Malaysia Airlines about to be taken over by the government?

Malaysia Airlines suffered two major aircraft losses and hundreds of victims over a period of just 4 months.

Malaysia Airlines about to be taken over by the government?

Malaysia Airlines suffered two major aircraft losses and hundreds of victims over a period of just 4 months.

It was recently asked how much more the Malaysian flag carrier could take without running into bankrupcy.

On Monday news agency Bloomber cited people familiar with the matter as saying those would be among the turnaround options presented by the airline’s board to its majority shareholder, Khazanah Nasional, this week.

The potential restructuring comes as the airline reported its passenger numbers and percentage of seats filled fell in June, even before the latest disaster hit the financially troubled airline.

The airline’s load factor, or percentage of seats filled, fell to 76.8 per cent in June, down from 84.3 per cent the prior year, according to Bloomberg. However, the June load factor was an improvement on the 68.9 per cent load factor reported in May.

Malaysia Airlines, which was not making money even before all troubles started with thedisappearance of MH370 in March, had offered low fares after the incident to help fill seats.

There was evidence the strategy was working. MH17, the flight that was shot down over eastern Ukraine last week, had been overbooked and was completely full.

The number of passengers in June fell by 3.1 per cent to 1.46 million – a lesser rate than the load factor – as the airline has expanded capacity significantly over the last year, including on routes to Australia.

The airline’s future is unclear. Khazanah had been expected to announce a plan to revive the airline within the next six to 12 months even before MH17 was shot down. Maybank analyst Moshin Aziz last month estimated the carrier would need another equity injection by mid-2015.

Bloomberg reported the airlines upcoming 2Q14 results to be the weakest ever.

The second quarter results will be released next month.
Malaysia Airlines shares were steady in trading on Monday after having closed 11 per cent lower on Friday after the MH17 crash.

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