Malaysia Airlines had lost RM4.1B before 2014 — it had nothing left to absorb a shock

Malaysia Airlines was already in deep financial trouble before the twin disasters of 2014. The airline had recorded cumulative losses of RM4.1 billion from 2011 to 2013 — RM2.5 billion in 2011 alone — due to rising fuel costs, intense competition from budget carriers, and a bloated cost structure. It was losing money on many of its long-haul routes and struggling against AirAsia on regional ones.

Two disasters followed in five months. Flight MH370 disappeared on 8 March 2014 with 239 people aboard, and Flight MH17 was shot down over eastern Ukraine on 17 July with 298 aboard. Demand fell sharply — bookings from China by 60 percent, overall bookings by about a third — and the second-quarter loss widened 75 percent to RM307 million. An airline with reserves absorbs a demand shock; this one had spent three years without building any.

In August 2014, Khazanah Nasional — Malaysia's sovereign wealth fund and the airline's majority shareholder — announced it would take the airline private. It spent RM1.38 billion (US$431 million) to buy out minority shareholders. In January 2015, the airline was declared technically bankrupt. A new entity, Malaysia Airlines Berhad (MAB), took over operations on 1 September 2015 with a clean balance sheet, 6,000 fewer employees (a 30% workforce reduction), and a route network focused on regional routes rather than unprofitable long-haul destinations.

The restructuring worked — slowly. By 2022, the airline posted a net profit of RM1.15 billion in the fourth quarter, reducing its annual loss to RM344 million. In 2023 it achieved a full-year net profit of RM766 million. However, the recovery remained fragile: in 2024, staff attrition and supply chain issues forced the airline to cut 18% of scheduled flights. Malaysia Airlines had survived, but the restructuring took nearly a decade and required the government to absorb billions in losses.