Malaysia Airlines: Actions for the Future


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Vladimir Vepryev is a consultant in business and international relations with a diverse background. A native of Ukraine, a naturalized U.S. citizen, and a firm believer in life-long enhancement of skills, he finished a Bachelor of Science in Mechanical Engineering, another Bachelor of Science in Structural Engineering, and a Master of Science in Mechanical Engineering, all from the Ukrainian State University of Water Management. Later, Vlad earned a Master of Business Administration from Georgetown University, a Master of Science in International Development Studies from the University of Amsterdam, and a Master of Liberal Arts, concentration in Government, from Harvard University. He also completed graduate studies in international management at the University of Oxford, Trinity College.

Recently, one of the leading airlines of Asia and a reputable provider of intercontinental air traveling, Malaysia Airlines suffered two catastrophic events. These disasters resulted in the unexplained disappearance of 239 individuals in the first tragedy on March 8, 2014 (Flight MH370) and then in the loss of 298 more in the second tragedy on July 17, 2014 (Flight MH17). Certainly, these horrific events lead to a lot of efforts in order to honor the victims’ lives, to help their families, to prevent such catastrophes from occurring in the future, and to avoid/decrease the follow-up problems. Alongside many others, Malaysia Airlines is a company that now became exposed to the severe follow-up problems. The aim of this article is to respond to the ideas published by Euronews (2014) in the article with the self-explanatory title, Can Malaysia Airlines survive this latest tragedy? Several other publications contributed to the discussion. Therefore, this article likewise provides observations and suggestions.

Most importantly, Malaysia Airlines deserves to survive. The company really strived to perform very well. Many new international routes were added to the flight schedules. Many measures were organized in different years in order to make the flights enjoyable. Many passengers solidified their good opinions about this airline. The company won multiple international awards for the excellent service (Malaysia Airlines, 2014; Flynn, 2014; Harvey, 2014). Malaysia Airlines achieved the status of the national success story in its home country. Because the international aviation industry introduces countries to foreign travelers, the role of the airline became especially important. In the case of Malaysia Airlines, the constant focus on the enhancement of the travelers’ experience definitely benefited the airline in the past years.

The financial situation for Malaysia Airlines did not look so optimistic even prior to the catastrophes. Since 2011, the financial losses began. The tragic events pushed the company’s stocks further down (Berr, 2014; Jansen, 2014). Also, there was some criticism of the company’s course of actions after the first disaster in March.

The company is a victim of the horrible circumstances in both disasters. Malaysia Airlines lost respectively twelve and fifteen crew members in each of these disasters. All available evidence provides clear and credible allegations against the Putin-supported terrorist groups in the Eastern part of Ukraine in relation to their missile that destroyed the aircraft performing flight MH17 on July 17. Malaysia Airlines could not have an opportunity to prevent that from happening. We may never know the exact cause of the disappearance of flight MH370 on March 8. Nothing suggests in this stage of the investigation that the disaster on March 8 was anyhow influenced by the company’s procedures, actions, and/or regulations. Even if one person piloting the plane caused the destruction, as of today such a variant remains one of the hypotheses. Furthermore, nothing limits such a consideration to the captain and the first officer of the crew. In other words, someone with a readiness to kill and to commit a suicide mission could enter the cockpit and destroy the pilots as the breakthrough to the greater tragedy. In his analysis of the events on the disappeared plane, Chris Goodfellow, an experienced pilot, emphasizes the confirmed turn of the MH370 plane in the south-eastern direction toward the Pulau Langkawi airport as an evident attempt of the pilots to change the course and to try to land in Pulau Langkawi due the problem onboard (2014; see also Ford, 2014). Therefore, the recent history indicates absence of the airline’s guilt.

