Is Malaysia Airlines' New Name Coming This Week?

The state investor, Khazanah Nasional, has said a name change is imminent to "detoxify" the southeast Asia air carrier, reports The Telegraph (U.K.) today. Expected to be announced at the air carrier's shareholders meeting this week on Thursday, August 28, are company results of poor cash-worthiness, lost profitability, new capital restructuring, and even a possible name change "that aims to restore the fortunes of what is one of Asia’s oldest airlines," also confirms The Financial Times, on August 25, and Wall Street Journal, Daily Caller, New York Post, New York Daily News, The Independent (U.K.), Business Insider, and Mashable on August 26-27. Malaysia Airlines is now poised to be immediately re-nationalized and completely overhauled.

On August 8, as its share price continued to slide, Malaysia’s state-run investment company, Khazanah Nasional, announced that it would remove the struggling airline from the stock exchange, making it fully state-owned.

A statement from Malaysian Prime Minister Najib Razak said: “This is the first step needed to return our national carrier to profitability.

“It is a step I wholeheartedly support.”

One thing is now clear the southeast Asia air carrier is spending through $2.16 million a day inside its cash box, and the firm is losing $1.6 million a day in its operations.

Read also my companion breaking news story to this one on LinkedIn Pulse Airlines and Aviation Channel: Malaysia Airlines Burns $2.16 Million in Cash a Day, now shared globally across Facebook more than 190,000 times at Partnership Possibilities for America! Due to an unknown and unexplained technical glitch, nobody seems to know why at this point, nonetheless, Facebook is not permitting this companion article to be shared at this time.

When a business is burning cash, it's time to do something fast!

In recent weeks Malaysia Airlines has returned to “normal business mode”, says Hugh Dunleavy, Malaysia Airlines commercial director and the only non-Malaysian member of the southeast air carrier’s 11-member management team, having reintroduced the “tactical marketing promotions” to coax customers back – as domestic passenger numbers fell more than 20 percent this year so far into mid-August, reports The Financial Times.

Once enjoying a stellar safety record that was the finest in the international commercial passenger airline industry, Malaysia Airlines now suffers from "some of the mismanagement associated with government influence" and longstanding political earmarks in commercial service contracts considered unconventional in the global passenger airline business, industry analysts say.

“The way the government has overseen Malaysia Airlines, with all its inbuilt inefficiencies and crony contracts, is a microcosm of the entire system in Malaysia,” says James Chin, professor of political science at the Kuala Lumpur campus of Australia’s Monash University.

According to The Financial Times, Malaysia Airlines permits its highly unionized pilots to fly about 800 hours a year, forcing the air carrier to hire additional pilots compared to its closest competitors in the southeast Asia region. Regulations handed down from Malaysia's transport ministry permit pilots to fly up to 1,000 hours in some instances. Industry norms permit pilots to fly about 900 hours. As a consequence, Malaysia Airlines has 19,500 staff operating a fleet of 108 aircraft. Whereas, the Malaysian air carrier's chief competitor Singapore Airlines, operates 103 aircraft with only 14,500 employees.

Net earnings for the Malaysian air carrier in the past three years has resulted in enormous losses in the range of $400-$800 million annually. Moreover, free cash flows inside this Malaysian government-run airline business has been non-existent for nearly a decade, including substantially negative cash flows deeply in the range of $1-$1.5 billion annually during the past three years, says Reuters.

Over the past decade, specifically, the Malaysian air carrier has lost a net Malaysian Ringgit 3.56 billion (US $1.1 billion). Chief rival Singapore Airlines, in comparison, has made Singapore $8.86 billion (US $7.1 billion) without a single year of losses, reports The Financial Times.

“It provided a burning platform for us to do something,” says a person close to Malaysia’s state-run investment company, Khazanah Nasional, who has recently taken charge of the ailing Malaysian air carrier.

Executives at the investment fund have for weeks been working with consultants crafting out the latest restructuring plan to be possibly announced this week at the shareholder's meeting on Thursday, August 28. A possible restructuring plan could include: (1) union concessions and top management reshuffling, (2) staff cuts “maybe around 2,000-2,500, plus or minus,” (3) shrinking operations to focus on Asia, (4) curtailing long-haul international routes, and even (5) a name change could be possibly announced this week.

