MH370: Malaysia Airlines to 'stop the bleeding' in finances

Jun 1, 2015

After disasters of flights MH370 and MH17, airline is declared 'technically bankrupt' by new boss

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MANAN VATSYAYANA/AFP/Getty Images

Malaysia Airlines is planning a major restructure and rebrand following the losses of flights MH370 and MH17.

The company's new boss Christoph Mueller described the airline as "technically bankrupt" and said that 6,000 jobs – almost a third of the workforce – will be cut ahead of a rebrand in September.

All 20,000 members of staff have been sent termination notices, but at least 14,000 will be offered their jobs back at the "newly minted Malaysia Airlines Berhad", says the Financial Times.

According to a company statement, the cuts are part of a plan to "stop the bleeding" in finances in 2015, to stabilise in 2016 and to start growing again by 2017.

It comes 14 months after flight MH370 and its 239 passengers and crew disappeared en route from Kuala Lumpur to Beijing on 8 March 2014. Four months later Malaysia Airlines flight MH17 crashed in rebel-held territory of eastern Ukraine on 17 July, killing all 298 people on board. Western governments have accused pro-Russian rebels of shooting down the Boeing 777.

Reeling from the twin aviation disasters, Malaysia Airlines was taken back under full government ownership last year and even made the unprecedented offer of full refunds to any passengers who were booked to travel in 2014.

Mueller, who spent five years reviving Aer Lingus, was brought in as chief executive last month and has insisted that operations will continue as normal during the restructure.

Passengers can continue to make reservations "in full confidence" that flights and schedules are operating as normal, that tickets sold will be honoured, he said.

Mueller added that the decline in financial performance started long before the "tragic events" of 2014, with the company failing to turn a profit for several years.

In a message to staff last month, he reportedly warned that a major overhaul was needed because of the airline's "uncompetitive cost levels", which were said to be 20 per cent higher than its competitors.

 

MH370 search team faces criticism from marine experts

29 May

Underwater search experts have raised concerns about the efforts to find Malaysia Airlines flight MH370, the most expensive recovery mission in aviation history.

About $60m is believed to have been spent on the operation so far, but 14 months after it disappeared there is still no trace of the plane nor its 239 passengers and crew.

Malaysia and Australia, which is leading the search for MH370, have split the cost, with both countries committed to a further $50m towards to the search and recovery should it be found.

Paul-Henry Nargeolet, a former French naval officer who helped co-ordinate the search for and recovery of Air France Flight AF447 in 2009, has claimed that Fugro, the Dutch company at the forefront of the mission, lacks experience.

"Fugro is a big company but they don't have any experience in this kind of search and it's really a very specialised job," he said. "This is a big job. I'm not an Australian taxpayer, but if I was, I would be very mad to see money being spent like that."

Fugro currently has two vessels searching the southern Indian Ocean for the plane. Meanwhile, a third search vessel, Go Phoenix, which is said to be using the world's best deep-sea search equipment, is due to pull out of the search within weeks.

Other experts, speaking on the condition of anonymity, told Reuters that Fugro's sonar equipment is better suited to flat surfaces than the rugged underwater terrain that lies beneath the Indian Ocean.

Senior representatives of Williamson & Associates, a US firm rejected for the MH370 contract, also raised concerns that the current search operation may not be able to demonstrate convincingly that 100 per cent of the sea floor is being examined.

Rob McCallum, a vice-president at the firm, said: "It makes no sense to be using fine scale tools to cover a massive area; it is like mowing an entire wheat field with a household lawnmower."

Fugro has rejected claims that it is using inappropriate equipment, pointing to its success in a test range off the West Australian coast and its recent discovery of an uncharted shipwreck earlier this year.

 

MH370 fraudster faces jail and lashes: 5 other disaster scams

21 May

A Malaysian man who stole more than £1,300 from the account of a missing MH370 passenger has been sentenced to four years in prison and three lashes of the cane.

Basheer Ahmad Maula Sahul Hameed, a 34-year-old mechanic, was convicted in April for withdrawing the cash from the account of Chinese victim Tian Jun Wei months after the plane disappeared.

Hameed's wife Nur Shila Kanan, a bank officer for HSBC, was also convicted for making illegal transfers and withdrawals of more than £15,000, using forged documents, cheating the bank supervisor and stealing money. A warrant was issued for her arrest after she failed to turn up to hear her sentence due to apparent sickness, reports The Star.

