The shocking crash of Malaysia Airlines (MAS) Flight MH17, suspected to have been caused by a sophisticated ground-to-air missile, has Malaysian officials now pushing the airline to come up with a turnaround plan within a week.
Industry sources said that the airline, backed by its key adviser CIMB Group, has been summoned to work out a "reset plan" - not within the initial timeline of six to 12 months set by majority shareholder Khazanah Nasional, but by end of this week.
"It has a week to come out with a turnaround plan. Right now, after the MH17 crisis, several options are hurriedly being reviewed," said a source.
The MH17 disaster comes some 130 days after an MAS jet - also a Boeing 777-200 - carrying 239 passengers and crew members went missing en route to Beijing from Kuala Lumpur.
Its disappearance - despite a long, rigorous search in the Indian Ocean that is still ongoing - remains a mystery till today, and worsened MAS' already wobbly financials.
For the ailing flag carrier, two disasters in quick succession may be too much to bear.
"This latest incident will cripple the airline and prolong its agony unless the Malaysian government jumps to its aid," said Shukor Yusof of Endau Analytics.
Delisting the airline (which has been mired in red ink for three straight years) remains an option, although BT understands that there are concerns among the powers-that-be that, at current levels, investors who have not yet bolted from the counter are unlikely to make a gainful exit.
The devastating disappearance of MH370 is beyond that of a struggling carrier, and MAS' shares have lost 17 per cent since early March. In May, it was under water by 35 per cent; on Friday, it got slammed further, losing 11 per cent to 20 sen.
The other option, said the source, is to inject funds of up to RM5 billion (S$1.95 billion) to help keep the carrier afloat, on the back of a worryingly high cash-burn rate of some RM5 million a day, which is fast depleting its cash reserves.
A completely new board and top management line-up cannot be ruled out. "More than funds, MAS needs a group of people with gravitas and deep understanding of the intricacies of the airline business to start the recovery path," said Mr Shukor.
Amid brutal competition - much of it led by low-cost carriers, which air travellers in the region have freely embraced - MAS is facing an uphill task to keep passenger loads and yields up.
"Not many fly MH for this Europe-bound route as their pricing is not very attractive," said Dynasty Travel Singapore's marketing communications director, Alicia Seah.
However, she observed that following the MH370 incident, when MAS cut the fares on certain routes, making it attractive to travel business class, there were many enthusiastic takers.
This article by The Business Times was published in MyPaper, a free, bilingual newspaper published by Singapore Press Holdings.