MAS hit with wave of cancellations, says report

Malaysia Airlines (MAS), already reeling from the loss of two aircraft this year, has been hit by a wave of cancellations, Bloomberg reported today.

Malaysia Airlines flight MH370 disappeared on March 8, en route from Kuala Lumpur to Beijing, while flight MH17, en route from Amsterdam to Kuala Lumpur, was shot down over eastern Ukraine on July 17.

Both disasters claimed more than 530 lives.

The financial news portal cited travel agents from Melbourne to New Delhi as saying there had been a spike in withdrawn reservations since MH17’s downing this month, with cancellations climbing above 20% in some places.

It said the Samoan women’s rugby team switched to Thai Airways from MAS on July 27 for a flight to a World Cup event in France.

“It’s just natural to be worried,” Sera Mika, the team’s manager was quoted as saying. “We did have a lot of concerns.”

The cancellations may force Khazanah, MAS’s biggest stakeholder, to take drastic action as the airline industry heads towards a record decade of fatalities.

Among the options are delisting or bankruptcy.

MAS reported losses of RM443.4 million in the first quarter of the year, from a net loss of RM278.8 million in the same period last year. Losses in 2013 amounted to RM1.17 billion.

A travel agent, Ann Chitumbalam, told Bloomberg that passengers “are very, very afraid about anything else happening again”.

Her firm, Escape Travel Sdn Bhd, based in Petaling Jaya, saw a 30% cancellation of MAS bookings.

“(Travellers) don’t want to take a risk,” she was quoted as saying.

Two days after the MH17 incident, MAS said it would waive any change fees for passengers who wished to change their itinerary to any flight destination.

“Passengers who wish to postpone or cancel their travel plans can obtain a refund, including for non-refundable tickets,” said the national carrier.

The waivers were only applicable from July 18 to July 24, for travel between July 18 and December 31. 

Bloomberg said MAS declined to comment on its passenger traffic or number of cancellations and pricing policy.

Webjet Ltd in Melbourne estimated it had cancelled about 25% of MAS bookings since the MH17 disaster, it reported.

Yatra.com, a New Delhi-based online travel agent, also reported a drop in MAS bookings and a wave of cancellations.

“They are under severe cost pressure,” Tan Kam Meng, an analyst at TA Securities Holdings Bhd in Kuala Lumpur, told Bloomberg, adding that cutting airfares was not a solution to its woes. – July 29, 2014.