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Can the Malaysia Airlines brand be saved?

As the financials roll out for beleaguered Malaysia Airlines, it looks like the loss of MH370 could prove irreparable for the brand.

In a statement on Thursday, the airlines said its first-quarter net loss has expanded by nearly two-thirds to RM443.4 million from RM278.8 million a year ago, its worst quarterly loss yet in two years, following its missing airline tragedy.

The number of passengers has dropped sharply after MH370’s disappearance. The percentage of seats sold slipped to 74.1%, close to January 2013’s record monthly low of 73.9%

According to The Star, the airline has cancelled close to 900 flights since the plane’s disappearance. Cancellations were mainly for China and Asian flights, said the article.

Prime Minister Najib Razak has told The Wall Street Journal in an interview that even bankruptcy is one of several options being considered to restructure the national carrier.

This follows multiple attempts made to turn around the airline’s fortunes.

Even prior to the loss of the plane, the airline was already suffering financially, with the government going through several moves to revamp its business strategy. This has been attributed to the airline’s high staff costs and competition from low-cost carriers such as AirAsia and Malindo Air.

Can it be saved?

Advertising + Marketing spoke to several industry executives to ask their opinion on the possibility of the brand being saved.

CEO of Consulus, Lawrence Chong, noted that the impact of the MH370 incident would not go away any time soon. For instance, simply because of the prolonged search mission, anytime an update comes up on the mission, it would be a reminder of the incident.

“Malaysian Airlines is probably damaged in the same way as Pan Am was, by the 1988 Lockerbie bombing incident, of which Pan Am never recovered from and eventually went into liquidation. So I would rate the damage as a near fatal blow, given the fact that Malaysian Airlines was already trying to revive its business prior to the incident,” said Chong.

He added that an event like this would affect much of what the company is trying to do. On top of this, MAS has strong competition on the home ground from AirAsia and other international carriers.

Just shortly after the MH370 disappearance, AirAsia already put out an ad, jibing at MAS woes with the missing plane. While the effort was promptly slammed by the public, the incident only served to highlight the competitive aviation scene MAS is facing now.

However, Chong believes that with a radical approach, it is possible to turn the brand round.

He told Advertising + Marketing that it is important for MAS to delist themselves from the stock exchange and take it private.

“Any more quarterly announcements of poor revenue numbers will simply knock the brand further down,” he says.

He also thinks that the airline should be restructured, making it more efficient with the help from the government and infusion of private equity funds. On top of that, rationalising routes and striking a partnership with other airlines like Air Asia will help the brand to stay under the radar.

The brand experience too should be restructured as the advertisements and the inflight experience seldom match, said Chong.

“I always thought that Malaysian Airlines brand experience did not go far enough to express the richness and diversity of the country. They should make it work in an integrated fashion like how Air New Zealand is doing, in terms of having an integrated experience and messaging,” he said.

Orchan Consulting’s founding director Farrell Tan on the other hand said that being transparent to the public is the answer.

“Moving forward, MAS need to be publicly transparent on what they are doing to monitor planes, pilots, and passengers. They need to address issues relating to cargo, and what cargo may be in a plane that passengers are embarking in, and they need to highlight and prove a sustained improvement in not only service, but public relations and communication to the public,” Tan says.

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