Financial News

  • 29 August 2014, 8:39

Flight MH370: Search Shifts As Airline Suffers

The search for missing Malaysian airliner M370 which vanished on March 8 has been shifted to a different area of the southern Indian Ocean.

The announcement was made as the airline revealed the impact of the plane's disappearance on its financial performance.

Australia's Deputy Prime Minister Warren Truss confirmed the development over the search.

Analysis of a failed attempted satellite phone call from Malaysia Airlines to Flight 370 "suggests to us that the aircraft might have turned south a little earlier than we had previously expected", he said.

"The search area remains the same but... some of the information we now have suggests to us that areas a little further to the south - within the search area, but a little further to the south - may be of particular interest and priority," he said.

Dutch contractor Fugro Survey Pty will begin searching this area next month.

Three vessels will tow underwater vehicles equipped with side-scan sonar, multi-beam echo sounders and video equipment.

It could take up to a year to scour the 60,000 square kilometers (23,000 square miles) of the Indian Ocean seabed and cost Aus$52m (£30m).

Two survey ships are mapping the entire area ahead of the underwater search.

The airliner disappeared with 239 people aboard - 153 of them Chinese - after flying far off course from Kuala Lumpur to Beijing.

Experts say the investigation into what happened cannot move on until wreckage and black boxes are recovered.

The impact on Malaysia Airlines was revealed hours later when it reported a deeper net loss for the second quarter of its financial year.

The airline - which endured the loss of a second aircraft when Flight MH17 was shot down over Ukraine in July - lost $97.55m between March and June.

The two tragedies are expected to hit earnings in the months from July to December, as average weekly bookings declined 33%, with many passengers taking up the airline's offer of cancelling flights immediately after the MH17 incident.

Its statement said: "The fact that both incidents have occurred within such a short span of time ...exacerbated the situation and severely damaged the airline's brand and business reputation, accelerating the need to restructure the company."

It is expected to be confirmed on Friday that Malaysia Airlines will be taken private by its majority shareholder.

Speaking to Sky News, aviation expert Howard Wheeldon said: "I think confidence will amazingly return to the main users, who are of course the malaysians themselves, that their airline is moving into state hands.

"I think we've gone past the lowest point for Malaysian but in terms of profits it's going to be a long, long haul to turn the airline around."

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