By Chan Quan Min
The national airline was not wrong to fly over conflict zones in Eastern Ukraine because access to surface-to-air missiles with the capability to bring down commercial aircraft is typically restricted to major military powers only, an aviation analyst said today.
“Commercial airlines have often flown through areas of conflict with no problems. As we speak, airlines are flying over Syria, Iraq and Afghanistan, to name a few,” Mohshin Aziz of Maybank Research clarified in an email to bank clients today.
“The reason why airlines are coy about it is because not anybody can have access to surface-to-air missiles that can hit a commercial aircraft at cruising altitude.
“Only militaries have access to such arsenal, and no country wants to shoot down a commercial airliner by mistake,” Mohshin said.
According to Mohshin there have been only two known instances where large commercial aircraft were mistakenly shot down by militaries.
Korean Air Lines flight 007 was shot down by the Soviets in Siberian airspace in 1983 during the height of the Cold War. In 1988, a US missile took down Iran Air flight 655 over Iranian waters in the Persian Gulf.
Maybank’s Mohshin noted that Eurocontrol, the European air traffic management agency, had kept Ukrainian airspace open.
“If it is open, it means it is safe. Who is MAS to contest the European regulatory body in their home turf?
“There was some advisory to avoid due to the Ukraine-Russian conflict but the route remained open,” he acknowledged.
According to news reports, Ukrainian authorities had barred aircraft from flying below 32,000 feet, believed to be the range of all but the most sophisticated weaponry. MH17 was flying 1,000 feet above this limit when it was allegedly shot down.
Disaster exacerbates financial troubles
Malaysia Airlines has been “beyond unlucky,” Mohshin said. “No airline in the history of aviation has had to go through two tragedies in a span of four months.”
“MAS was already looking weak prior to this incident with a cash burn rate of RM5 million a day and we thought it best for Khazanah to privatize it.
“Customer perception is negative, and it will take a very long time to overturn this – if ever! It’s very sad, no words can explain,” he added.
Bursa-listed companies that would be affected from the MH17 disaster include Brahim’s, the in-flight caterer to Malaysia Airlines, and Allianz, the airline’s master insurer. Brahim’s, in particular, depends on Malaysia Airlines for over 70% of its business.
Mohshin however does not believe Malaysia Airports or MAHB to be adversely affected.
“Technically this is more perception than reality. Airlines will continue to fly to Malaysia, and even as MAS restructures, there will be plenty of other airlines that will swallow its passenger list.
“Just think of AirAsia group and the Middle-Eastern based airlines.But nonetheless, this incident has impacted on the sentiment of the sector and we can expect short-term share price weakness on MAHB,” he said.
You must be logged in to post a comment.