Q&A: How Malaysia Airlines can restore employee and customer confidence after 2 disasters

Published: July 20, 2014

An Ukranian man lights up candles during a candle light vigil for the victims of MH17 on July 21, 2014 in Kuala Lumpur, Malaysia. Rahman Roslan/Getty Images

THE ASSOCIATED PRESS

Malaysia Airlines is in uncharted territory after the disappearance of Flight 370 in March with 239 people aboard was followed this week by the downing of another of its jets, carrying 298 people, over Ukraine.

Before the disasters the carrier had among the worst financial performance of any airline. An even bigger question mark now hangs over the future of Malaysia Airlines, with its brand tied to two almost unfathomable tragedies.

Some analysts say the state-owned airline won’t survive a year without a substantial cash injection from the Malaysian government.

A bailout would address the airline’s immediate financial problems but without far-reaching changes it could remain a burden on taxpayers and shrivel into regional obscurity.

Several experts give their views on the airline’s crisis.

HOW BAD IS THE SITUATION FOR MALAYSIA AIRLINES?

Other airlines have come back from disasters but none have experienced two tragedies of such magnitude within the space of four months.

“There’s no historical precedent,” said Mohshin Aziz, aviation analyst at Maybank. “It’s completely not their fault, but right now if you ask any customers would they fly with Malaysia Airlines, they’d just have that negative sentiment of I’d rather choose something else.”

The airline was already losing about $1.6 million a day and has been in the red for the past three years. The disappearance of Flight 370 with many Chinese passengers on board also caused a backlash in the crucial China market. Experts don’t see any short cuts to recovery.

“It cannot be a quick fix,” said Aziz. “So the second question is do they have the financial resources to survive a year, two years? And the answer is, unfortunately, no.”

IS MALAYSIA AIRLINES TO BLAME?

The airline was blasted for its erratic response to the disappearance of Flight 370 en route to Beijing from Kuala Lumpur. Because the whereabouts of the plane was unknown, Malaysia Airlines had little meaningful information for the families of passengers. Communication of what information it did have was often mishandled, compounding the anguish of relatives.

The plane, believed to have crashed far off course in the southern reaches of the Indian Ocean, still hasn’t been found.

The fate this week of Flight 17, heading to Kuala Lumpur from Amsterdam, is far more clear-cut. It was shot out of the sky over an area of eastern Ukraine controlled by pro-Russian separatist rebels.

“They are a victim this time, so it is very different from a situation where they have no answers,” said Caroline Sapriel, managing director of CS&A, a company that specializes in reputation management in crisis situations. “The whole world is going to be sympathetic to them.”

A few airlines were avoiding flying over Ukraine, which involves taking a longer route, but most weren’t since Ukrainian authorities had not closed the airspace above 32,000 feet (about 9,750 metres).

Still, Kuniyoshi Shirai, crisis management expert at A.C.E. Consulting, said he finds the eastern Ukraine route “unthinkable” from a risk management perspective.

“Their brand is going to suffer serious damage,” he said. “There is even a possibility the airline will go out of business.”

HOW SHOULD MALAYSIA AIRLINES HANDLE THE LATEST TRAGEDY?

Clear, consistent and compassionate communications are essential, experts say.

“I think their immediate response has been consistent and caring. They are communicating on Twitter and Facebook, they are definitely going out on the commercial media,” said Sapriel of CS&A. That’s important, she said, because “if they weren’t getting the immediate response right, then it just would be the nail in the coffin for them.”

Others say that being open and transparent, continuing to assist the families of passengers and crew members while also running a punctual and reliable business will help the airline build on the sympathy about its plight.

Malaysia Airlines “appears to have learned lessons from its halting slowness to react to the MH370 tragedy and is already applying those lessons,” said aviation consultant Robert Mann.

WHAT CAN THE AIRLINE DO TO REBUILD ITS BRAND?

The airline needs far reaching changes.

“I think the Malaysian government is going to look at it eventually and say ‘Do we keep this same name or do we rebrand them?’ Maybe they will feel that they need a new name,” said Sapriel, the reputation management expert.

Because of its financial struggles, some analysts had advocated the sale of the state-owned airline to bring in fresh capital, ideas and expertise. Like all international airlines, Malaysia Airlines needs to renew its fleet with modern jets to be competitive, which requires substantial investment. Its capacity to make those investments is further compromised if travellers avoid the airline because of the disasters. But even a partial sale of the airline is unpopular with the airline’s union, the government and sections of the Malaysian public.

There are other ways it could make a break with the past, such as installing a new executive leadership.

“Malaysia needs to bring in a new CEO and head of flight operations to restore employee and consumer trust in the airline,” said travel consultant Henry Harteveldt of Atmosphere Research.

