Missing Flight Drives Malaysia Airlines Big Loss

Malaysia Airlines reported quarterly results Thursday morning, and the already struggling company’s troubles are getting worse. The airline posted a net loss of $137.8 million for the quarter, up from a net loss of $86.4 million in the same period last year. Revenue rose 1.7% to $1.1 billion.

The airlines said that the loss of Flight 370 puts “additional stress on the group which had already prepared itself for a challenging year.” The company was hampered by high fuel and operations costs and an unfavorable currency exchange rate.

Sales in China fell 60% in March, according to a report in The Wall Street Journal. Flight 370 disappeared after leaving Kuala Lumpur on March 8 on its way to Beijing. The plane, a 777-200ER from Boeing Co. (NYSE: BA), is an older model of a two-engine widebody family that can carry up to 440 passengers in certain configurations. Malaysia Airlines owns 15 of the planes. What liability, if any, Boeing might face if the plane or either of its flight recorders is recovered is unknown.

In its report Thursday morning, Malaysia Airlines said that it will be continue reviewing of its business model and plans. Whatever the outcome of the search for the missing plane, there is little doubt that all aboard perished and the airline’s liability for that could drive it out of business.

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