Malaysian Airline System Bhd. is facing an influx of passenger cancellations after the carrier’s second disaster in four months.
Travel agents from Melbourne to Singapore, New Delhi and Malaysian Air’s home country said they’ve seen a spike in withdrawn reservations since MH17’s downing this month ― with cancellations climbing above 20 percent in some places. The Samoan women’s rugby team switched to Thai Airways International Pcl from Malaysian Air on July 27 for a flight to a world cup event in France.
The cancellations may add to the financial difficulties of an airline whose state-run parent, Khazanah Nasional Bhd., estimated it only had enough cash to operate for a year even before the latest crash. Malaysian Air has suffered the loss of 537 people this year, as the airline industry heads toward its worst year in almost a decade for fatalities.
Members of Malaysian Airline System ground staff serve passengers at check-in counters at Kuala Lumpur International Airport in Sepang. (Bloomberg)
Passengers “are very, very afraid about anything else happening again,” said Ann Chitumbalam, manager at Escape Travel Sdn.’s branch in Petaling Jaya, who’s seen about 30 percent of Malaysian Air bookings through her office canceled. Ticket holders “don’t want to take a risk,” she said.
Chitumbalam said she received a text message from a businessman within hours of the crash, canceling a trip to Amsterdam on Malaysian Air.
The airline said July 19 it would refund fares to customers postponing travel or canceling their tickets, including non-refundable ones. It also agreed to waive any fees for people changing travel plans to any destination Malaysian Air flies to during 2014, as long as they applied from July 18-24.
Subang-based Malaysian Air, responding by email to questions about passenger traffic, declined to give numbers of cancellations or to comment on ticket prices.
While passenger traffic figures since the July 17 downing of Flight 17 aren’t available, Webjet Ltd. in Melbourne estimates it’s canceled about a quarter of its Malaysian Air bookings since the disaster, which killed all 298 people on board and occurred four months after the disappearance of Flight 370.
Yatra.com, a New Delhi-based, online travel agent, saw an increase in cancellations and a dip in Malaysian Air bookings after the latest incident, said Sharat Dhall, the company’s president.
“It’s just natural to be worried,” Sera Mika, manager of the female Samoan rugby team, said by phone from Auckland. “We did have a lot of concerns.”
In Singapore, Dynasty Travel estimates passengers will think twice before booking flights with the airline.
“Many will avoid Malaysian Air for the time being,” said Alicia Seah, spokeswoman at Dynasty Travel, one of the three largest leisure travel agents in Singapore, without specifying any number for cancellations. “This is certainly a double whammy for the airline.”
Malaysian Air, which racked 4.13 billion ringgit ($1.3 billion) in losses in the past three years, will probably lose more than 1 billion ringgit in 2014 as it grapples with costs and an exodus of passengers, according to the average analyst estimate compiled by Bloomberg.
In June, before the latest disaster, Malaysian Air carried 3.1 percent fewer passengers than a year ago, the second straight monthly drop. The previous month saw the highest proportion of empty seats since 2009. (Bloomberg)