During the trial, the court heard that money had been transferred from three other Chinese and Malaysian victims into Tian's account before it was partly removed through ATM withdrawals at different locations across Kuala Lumpur. The judge said the couple's actions had "brought further pain to the families, who were already grieving over the loss of their loved ones".

Hameed and Kanan are not the first to exploit a tragedy to line their pockets:

False Katrina claim

Hurricane Katrina was one of the most devastating hurricanes in the history of the United States, killing around 1,000 people in Louisiana and 200 in Mississippi when it struck in 2005. Among the people to file claims with the Federal Emergency Management Agency was a woman who asked for help to repair damage to her home in New Orleans, as well as medical and dental expenses. She also claimed her scooter had been stolen while she was taking shelter in the Superdrome, reported The Seattle Times. However, when it emerged that she was living in Washington State and had never been to Louisiana she was sentenced to 18 months in prison for fraud.

7/7 police fraud

After the 7 July 2005 suicide bombings in London, the Metropolitan Police sent two teams of officers up to Leeds as part of its investigation and paid for their accommodation. Four years later one of the officers, Det Con Daren Pooley, found himself in court on suspicion of making  a "quick profit" out of the force, reported the BBC. Through a third party, he managed to charge the Met Police a monthly rent of £1,950 when the actual rent for the flats was £650. He was jailed for three years for fraud.

Haiti earthquake scam

Following the Haiti earthquake that killed more than 160,000 people and displaced close to 1.5 million people in 2010, one con artist attempted to pass himself off as a United Nations rep to run a Haitian earthquake relief scam. Marc Payen, from Manhattan, used fake UN stationery to pocket funds intended to go towards medical and humanitarian efforts. He was convicted of two counts of grand larceny, forgery and criminal possession of a forged instrument and sentenced to serve between five and ten years in prison and to pay $17,179.05 in restitution, reported the New York Post.

Sandy Hook 'donations'

Just one week after the Sandy Hook Elementary School shooting, a woman in New York began collecting donations online by posing as the aunt of one six-year-old victim. "We've set up a funeral fund for my brother," claimed Nouel Alba. "Anyone willing to make a donation can make one." After being exposed on US television she was arrested by the FBI and sent to prison for eight months for wire fraud and making false statements to the government, reported Today. The victim's real uncle described it as "disgusting behaviour".

MH17 Facebook profiles

After Malaysia Airlines flight MH17 crashed in eastern Ukraine, online scammers immediately got to work on setting up fake Facebook pages using the names of victims. Each linked to a blog site full of pop-up adverts for online gambling and get-rich quick schemes, which served as distribution points for malware designed to hijack computers and steal personal information. At least three of the fake pages were set up in the names of young Australian children who were killed, reported the Canberra Times. Experts told the newspaper that such click-fraud schemes are now common in the wake of major events or disasters. While Facebook was quick to take them down, stopping the scams altogether would prove a much more challenging task.

 

Flight MH370: what will happen if the missing plane is found?

13 May

With poor weather conditions hampering the search for Malaysia Airlines flight MH370, speculation has turned to what might happen if the plane is ever discovered.

More than 75 per cent of the original search zone in the southern Indian Ocean has been explored with no sign of the aircraft or any of the 239 people believed to have perished on board.

Investigators have now doubled the search zone to 120,000 sq km, but they have had to suspend the regular use of their autonomous underwater vehicles (AUV) for the winter months.

This week, the Australian government announced that it had set aside an additional A$50m (£25m) to help cover the costs of the ongoing search for the missing plane. "The cost of this measure will be offset by financial contributions to the search from other countries," said the Australian Transport Safety Bureau, which is coordinating the search. "The actual cost will depend on a number of factors, including the length of the search."

The discovery of a previously uncharted shipwreck has boosted confidence among officials that they will find the plane if it is resting in the search area.

The team spotted "multiple small bright reflections in a relatively small area of otherwise featureless seabed" at a depth of 3,900m. Further investigation using a high-resolution sonar scan found numerous items the size of cricket balls interspersed with a few larger items, the biggest of which was box shaped and around six metres in length. Analysis revealed this week that the debris was likely to be the wreck of a ship.

ATSB's Peter Foley, director of the operational search for MH370, described it as a "fascinating find" but said it was "not what we're looking for". However, he said the discovery "demonstrated that the systems, people and the equipment involved in the search are working well".

