The Consequences for Malaysia Airlines

In the wake of a second disaster tethered to Malaysia Airlines, the Associated Press (AP) ran a story last night about the effect both crashes have on the airline’s brand. That’s something I’ve been thinking about quite a bit after hearing of each crash: will people still want to fly with them? I’ve aggregated a few parts of the article here.

Some analysts say the state-owned airline won’t survive a year without a substantial cash injection from the Malaysian government.

A bailout would address the airline’s immediate financial problems but without far-reaching changes it could remain a burden on taxpayers and shrivel into regional obscurity.

The article assesses just how bad the situation is for Malaysia Airlines:

“There’s no historical precedent,” said Mohshin Aziz, aviation analyst at Maybank. “It’s completely not their fault, but right now if you ask any customers would they fly with Malaysia Airlines, they’d just have that negative sentiment of I’d rather choose something else.”

The airline was already losing about $1.6 million a day and has been in the red for the past three years. The disappearance of Flight 370 with many Chinese passengers on board also caused a backlash in the crucial China market. Experts don’t see any short cuts to recovery.

Is Malaysia Airlines to blame? Not really. Both situations were out of their control. But they could’ve handled the disappearance of Flight 370 a lot better.

The airline was blasted for its erratic response to the disappearance of Flight 370 en route to Beijing from Kuala Lumpur. Because the whereabouts of the plane was unknown, Malaysia Airlines had little meaningful information for the families of passengers. Communication of what information it did have was often mishandled, compounding the anguish of relatives.

This time, the AP says it’s different.

“They are a victim this time, so it is very different from a situation where they have no answers,” said Caroline Sapriel, managing director of CS&A, a company that specializes in reputation management in crisis situations. “The whole world is going to be sympathetic to them.”

And I must admit I’m sympathetic to Malaysia Airlines. They’ve been through a lot in the past few months- and naturally they’re the ones people blame first for these tragedies.

The article then talks about what Malaysia Airlines should do to improve its brand.

“I think the Malaysian government is going to look at it eventually and say `Do we keep this same name or do we rebrand them?’ Maybe they will feel that they need a new name,” said [Caroline] Sapriel, the reputation management expert.

Experts also advised the modernization of the airline’s aging fleet of jets- a must if they want to stay competitive with the rest of the world’s airlines.

It’s terrible what the families of the passengers as well as the airline have gone through, and I hope everyone (including Malaysia Airlines) can get past it all.

If you want to read the full article, the link is below:

http://hosted.ap.org/dynamic/stories/A/AS_MALAYSIA_AIRLINE_BRAND?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT

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