There is a precedent of the company that dealt with an extreme extent of impact from the brutal terror. That was Cantor Fitzgerald, one of the leading investments firms in New York. On September 11, 2001 the company suffered tremendous losses when the hijacked plane operated by the Al-Qaeda terrorists hit the North Tower/Building One of the World Trade Center, the location of the Cantor Fitzgerald headquarters. Alongside other victims on the plane and in the buildings 658 employees were killed. The losses of lives constituted over two thirds of the total list of the company’s employees. The Cantor Fitzgerald headquarters occupied floors from 101 to 105. It was above the impact zone and the North Tower was hit first (La Roche, 2011; Edelman, 2013; Gorman, 2013). Instead, the South Tower had a number of survivors who were located in the upper portion and immediately approached the exits after learning about the plane hitting the neighboring building and before the second plane hit their own place of work.

Cantor Fitzgerald was not expected to remain in business. The economic downturn in USA in 2001 was further intensified by the September 11 attacks. Nevertheless, with the leadership of Howard Lutnick, the continuing CEO, Cantor Fitzgerald carried on the operations from the office in New Jersey, sustained the business, remained a valuable deal partner, and provided supportive payments to the families of the murdered employees. Currently, Cantor Fitzgerald keeps its solid standing in the financial industry and respect among the stakeholders.

In addition to the impressive aforementioned example, the history of victory applies to the aviation industry as well. Several major international airlines successfully went through the series of business reforms after tragic accidents. The examples include, but are not limited to Korean Air (, 2014; West, 2014), Garuda Indonesia (, 2014), and Swiss International Airlines (West, 2014). Safety of the passengers acts as the key factor in the aviation industry. Safety possesses priority everywhere. The aviation industry belongs to the group of industries where safety means the most fundamental component. Korean Air, Garuda Indonesia, and Swiss International Airlines proceeded with improvements and managed to ensure that.

Many things depend from the corporate ownership. This issue extraordinary importance for Malaysia Airlines as well. In this case, Khazanah Nasional Bhd, an investment fund, belongs to the government of Malaysia. In turn, this fund holds 69% of ownership of Malaysia Airlines (Venkat and Raghvanshi, 2014; West, 2014; Pandey, 2014). The talks about the denationalization of Malaysia Airlines started in June 2014, possibly even earlier (Venkat and Raghvanshi, 2014). After the second catastrophe, the talks about either the denationalization or the reduction of the Khazanah Nasional Bhd percentage of shares intensified (Pandey, 2014).

Overall, the way of privatization will benefit for Malaysia Airlines. However, the government of Malaysia and Khazanah Nasional Bhd need to avoid a variant of selling Malaysia Airlines to a foreign airline that will completely dissolve their acquisition in their own corporate structure. Technically, it can produce a workable variant for a perspective buyer.  But it would be not a good choice for Malaysia and Malaysia Airlines. Definitely, Malaysia needs a strong participant in the international aviation industry that will have multiple reasons for a commitment to stay in the hub of Kuala Lumpur and to provide a reliable connection between the South East Asia and other parts of the world. A potential closure of this airline or its limitation to the domestic operations would result in the re-distribution of the flow of travelers among the major airports in the surrounding countries. Eventually, such a variant would negatively impact the hotel industry, tourism, and sales in Malaysia.

Instead, other variants of privatization will work. As a result of a sale, Malaysia Airlines will receive available cash equivalents for the investments in the major strategic changes. The changes need to start immediately because the situation of Malaysia Airlines cannot afford delays. The company will be able to attract the best international experts for management, operations, and consulting participation. If and when the financial models for the new traveling routes would show net income, Malaysia Airlines may pursue these leads. Of course, much more funds and efforts can be allocated for the marketing campaigns. Additional training programs for employees and purchases of new equipment will become possible. In the case of privatization, the government of Malaysia will still be interested in the strong performance of Malaysia Airlines due to its connectivity to other industries and companies.

Another important aspect pertains to a possibility of the name change. The name change is advocated as a sign of elimination of a negative perception of the airline among the potential customers (Berr, 2014; Mulchrone, 2014; Parker, 2014). For example, Mulchrone suggests that the airline “’must change company name very quickly” (2014) in order to survive its current challenges. On the other hand, West (2014) proposes a more careful approach and mentions a concern that the name change may lead to the perception of a cosmetic make-up instead of structural changes in the way how the business is being done. Some airlines decided to change their names in the times of major reforms in the past (Berr, 2014; West, 2014).

