Malaysian Airlines Flight 370: Is the Air Carrier Giving Up by Closing Family Assistance Centre on May 7 & Telling Relatives to Go Home & Wait for Compensation?

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By Vittorio Hernandez | May 1, 2014 10:46 PM EST

After more than 50 days of searching the Indian Ocean and not finding any trace of the missing Malaysian Airlines Flight 370, is the embattled air carrier throwing in the towel?

Reuters
A family member of a passenger aboard Malaysia Airlines MH370 shouts at journalists after watching a television broadcast of a news conference, at the Lido hotel in Beijing, March 24, 2014. Relatives of Chinese passengers aboard the missing Malaysia Airlines flight reacted with hysteria on Monday after the Malaysian prime minister announced the jet ended its journey in the remote Southern Indian Ocean. REUTERS/Jason Lee (CHINA - Tags: TRANSPORT DISASTER MEDIA march 24, 2014

That may be the perception the financially hemorrhaging airline could be conveying unwittingly when it announced on Thursday, May 1, that it will shutter the Family Support Centres in different parts of the world on May 7 but will open similar units in Kuala Lumpur and Beijing.

Malaysia Airlines advised the relatives waiting for any more news about their kin aboard the ill-fated Flight 370, which disappeared without any trace on May 8 and continues to be missing, to instead go home and wait for developments. It promised the kin to contact them via phone calls and meetings.

The company also pledged to soon make advanced compensation.

Malaysia Airlines' decision appears to be tied up with the plan by the Australian government which is leading the search to expand the search zone and could result in the operations extending up to 8 months of waiting for results.

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The move is also seen as the air carrier, which had been losing financially three year prior to the March 8 disappearance, way to cut its costs from paying for the centres and the hotel accommodation of the relatives.

Under an international treaty, Malaysian Airlines is liable to pay up to $175,000 per passenger which would mean over $40 million in compensation. In the past 3 years, the airlines reported losses of $1.3 billion, while analysts forecast it would suffer from another $346 million loss by the end of 2016.

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(Photo: Reuters / )
A family member of a passenger aboard Malaysia Airlines MH370 shouts at journalists after watching a television broadcast of a news conference, at the Lido hotel in Beijing, March 24, 2014. Relatives of Chinese passengers aboard the missing Malaysia Airlines flight reacted with hysteria on Monday after the Malaysian prime minister announced the jet ended its journey in the remote Southern Indian Ocean. REUTERS/Jason Lee (CHINA - Tags: TRANSPORT DISASTER MEDIA march 24, 2014
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