Flight MH370

Malaysia Airlines flight 370

Loss of flight MH370 has 'devastating' effect on Malaysia Airlines finances

PUBLISHED : Thursday, 15 May, 2014, 11:48pm
UPDATED : Friday, 16 May, 2014, 12:43am

Malaysia Airlines (MAS) has revealed the loss of flight MH370 has had a "devastating" impact on its already shattered finances.

The tragedy contributed to a widening net loss for the first quarter of 2014 to 443.4 million ringgit (HK$1.06 billion), compared to a 278.8 million ringgit loss in the same period last year.

In a statement to the Malaysian stock exchange, the national airline, beset by high fuel costs and stiff competition from low-cost carriers, said: "The tragic MH370 incident had a dramatic impact on the traditionally weak first-quarter performance."

MAS said the "additional stresses" of the disappearance resulted in a high number of cancellations, with sales in China falling by 60 per cent in March.

The struggling airline has been losing money for three years running. In 2013, it made a full year loss of 1.7 billion ringgit (HK$4.04 billion). The steepening losses are expected to trigger a major overhaul of the state-run company.

Meanwhile, Malaysia has agreed with China and Australia to reanalyse and scrutinise all data that underpinned the search for the missing plane, in light of a lack of wreckage, as the search enters a new phase.

Some 70 days have passed since the jet disappeared on March 8. Officials will now prioritise deep-sea searches, with air and surface missions having been suspended.

Hishammuddin Hussein, Malaysia's defence and acting transport minister, said: "After more than nine weeks, the search has now entered a transition phase prioritising deep-sea search. We have entered a new, difficult phase which brings with it new challenges which we will overcome together."

Malaysia is considering deploying underwater vehicles as authorities prepare for a long-term search. Deputy defence minister Abdul Rahim Bakri said national oil company Petronas would provide two autonomous underwater vehicles.

It is assumed the plane crashed in the southern Indian Ocean. The Boeing 777 disappeared off civilian radar screens with 239 people on board - mostly Chinese.

Additional reporting by Agence France-Presse