The question of the name needs to be studied very carefully by the management of Malaysia Airlines. In order to avoid a perception of a cosmetic make-up, it cannot be the first step. In the day and age of the Internet, the previous history of any airline can be checked even faster than the selection process in the online ticket purchases. Therefore, if the name of Malaysia Airlines will remain, but other changes will take place, such a strategy may succeed. It would illustrate an honest approach to sincere and serious changes without any desire to hide anything. The name by itself does not guarantee safety or service. In addition, the old name may be signaling the continuity of everything good that transpired in the past. However, other related changes need to occur in Malaysia Airlines. The company needs to modify branding, to change the advertising campaigns, to add new attractive slogans for customers, to remodel the corporate logo, etc.

If the name of the airline will be changed, the company absolutely needs to keep the name of the country as an integral part. Harvey (2014) provides the record of the public demonstrations in Kuala Lumpur in solidarity with Malaysia Airlines in this challenging time. The population of Malaysia supports the airline due to their patriotic feelings. The deletion of the name of Malaysia would signal a betrayal. Parker (2014) refers to an opinion that the presence of the name of the country in the name of the airline enhances the tourism industry. Instead the reference to the air does not appear mandatory. The word “airlines” may be substituted with something that has significance in the Malaysian culture. Such variants as Malaysia Air or Malaysia Airways will not be optimal. They share a minimally recognizable difference from the old name, but still attract the attention to the fact of the name change.

One similar variant may attract more attention. The current full name of the company is Malaysia Airline System. The abbreviation MAS already can be mentioned in some cases. This abbreviation can be elevated to the status of the main name for all purposes. It has the reference to Malaysia. It will be quick and easy to memorize. The message of connectivity of the company with its own prior historic accomplishments seems evident. Some companies in other industries followed a similar path. British Petroleum eventually became known as BP. Kentucky Fried Chicken prefers to go by KFC.

Regardless from the important decision about the name, other changes have to indicate the dedication of the company to improvements. Malaysia Airlines needs to become a safety activist company. It would be irresponsible for any airline to overpromise a complete guarantee of safety. The factors of terrorism and major natural disaster still exist. Instead, Malaysia Airlines needs to attract a public attention to the issues of air safety and in particular, to the aspects of terrorism and safety technologies. The safety training may need to be further intensified and even broadcasted to the potential clientele. The company needs to invest in the additional safety consulting. Hugh Dunleavy, the Commercial Director and the Head of Network, Alliance, and Planning at Malaysia Airlines demonstrates the dedication to real changes when he calls for the fundamental re-organization of the safety measures in the aviation industry in his article (2014). Dunleavy corrects points on the supreme importance of cooperation and teamwork of the aviation industry for the goal of safety (ibid) and Malaysia Airlines has a chance to emerge as the leader of this effort. The control and verification of boarding passengers must reach the level of international pride. Malaysia Airlines needs to apply the strictest scrutiny for the decisions to fly over zones that may be considered potentially dangerous for any reason. The recent decisions of Malaysia Airlines about the more detailed security check already indicate the correct direction.

In his analysis of the current situation for Malaysia Airlines, West provides an excellent study for various airlines and their course of action after the major air traffic disasters (2014). For the sake of comparison, West brings a lot of important details from the experience of Korean Air, such as re-branding in the 1980s and the major changes in hiring practices, trainings, and service improvements in the 1990s (ibid). However, when some air carriers indeed went out of business after a fatal air disaster, West focuses on this reason as on the primary explanation of ceased business operations by an airline company. Instead, the picture is somewhat more complicated. Independence Air avoided air disasters, but ceased the operations in 2006.With all the profound importance of the safety record, many other complicated factors bring the airlines to their position between the leadership in the industry and the increased net income on one side, and bankruptcy and/or takeover on another side. These factors of influence include financial standing, accounting efficiency, strategic business solutions, hiring policies, operations costs, number of routes, frequency of flights, exploration of new markets, the level of success in the marketing competition, ticket pricing, governmental administrative regulations, quality of service, etc. All these factors create the positive part of the brand recognition when they are being performed correctly. The positive part equals to a lot of work and possesses an especially essential meaning for the airlines in the conditions of the safety-dependent business. On the contrary, the air traffic disasters contribute to the negative part of the brand recognition even when the reasons may be outside of the company’s control.

