Malaysia Airlines Losing $1.6 Million Daily

In the wake of two tragedies, Malaysia Airlines is reported to be losing millions every day as a result of declining passenger counts.

Malaysia Airlines is burning through its cash reserves at nearly $2.16 million each day, according to Howard University professor Oliver McGee. “Operations are losing about $1.6 million a day,” he wrote in an article on LinkedIn.

According to a report posted on Mashable, Malaysia Airlines “was operating in the red for about five years before either of this year’s tragedies” and now faces “dire economic straits.”

The aforementioned tragedies include Malaysia Airlines Flight 370, which disappeared in March with 239 onboard, and Malaysia Airlines Flight 17, which was shot down over eastern Ukraine in July with 298 onboard.

In an effort to boost ticket sales, the airline has increased commission it pays to travel agents in Australia from 6 percent to 11 percent, according to reports from News.com.au.

The airline has also deeply discounted its fares. Mashable cited a search on Malaysia Airlines’ website that revealed a round-trip fare of $238 between Kuala Lumpur and Beijing, “while a similar flight on other carriers was listed for more than $500.”

On another front, Malaysia Airlines is attempting to rebrand itself. Malaysia’s state investment company, Khazanah Nasional Berhard, owns 69 percent of the airline. Earlier this month, the company announced it would buyout the remaining stock and overhaul the airline.

Correction: The flight number of the missing Malaysia Airlines plane is 370. An earlier version stated it was 350.

[Photo: iStock]