“There is a desire to see Malaysia Airlines regain its glory, but one has to ask whether this is going to happen at all costs. The answer is no,” says the person close to Khazanah.

Malaysian Prime Minister Najib Razak, who is also chairman of Khazanah, said this month that “wholesale change” – not “piecemeal changes” – would be needed to deliver a “genuinely strong and sustainable national carrier.”

Malaysia Airlines is not the only airline to collapse in the aftermath of an extreme aviation safety mishap or disaster event. Back in 1988, the iconic US airline Pan Am dissolved in three years, while it was attempting to recover in the aftermath of the bombing of flight 103 from London to New York.

Although, many airlines, like Eastern, TWA, to name a few, also folded under competitive market pressures after deregulation of the commercial passenger airline industry, as pointed out by Cole O'Shaughnessy, Sales Director at GoodData, who recently real-time engaged this article in the LinkedIn user discussion below.

A similar restructuring approach in the commercial passenger airline business was taken years ago by former American low-cost air carrier, ValuJet, upon the loss of one of its DC-9 airliners, operating as flight 592 on May 11, 1996 from Atlanta to Miami, in a crash inside a Florida Everglades swamp. After a series of safety problems and the fatal crash of Flight 592, the company merged with the much smaller regional airline AirWays Corporation, as the holding company for AirTran Airways. The former ValuJet air carrier was rename as AirTran, which has now been acquired in 2011 by highly profitable Southwest Airlines.

“Malaysia has come a long way. We are exposed to global competition and very soon if we don’t pick up the baton and run we will be in real trouble,” says to Financial Times, Ramon Navaratnam, a former board member of Malaysia Airlines, now corporate adviser to Sunway Group, one of Malaysia's largest property developers.

“So we have to stop, take stock and say: ‘Where are we going? Where are we flying to as an airline – and as a nation?’”

A Slight Safety Setback for the Cash-Strapped Air Carrier.

On Saturday, August 23, 2014, a Malaysia Airlines Boeing 777-200ER, registration 9M-MRH, operating as flight MH-70 from Kuala Lumpur (Malaysia) to Tokyo Narita (Japan), was climbing out of Kuala Lumpur, when the crew requested to stop the climb at 21,000 feet to enter a brief holding pattern, because the cabin pressure was malfunctioning, reports The Aviation Herald.

A passenger on board flight MH70 reported all cabin service was immediately discontinued, as the flight deck announced they were returning immediately to Kuala Lumpur over the safety issue.

The flight deck requested a return to Kuala Lumpur, requiring no priority or emergency ground crew assistance. The flight deck subsequently performed a rapid descent to 10,000 feet (at an average rate of descent 2,750 feet per minute), and then, U-turned the Boeing 777-200ER airliner to Kuala Lumpur International Airport for a safe landing on runway 14L about 40 minutes after departure.

According to a report on an online portal, Rakyat Post, MH70 departed from Kuala Lumpur International Airport for Tokyo’s Narita Airport at 10.50 am local Malaysian time, Saturday and that upon the Boeing 777-200ER airliner's return to Kuala Lumpur, passengers on board MH70 were told that their flight had been rescheduled to 1.15 pm local Malaysian time on a different aircraft.

A replacement Boeing 777-200ER registration 9M-MRE, operating as flight MH70, reached Tokyo with a delay of 2.5 hours.

Malaysia Airlines’ website lists that flight MH70 took off on the above airliner from Kuala Lumpur later at 1.22 pm local Malaysian time, and landed at Tokyo’s Narita Airport at 9.44 pm local Japan time (8.44 pm local Singapore time).

The Boeing 777-200ER registration 9M-MRH, originally operating as flight MH70, was later put back into service for the air carrier 13 hours after landing.

Passenger Loads Once Holding After MH370 Have Disappeared After MH17.