Beyond that, the carrier needs to demonstrate an absolute commitment to safety to overcome negative perceptions and rebuild confidence.

“You need an expert on risk management at the top, who has the power equal to a chief executive,” said Shirai, the crisis management executive.

“You have to change people’s consciousness. And while you’re doing all that, you have to keep the whole process transparent. Otherwise, you cannot regain the trust of either consumers or investors.”

Related Stories:

——

AP Airlines Writer Scott Mayerowitz in New York and AP Business Writers Kelvin Chan in Hong Kong, Kay Johnson in Mumbai, India and Yuri Kageyama in Tokyo contributed.

23:42ET 20-07-14

[+]

Tags: , , , , , , , , , , , , , ,



Readers Comments (0)

Comments are closed.

Featured

10336715_10152221434949315_4707600074607000802_n

Sikhs bring campaign against violence to Vancouver

LARISSA CAHUTE VANCOUVER DESI Sikhs from around the globe are bringing their efforts to “end the silence on violence” to Vancouver this weekend. U.K.-based organization…
Continue Reading »

attack on Parliament Hill

Ottawa shooter kicked out of Burnaby mosque two years ago

Zehaf-Bibeau was asked to leave the mosque, because he had “gotten a hold of keys and stuff from the mosque, and when he got out…
Continue Reading »

gambling-civic elections

Majority of Surrey mayoral candidates flat-out opposed to more casinos in the city

CHRISTOPHER POON SURREY NOW SURREY — Looking back at late 2012 and early 2013, the hot topic in Surrey was a controversial casino and entertainment…
Continue Reading »

LOCAL NEWS

10336715_10152221434949315_4707600074607000802_n

Sikhs bring campaign against violence to Vancouver

LARISSA CAHUTE VANCOUVER DESI Sikhs from around the globe are bringing their efforts to “end the silence on violence” to Vancouver this weekend. U.K.-based organization…
Continue Reading »

attack on Parliament Hill

Ottawa shooter kicked out of Burnaby mosque two years ago

Zehaf-Bibeau was asked to leave the mosque, because he had “gotten a hold of keys and stuff from the mosque, and when he got out…
Continue Reading »

OTTAWA ATTACK-TERRORISM

Canadian Muslim groups denounce violence, brace for backlash following Ottawa rampage

ISHMAEL N. DARO CANADA.COM Representatives of major Canadian Muslim groups gathered in Ottawa today to reiterate their denunciation of terrorism in the name of Islam…
Continue Reading »

Don't Miss...

Stephen Harper

Stephen Harper: Attack by ‘terrorist’ on Parliament Hill won’t weaken Canada’s resolve

JOAN BRYDEN THE CANADIAN PRESS OTTAWA – The gunman who staged a deadly attack Wednesday on Parliament Hill was a terrorist whose despicable crime will…
Continue Reading »

SURREY-FIELD HOCKEY

Barinder Rasode announces plan to develop field hockey pitch in Surrey

Third field at Tamanawis Park would cost approximately $3 million KYLE BENNING SURREY NOW NEWTON – Barinder Rasode and the One Surrey team were at…
Continue Reading »

Vancouver-Surrey-Festival-India

Diwali celebrations in Vancouver and Surrey

DiwaliFest celebrates its 11th anniversary from Oct. 17 to 26 at various sites in Surrey and Vancouver. Diwali Celebration Friday, Oct. 24 at Firehall Centre…
Continue Reading »

India-weird news

Rudaali: India’s professional ‘weeping women’ demand higher pay

CEN AGENCY Professional mourners who are hired to turn up at people’s funerals in India, beat their breasts and wail, are going on strike for…
Continue Reading »

Abbotsford

Jag Khosa: Families pay the ultimate price of gang wars

DET. JAG KHOSA SPECIAL TO VANCOUVER DESI Late into the night, the parents of a young man struggled to sleep. The mother kept tossing and…
Continue Reading »


Bollywood Latest

Salman Khan-Bollywood

Narendra Modi to attend Salman Khan’s sister Arpita Khan’s wedding?

HINDUSTAN TIMES If all goes as per plan, then Prime Minister Narendra Modi just might be attending the wedding of Salman Khan’s sister, Arpita Khan….
Continue Reading »

Bollywood kiss

Bollywood’s king of kisses Emraan Hashmi refuses to dance with the queen of sex Sunny Leone

VANCOUVER DESI Bollywood’s serial kisser Emraan Hashmi has refused to share screen space with porn star-turned Bollywood-actress Sunny Leone, Indian tabloid Mid-Day reported. Hashmi, who…
Continue Reading »

Jackie Chan

First India-China joint venture film starring Jackie Chan launched

HINDUSTAN TIMES Chinese action star Jackie Chan will star in the first Sino-India joint film production slated to go on the floors in the coming…
Continue Reading »