It doesn’t matter what type of airline it is, big or small, continental or international, they will at some point in time encounter bad press. The airline currently going through this state of PR madness is Malaysia Airlines, lost flights; crashed flights and a myriad of tragedy have hurt the brand to no end. Accidental or otherwise, these incidents have brought the once reputable brand to its knees. Subsequently their stock market presence has been called into question, with their stock price currently entering rocky ground. The question investors will be asking themselves is, is buying Malaysia Airlines stock a wise move?
What has brought down Malaysia Airlines isn’t simply mismanagement and lack of public faith; it is a series of tragic incidents. Malaysian Airlines flight MH370 disappeared without trace, after extensive research, it was noted that the plane probably crashed somewhere off the coast of Australia. The media coverage was wide and expansive and gave Malaysia Airlines enough bad publicity that many other companies would have crumbled under. Post-event the company’s share price tumbled, with questions surrounding what occurred seemingly left largely unanswered. This incident alone scared investors away from the brand, but things would soon get worse. Just weeks later Malaysia Airlines would have to face another tragic event, as flight MH17 would crash in Ukraine, causing mass outrage with even more unanswered questions being thrown at the already reeling company. What was the plane doing there? Why did Russia feel the need to attack? What has happened to the crash victims? All valid questions that remain unanswered, but what is for sure is that Malaysia Airlines stock went into free-fall, with many industry experts wondering if this is a knockdown that they can get up from.
Impact on Malaysian Tourism
Depending on which data you choose to analyse, then travel to Malaysia may or may not have been affected by the tragedies. European travel websites have seen a dramatic drop in both search queries and bookings, but the Malaysian government may have better news for Malaysian Airlines stockholders. They believe that there has been little to no impact on travel to the nation. They continue to push for tourism relations with India, to increase the level of tourism they provide to the country. Industry experts at this point are still divided with regards to how much these tragic events will damage tourism to the country, as Malaysia Airlines stock holders will be listening to any new information with bated breath.
It can be argued that Malaysia Airlines stock was on the downturn long before the tragic events of March and July 2014. But, there is no doubt that the events have hit the company hard. Investigations regarding the incidents will more than likely run on for years, with every ounce of new information, positive or negative, swinging the company’s stock value one way or the other. Current stockholders, or those looking to acquire Malaysia Airlines stocks, must brace themselves for turbulent times when it comes to Asia’s second largest airline.
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