Malaysian Airlines Flight 370: Analysts Estimate Air Carrier Would Lose Another $346 M by 2016; JACC Rejects GeoResonance’s Claim That Debris in Bay of Bengal is Missing Jet
By Vittorio Hernandez | April 30, 2014 6:28 PM EST
There are no doubts over where the missing Malaysia Airlines Boeing 777 jet could have possibly crashed, even as a pilot and an Australian company claim the ill-fated Flight 370 with 239 people on board is in the Bay of Bengal.
A man travelling on a stolen passport on the missing Malaysian Airlines flight MH370 was a young Iranian who has no links to terrorists.
As authorities investigate the new claims, while the Australian government announced earlier this week the expansion of the search area, one thing is certain.
That is the mysterious disappearance of the aircraft, now missing for almost two months, has worsened the declining financial state of the 67-year-old embattled Kuala Lumpur-based air carrier.
Already running losses of $1.3 billion in the past three years prior to the disappearance on March 8 of the Beijing-bound plane, Malaysian Airlines is forecast to register an additional $346 million loss by the end of 2016, according to estimates of analysts compiled by Bloomberg.
Since the disappearance of the jet, air travellers have been avoiding flight with the MH code that vacant seats rose to 26 per cent in March from 20 per cent average in 2013. It is the highest figure in two years.
With the search still on-going and Malaysian authorities declining to officially the passengers and crew dead to avoid further antagonising their relatives, Malaysia Airlines nevertheless is incurring a lot of expenses in paying for the hotel bills of the kin of the 150 Chinese passengers billeted in a Beijing hotel.
That is ahead of anticipated astronomical insurance claims as well as possible class action lawsuits against Malaysian Airlines, which could be the last nail on the air carrier's coffin. Under an international treaty, the airline is liable to pay up to $175,000 per passenger or over $40 million as compensation.
Shareprices of the air carrier had also dropped 10 per cent since March 8, bringing to 27 per cent the decline in its value since the start of 2014. That translates into MH shares trading at 0.93 times its book value, almost near its lowest level since 2001.
Meanwhile, the Joint Agency Coordination Centre has rejected the claim by GeoResonance that the debris the Aussie firm detected in the Bay of Bengal is that of MH 370.
In a statement, the JACC said, "The location of MH370 suggested by the GeoResonance report (in the Bay of Bengal) is not in the Australian search and rescue zone."
It added, "The Australian-led search is relying on information from satellite and other data to determine the missing aircraft's location. The location specified by the GeoResonance report is not within the search arc derived from this data."
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