He added: "It's shown that if there's a debris field in the search area, we'll find it."

So what would happen next if they do?

One aviation expert has warned that the plane might have to be left on the ocean floor if it is found. Neil Hansford, who has more than 30 years of experience in the airline industry, told the Daily Express that the plane could be inaccessible if it is found in a deep abyss.

Last month, senior ministers from Malaysia, Australia and China met to discuss the next steps in the search and to agree the recovery arrangements if it is found.

Ministers said it was "critical" to have arrangements in place to enable a timely and effective response and said that they remained "committed to bring closure and some peace to the families and loved ones of those on board".

In the event that the aircraft is "found and accessible", evidence would be secured for investigation in accordance with Annex 13 to the Chicago Convention, they said.

This document provides the international requirements for aircraft accident investigations, they include studying the flight recorders and carrying out autopsies with the objective of preventing other disasters in the future.

Aviation law experts have said that Malaysia would likely retain authority of the investigation as it is the "State of Registry" of the aircraft, although the Malaysian government could delegate the inquiry to Australia, as it has done with the search.

"States whose citizens have suffered fatalities in an accident are also entitled to appoint an expert to participate in the investigation," according to the document.

The bulk of Air France flight 447, which crashed in stormy weather en route to Paris from Brazil in 2009, was not found until two years later. While parts of the wreckage and two bodies were found within days, the flight recorders did not turn up until 2011 and the search eventually ended with 74 bodies still missing.

The extensive search of the Atlantic was jointly financed by Air France and Airbus. After four unsuccessful search missions, the wreckage was eventually found just 6.5 nautical miles from the aeroplane's last known location. Deep sea divers only retrieved parts of the aircraft that "were useful to the investigation," leaving the rest of the wreckage on the seabed, according to the final report. The data and cockpit recorders were also recovered, providing crucial evidence about the aircraft's final moments, though some aviation experts still dispute what happened to the plane. 

 

MH370 officials throw cold water on Bay of Bengal theory

29 April

Australian officials co-ordinating the search for MH370 have cast doubt on a theory that the missing plane is in the Bay of Bengal.

Andre Milne, who reportedly works in military aviation technology, has been trying to crowdsource £1.3m to pay for his own investigation, claiming that the Boeing 777 has come to rest in the waters between Malaysia and India.

In a video appeal for funding, he says a wreckage currently lying in the Bay of Bengal needs to be investigated to rule out whether or not it is flight MH370.

He points to witnesses in the Maldives who claimed to have seen a Boeing 777 flying south past the islands before circling back over the lower Bay of Bengal on the night MH370 disappeared in March 2014. He has written to Australian Prime Minister Tony Abbott to put forward his hypothesis.

But the Australian Transport Safety Bureau (ATSB) has said that any theories suggesting the aircraft was located to the north or significantly west of Sumatra "were not supported by known facts or careful analysis".

The bureau stopped short of cautioning against public donations to Milne, but told News Corp Australia that "the aircraft cannot be in Kazakhstan, Diego Garcia, the Maldives or indeed the Bay of Bengal".

ATSB Commissioner Martin Dolan said last week that the satellite handshakes leading searchers to the southern Indian Ocean were the most "solid piece of information" they had.

No trace of the plane has been found since it disappeared on its way from Kuala Lumpur to Beijing with 239 people on board.

But Dolan said this does not mean it landed anywhere other than the Indian Ocean.

"The likelihood of there being a lot of floating wreckage isn't high, and some of the possible floating wreckage would have become waterlogged by now, and the rest of it is likely to be mixed up with a whole lot of other stuff in one of those big gyres in the middle of the Indian Ocean," he said.

        

More about Flight MH370:

MH370 shot down by US, says former airline CEO Details of who was on MH370 are being withheld, says airline chiefMH370: Indian Ocean crash theory in doubtFlight MH370: official report claims plane 'spiralled' into seaGhost flight theory 'most likely' explanationPilot had rehearsed landing on island runwayMystery cargo continues to raise questionsRelatives to offer $3m reward for informationBook claims missing plane was shot downFlight MH370: flight path suggests plane went 'rogue'Former PM accuses Malaysia of cover-up Plane 'has crashed with no survivors' Pilot of missing plane deleted simulator data'Deliberate action' diverted Malaysian airlinerPhantom phone calls cause upset for families  

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