Furthermore, competitors fight for market share. When some company’s results may be good, those of a competitor may be even much better. All accomplishments need to advance in the dynamics of competition.

In relation to safety, air carriers need to do two things correctly. Safety has two parts as well here, but both of them can be positive. The first part means to make the maximal possible efforts for the avoidance of a danger. The second part requires to demonstrate the real evidence and to make a strong message in relation to such efforts to the entire world. The second part needs to transpire regardless from the presence or absence of any accidents and/or near-misses. Still, it must be reiterated that the message about the total impossibility of an accident would be neither ethical nor realistic. Even when such as message comes from sincere and efforts-based aspirations.

Malaysia Airlines may need to study what it can offer to emerging markets. Right now, it may look as an overly long shot, it may be not feasible financially, but this strategic direction needs to remain in the list of future priorities. The emerging markets will experience an increase in the international traveling very soon. Developing vacation destinations can be identified as another group with promising opportunities. In a case of economic growth in Eastern Asia and the Pacific Region, Kuala-Lumpur enjoys the strategic location of a connecting point with Europe, Africa, and the Middle East. This opportunity needs to be further utilized.

Based on their knowledge and experience, Dunleavy and other members of the management team believe that Malaysia Airlines will overcome the challenges. The airline has a lot of work ahead. Still, it is possible for Malaysia Airlines to succeed even in these circumstances. Yes, in response to the Euronews question, it is realistic to consider that Malaysia Airlines can survive. Making Malaysia Airlines the success story of the future would be a fundamental competitive advantage for the airline in the long term.



Berr, Jonathan (2014). Can rebranding turn around Malaysia Airlines’ fortunes? CBS Money Watch. ( Published on July 29, 2014. Accessed on July 29, 2014.

Dunleavy, Hugh (2014). Airline companies must demand safe skies, says MH17 operator. Sunday Telegraph. ( Published on July 26, 2014. Accessed on July 30, 2014.

Edelman, Susan (2013). Names on 9/11 Memorial arranged by friendships. New York Post. ( Published on September 7, 2013. Accessed on July 28, 2014.

Euronews (2014). Can Malaysia Airlines survive this latest tragedy? Euronews. (  Published on July 18, 2014. Accessed on July 23, 2014.

Flynn, David (2014). Why I’ll still fly Malaysia Airlines, despite the loss of MH370. Australian Business Traveler. ( Published on March 20, 2014. Accessed on July 30, 2014.

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La Roche, Julia (2011). The amazing and heartbreaking story of the CEO who lived and rebuilt his firm after 9/11: Howard Lutnick. Businessweek. ( Published on September 11, 2011. Accessed on July 29, 2014.

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Mulchrone, Patrick (2014). Malaysia Airlines ‘must change company name very quickly’ after flight MH370 and MH17 disasters ruined image. Daily Mirror. ( Published on July 29, 2014. Accessed on July 29, 2014. (2014). Twin tragedies of MH17 and MH370 push Malaysia Airlines to the brink. ( Published on July 2014. Accessed on July 29, 2014.

Pandey, Avaneesh (2014). Malaysia Airlines privatization likely as state-owned parent seeks greater control: Reports. International Business Times.  ( Published on July 22, 2014. Accessed on July 30, 2014.

Parker, Andrew (2014). Malaysia Airlines consider rebranding. CNBC. Originally published in Financial Times. ( Published on July 27, 2014. Accessed on July 30, 2014.

Venkat, P.R., and Gaurav Raghuvanshi (2014). Malaysia Airlines could go private. Wall Street Journal. ( Published on July 2, 2014. Accessed on July 30, 2014.

West, Karl (2014). Is there a future for Malaysia Airlines after flights MH370 and MH17? Guardian. ( Published on July 29, 2014. Accessed on July 29, 20

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