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A Lot Was Lost With Flight MH370 For Malaysia Airlines

in Latest/Politics

KUALA LUMPUR – What happened to the Malaysia Airlines jetliner that vanished a year ago while flying over the South China Sea? No one knows.

The Boeing 777, with 239 passengers and crew aboard, last made voice contact with air traffic control at 1:19 a.m., March 8, 2014, while over the South China Sea. That was less than an hour after takeoff. The plane, on its way from Kuala Lumpur to Beijing, then changed course. Malaysian military radar tracked it as it crossed the Malay Peninsula over the Andaman Sea.

MH370 was eventually piloted out of the Malaysian military’s radar range. Where it ended up remains one of aviation’s biggest mysteries.

A search is ongoing. But Tony Abbott, prime minister of Australia, which is leading the effort at the behest of Malaysia, recently cautioned that the operation could be scaled down. On March 5, he told parliament he could not promise that the search “will go on at this intensity forever.”

The Malaysian government has concluded that all passengers and crew are dead. But no bodies, nor even a trace of debris, has ever been spotted.

Malaysian Airlines, which nearly went bankrupt, was also rocked in July, when another of its jetliners, flight MH17, with 298 people aboard, was apparently shot down over strife-torn Ukraine. It was on its way from Amsterdam to Kuala Lumpur.

The lost and downed flights came as Malaysia Airlines had already been suffering from an onslaught of budget airline competition.

The airline’s owner, a Malaysian sovereign wealth fund, has appointed Christopher Mueller as the carrier’s first foreign CEO. Mueller began the massive restructuring job March 1.

Part of the turnaround will almost certainly entail massive job cuts. But to get them, Mueller will have to battle a powerful labor union.

It is not the German’s first turnaround job. He most recently straightened out Ireland’s Aer Lingus. Before that, he got Belgium’s state-owned Sabena back up and flying.

His first task in his new job has been to review Malaysia Airlines’ outsourcing contracts.

The carrier has already renegotiated its contract with Brahim’s Airline Catering, which supplies in-flight meals. At the end of February, the caterer agreed to cut Malaysia Airlines’ monthly bills by 25%.

Brahim’s is managed by relatives of former Prime Minister Abdul Razak Hussein; the airline had long been criticized for paying too much for the food it served.

In another important move, the airline has decided to prune unprofitable routes. Khazanah Nasional, the airline’s owner, has said the carrier will reduce its passenger transport capacity by more than 10% by the end of this year. Under review are flights to Europe and the Middle East.

The decision represents a major policy change for an airline that has kept flying unprofitable routes because of its flag-carrier status.

Mueller’s toughest challenge, however, will be those job cuts.

The airline has been under strong pressure to reduce its excessive workforce since last spring’s mystery disappearance. It currently has 20,000 employees.

Khazanah, which wants to reduce that number by 30%, finished evaluating every employee at the end of February.

Massive job cuts were a big reason Mueller was able to turn around Aer Lingus. But Mueller will face an uphill battle duplicating that success with Malaysia Airlines.

The country’s ruling party counts the airline’s labor union as an important voting bloc, and the union has a history of wielding its political clout to block restructuring measures.

The union remains dead set against any workforce reduction.

Just before it was delisted on Dec. 12, Malaysia Airlines announced a net loss of 576 million ringgit ($157 million) for the July-September quarter.

Fuel prices have since plummeted, which is expected to improve the airline’s earnings. But the success of the carrier’s fix-it plan still hinges on whether Mueller can substantially cut costs — and that means jobs.

Malaysia Airlines is not alone in Southeast Asia when it comes to tragedy. At the end of December, an AirAsia flight on its way from Surabaya, Indonesia, to Singapore plunged into the Java Sea.

While the causes of these accidents have not been fully ascertained, they seem to suggest that the region’s airlines and regulators have failed to keep up with the sharp increase in passenger traffic.

The total number of passengers who used Southeast Asia’s four busiest commuter airports — Sokaerno-Hatta, which serves greater Jakarta; Singapore Changi Airport; Suvarnabhumi, Bangkok’s main gateway; and Kuala Lumpur Airport — topped 210 million in 2013, up 50% from 2009.

The surge in passenger traffic is due mainly to a sharp increase in the number of budget airlines.

The AirAsia flight that crashed into the Java Sea did not have the paperwork to fly that day. Other airlines in Indonesia were discovered to be operating unauthorized flights as well.

The facts indicate aviation authorities have been overwhelmed by the huge number of flights.

Airline management teams also seem to be having trouble keeping up.

The Malaysia Airlines flight that was apparently shot down was flying over an area where armed conflict was taking place.

Even though flights over the area were not banned, the airline’s commitment to safety was called into question.

Southeast Asian airlines are also grappling with a shortage of experienced and skilled pilots.

In response to the AirAsia crash, Indonesia’s Ministry of Transportation raised the floor under airfare discounts.

Previously, low-cost carriers were allowed to offer discounts of up to 70% of the highest price on each route, or tickets that cost only 30% of the top fare. That floor is now 40%.

The measure is meant to get management thinking more about safety and less about discounts. But it is certain to hamper the country’s efforts to nurture its airline industry.

Instead of intervening in this way, the region’s civil aviation regulators should work together to develop and enforce stricter regulations based on the lessons gleaned from the recent accidents. – CNN

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