Since March 17, 2014, Malaysia Airlines has retired the missing Boeing 777-200ER airliner’s flight MH370 number out of respect for the missing 227 passengers and 12 crew members, according to International Business Times.

As investigators continue now approaching six months to discover the whereabouts and to recover any debris from flight MH370, believed crashed in the southern Indian Ocean, Malaysia Airlines has since replaced the flight number of the missing airliner with flight MH318, which has taken over the flight route between Kuala Lumpur, Malaysia and Beijing, China.

Photo Credit: Reuters/Edgar Su. "Malaysia Airlines flight number MH318 replaces the flight number of the missing airplane, MH370, that was retired as a mark of respect to the 239 passengers and crew lost, while the flight route remains unchanged." cf. International Business Times.

Photo Credit: Reuters/Edgar Su. "Passengers queue up outside the boarding gate of Malaysia Airlines Boeing 777-200ER flight MH318 to Beijing at Kuala Lumpur International Airport at approximately 11:50 pm local Malaysian time March 16, 2014." cf. International Business Times.

The airline firm is steadfastly managing through its last stages inside international aviation's historical dual-crisis of the MH370 aviation tragedy on March 8, a mysterious flight, which disappeared carrying 227 passengers and 12 crew. The two primary causation for the catastrophic disappearance of MH370 are the hypoxia theory or a flight deck computer malfunction that controls the altitude of the aircraft. In addition, the air carrier is managing through the wake of the MH17 aviation disaster on July 17, a sudden crash, which killed all 283 passengers and 15 crew on board and widely suspected to have been caused by a computerized Russian Buk surface to air missile (subject to, of course, final conclusions reached by international investigative teams lead by Dutch investigations still underway).

Photo Credit: Reuters/Edgar Su. "Malaysia Airlines Boeing 777-200ER flight MH318 to Beijing sits on the tarmac, as passengers are reflected on the glass at the boarding gate at Kuala Lumpur International Airport at approximately 12:20 am local Malaysian time on March 17, 2014." cf. International Business Times.

Photo Credit: Reuters/Edgar Su. "Passengers remain in their seats onboard Malaysia Airlines Boeing 777-200ER flight MH318, as it cruises towards Beijing over the South China Sea, at approximately 1:30am, March 17, 2014." cf. International Business Times.

In the aftermath of the MH17 aviation disaster, passengers are stunned by the large empty planes upon boarding, which paints a poignant picture of the business reality the southeast Asia air carrier is undergoing. Photo Credits: news.com.au

Endless Hunt for MH370 Plagues Continuance of the Southeast Asia Air Carrier.

Australian Prime Minister Tony Abbott has hinted that flight MH370's Boeing 777-200ER may never be found, as searchers prepare to start in September scouring a huge region of Indian Ocean off the coast of Western Australia. So far, there has been no debris found of the missing Malaysia Airlines Boeing 777-200ER airliner lost now for nearly six months.

Speaking on ABC Radio in Brisbane on August 20, Prime Minister Abbott did not offer any degree of certainty the Malaysia Airlines Boeing 777-200ER would be located.

“They are now going to search the entire probable impact zone, which is something like 60,000 square kilometers of the ocean floor off the coast of Western Australia,” Mr Abbott said.

“If the plane is down there, and the best expert advice is that it did go into the water somewhere off the coast of Western Australia, if the plane is down, there is a reasonable chance we’ll find it.”

Six Australian nationals were among 239 people on board the Malaysia Airlines flight MH370 that disappeared en route from Kuala Lumpur to Beijing. Suddenly, the Boeing 777-200 airliner lost contact with air traffic control on that early morning March 8, 2014, as it was transitioning between Malaysian and Vietnamese airspace.

An earlier report a few months ago by the Australian Transport Safety Bureau (ATSB) concluded that the passengers and crew may have died from hypoxia, according to Australian News Service (News.com.au).

Australian government has committed to spending $80-$90 million on the MH370 search operation. Australian authorities has selected a prime contractor in the Dutch vessel firm, Fugro, to oversee this $52 million next phase of the MH370 Boeing 777-200 search, commencing in September. A couple of huge Fugro underwater vehicles will carefully scan 60,000 square kilometers of the sea floor in the southern Indian Ocean, off the west coast of Australia. The sonar data will be sent to two Fugro vessels and interpreted by personnel on board and then reviewed by analysts on shore.

