In days gone by when someone mentioned Malaysia Airlines, images of reliability and safety would immediately spring to mind. However, given events in 2014, that image has changed and arguably changed forever. For over 25 years Malaysia Airlines did not suffer a single major incident, but in just four months in 2014 they lost two aircraft and over 300 passengers lost their lives in the process. What was once a company that investors favoured, with plenty of awards to back up their credentials, has now fallen from grace. Those who are looking to add an airline to their portfolio, even in spite of what has occurred, may be asking if Malaysia Airlines shares should take a spot in their portfolio?
It may not have been widely publicised, but the company’s steady name was already being called into question prior to the missing aircraft incidents. The company lost almost $140 million in 2013, making total losses between 2011 and 2014 a total nearing $1.2 billion dollars. What may worry potential investors most will be there approach to this crisis; instead of cutting back they tried to expand, by buying other airlines. Trying to save their public image was clearly their home run swing, but after these two tragic events, even that approach has failed, with their public image left lying in tatters. It is such public image that has been driving people away from Malaysia Airlines shares.
Handling of Flight MH370
The events that unfolded were tragic, with blame obviously not to be laid completely at Malaysia Airlines door. But, in times of delicacy they needed proper management in terms of public relations. As the tragedy unfolded, it took staff members hours to respond to what was occurring, before issuing lies stating that the situation was fine, when it clearly wasn’t. When the company determined that the flight was missing, it took the company hours to raise the alarm. This has brought on wave after wave of questioning and criticism with regards to how competent the company’s staff actually is. Post-event a myriad of lies and false information were given to the public, tangling the company up even further.
Handling of Flight MH17
Details regarding what happened to flight MH17, outside of the obvious, will always be light on the ground, but once again the seemingly lazy approach to the way they’ve handled things could be a contributing factor in the company’s downfall. They may not have sat on the incident for hours without acknowledgement, but they still didn’t have their act together enough to be of any real use to investigators. Those who own Malaysia Airlines shares may very well be asking if the company can survive yet another tragic incident.
Everyone involved in the stock market dreams of a good comeback story, with a company overcoming its critics. But, those who own Malaysia Airlines shares may want to scrap their dreams of untold profits in an unexpected turnaround. It is hard to predict when such could possibly occur, but for Malaysia Airlines, such outcome must surely be considered doubtful. The damage done to the company, both before and during 2014 have reduced the Malaysia Airlines shares price to dangerous lows, which even the highest level of stock market risk taker may baulk at.