffic from the loss of Flight MH370. The July 17 disaster, in which MH17 was believed to have been shot down by Russian-backed rebels in Ukraine, sped up government efforts to restructure the airline, sources said.

Sources had told Reuters in July that planned to take the airline private as the first step in a major restructuring. The state investor is working with CIMB Investment Bank on the restructuring, the sources added.
“This is the sensible way forward given that massive surgery is required,” said Christopher Wong, a senior investment manager at Aberdeen Asset Management Asia.

Mohshin Aziz, an analyst from Maybank Investment Bank Research, said the price offered by Khazanah was a fair deal for minority investors.

Source: Reuters
Photo: Reuters

Malaysia Airlines, or an Airline Fighting to Keep Their Employees.

Malaysia’s beleaguered flag carrier will be paying each employee RM2,000 as a token of gratitude for standing by the airline despite its financial losses made worse by the loss of two Boeing planes this year.

The Edge Financial Daily reported today that Malaysia Airlines (MAS) chairman Tan Sri Md Nor Yusof announced the ex-gratia payment two days before the Hari Raya Aidilfitri celebrations and that all 19,577 staff can expect the payment as early as next month.

“The management, in consultation with the government, has agreed to give RM2,000 in ex-gratia payment to all staff,” an unnamed industry source was quoted saying.

According to the report, the payment is expected to total RM39 million and will drive MAS — already reeling from the loss of MH370 in March and more recently MH17 — further into the red.

The report cited Maybank Investment Bank Bhd airline analyst Mohshin Aziz as saying MAS only has cash in hand of RM500 million, adding that the amount would see the airline only through another 200 days.

According to Mohshin, the airline has a cash flow of RM3.25 billion as at March 31, but as much as RM2 billion was derived from forward ticket sales while another RM400 million was meant as aircraft deposits.

MAS has been operating at a loss of about RM5 million a day since January, he added.

The carrier posted a net loss of RM1.15 billion for financial year 2013 and is due to announce its second quarter result in August.

On July 19, MAS announced it will waive charges for customers who wanted to make amendments to their flight itineraries to any destination, including cancelling and getting a full refund.

The airline offered the waiver to those who would be traveling between July 18 and December 31 this year.

MAS has been bleeding money for the past few years but its fortunes worsened after its Boeing 777 flight MH370, carrying 239 people on board disappeared mid-flight to Beijing on March 8, while its second jumbo jet, flight MH17 was shot down over war-torn eastern Ukraine on July 17, killing all 298 people aboard.

Source:  The Malay Online

Can Malaysia Airlines Survive this New Tragedy?

The airline industry depends largely on inspiring confidence to its users, the cumulative impact of two disasters on which 537 people lost their lives in a period of five months is bleeding Malaysia Airlines.

No airline had previously suffered two consecutive losses of wide body aircraft, in this case two Boeing 777.
The tragic end of flight MH17 in eastern Ukraine last week adds to the loss of another flight, MH370, in March somewhere in the Indian Ocean.

Malaysia Airlines MH17 wreckage, hit by a missile over Ukraine.

Malaysia Airlines MH17 wreckage, hit by a missile over Ukraine.

The airline has suffered an extraordinary dose of bad luck. It is unclear how or why the first aircraft was lost, the MH370. In the second tragedy, the plane was on a route approved by the authorities when he was apparently hit by a missile.

Regardless of whether Malaysia Airlines had any guilt, for many potential users, the name of the firm has acquired a negative connotation.

And so it is not surprising that many customers are avoiding the Asian carrier, which according to analysts, loses about $ 1.7 million a day.

Speaking to the BBC, Mohshin Asiz, financial analyst at Maybank in Kuala Lumpur ensures that the obstacles faced by Malaysia Airlines are “insurmountable” without a significant injection of new money, ensures, that airline will survive not more than a year.

Experts speculate that the savior could come from the Malaysian government, which is already the majority investor in the airline, through its state investment fund Khazanah National.

But even if the airline got this new funding, it is not clear that is viable in the long term.
The market value of the firm has fallen over 40% in the last nine months.

The BBC asked Chris de Lavigne, consultant specialized firm Frost & Sullivan, what might be the options that remain with the airline.

“They can continue as they are, throwing more and more money to the airline, but I think that’s a viable long-term option,” he says.

“Secondly you can try something like what Japan Airlines did, to invoke protection laws bankruptcy and try to fix it from there.”

And thirdly they may attempt to privatize the airline, changing the name and image of the company, says Chris de Lavigne.

The expert believes that either option will be costly and complex.
Moreover, he warns, disasters that hit Malaysia Airlines have affected the rest of the aviation industry in the region.

“The lack of security, which is the number one concern of any airline, we will create problems for consumers”.

 

Capt. Ivan

Photos:

– Reuters

– Getty

Malaysia Airlines B777-200 Crash in Ukraine

A Malaysia Airlines B777-200, flight MH17 from Amsterdam to Kuala Lumpur with 280 passengers and 15 crew was enroute at FL330 50 NM northwest of Donetsk (Ukraine) when suddenly dissapeared from the air traffic control radar.

Latest reports indicate that the burning wreckage was discovered near the Ukrainian – Russian border. There were no survivors. A government agency declared that the aircraft has been shoot down. The investigation continues.

Malaysia Airlines has confirmed the accident.Malaysia Airlines have confirmed an incident, the aircraft did not enter Russian Airspace so far, about two hours after the estimated entry into the airspace. At 15:40Z Malaysia Airlines tweeted: “Malaysia Airlines has lost contact of MH17 from Amsterdam. The last known position was over Ukrainian airspace.

Capt. Ivan

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