Presently there are two survey ships, the Chinese, Zhu Kezhen, and the Australian-contracted, Fugro Equator, that are dispatched to carry on the mapping tasks. This process is crucial, as it identifies any possible hazards that could affect the scheduled deep-water search. A third vessel, the Malaysian KD Mutiara, has been reported as joined now in August.

The said underwater search for the MH370 airliner will be expected to take as long as one year.

"We are cautiously optimistic we will locate the missing aircraft in the search zone," Australian Deputy Prime Minister Warren Truss said.

Martin Dolan, ATSB Chief Commissioner, said the bathymetric survey is a crucial step before commencing the underwater search, revealing underwater volcanoes, canyons and valleys, which could make debris especially difficult to spot.

"We are still...working out the details of the techniques to be used, which will vary depending on the topography of the ocean floor," said Dolan. "So there's a range of possibilities. We haven't gotten the full detail of our search plan, because we have to do that on a collaborative basis with Fugro. So there's no simple answer."

Deputy Prime Minister Truss added that it was not clear how long the operation would take. "Obviously we hope to find it on the first day, but it could take a year," he said.

"No resources are being taken away from that search for the MH17 effort; they're different people doing a different kind of job and we remain just as committed to finding that aircraft and giving comfort to those families," Truss said.

"Australia owes it to the families of all of those on board MH370, the travelling public, and indeed the wider world to solve this mystery," he said in a closing statement in recent days.

Malaysian Nation Mourns for the Return Home of 20 of 43 Malaysians Lost on MH17.

Meanwhile, Malaysians paused for a minute of silence Friday, August 22, 2014, on a nationwide day of mourning held to sacredly welcome home the first 20 remains of its 43 citizens killed, which included 15 Malaysia Airlines crew in the MH17 disaster.

Twenty-eight million Malaysians fell silent at 10:55 am (0255 GMT), about an hour after a Malaysia Airlines flight landed with the remains of 20 people killed, when MH17 was blasted from the sky by a suspected surface-to-air missile over Ukraine on July 17, reports The Telegraph (U.K.).

The special flight arrived from Amsterdam, The Netherlands, where remains have been taken for identification by Dutch officials investigating the MH17 aviation disaster and recovery.

All 283 passengers and 15 crew on board the Malaysia Airlines Amsterdam-Kuala Lumpur flight MH17 were killed, including 193 Dutch nationals. Malaysia's government has said 30 of its 43 citizens on board MH17 had so far been identified, reports The Telegraph (U.K.).

Malaysia's King Abdul Halim Mu'adzam Shah, Malaysia's Prime Minister Najib Razak, and other top Malaysian officials were on hand to receive the coffins in a solemn ceremony at Kuala Lumpur International Airport on August 22.

"Flags were flown at half-mast nationwide and authorities had earlier asked citizens of the Muslim-majority country to refrain from festive activities and to don black out of respect for the victims," The Telegraph (U.K.) said.

The Malaysian people continue to express hope that the return of these first 20 of 43 remains can help Malaysia find closure from the MH370 aviation tragedy and the MH17 aviation disaster.

"Welcome home MH17, and please come back to us MH370," as one Malaysian mourner's tweet, just about sums up the state of national affairs for the southeast Asia air carrier.

Malaysia Airlines is now in the fog of the greatest dual-crisis in international aviation safety and security history," I said recently on Reuters.

As I added further on July 18 to Reuters, it was unprecedented for a commercial airline to suffer two tragedies in such rapid succession with 537 people dead. "I don’t see how Malaysia Airlines is going to recover from this as a firm."

Photo Credit: Reuters/Edgar Su. A screen on board Malaysia Airlines Boeing 777-200ER flight MH318 shows a welcome message shortly after take off on route to Beijing at approximately 12:50 am local Malaysian time on March 17, 2014. cf. International Business Times.

__________