Besides financial troubles, air passengers will prefer to select a different airline for their journey as two Malaysia Airlines’ Boeings have been involved in catastrophic incidents in 2014. On 8 March, a Boeing 777 carrying 239 persons, en route from Kuala Lumpur to Beijing, disappeared (presumably crashed in the South China Sea) without leaving any evidence behind, thus becoming one of the most mysterious disasters in the history of aviation. While search operations are still carried out, another Boeing 777 of Malaysia Airlines crashed in the eastern part of Ukraine where geopolitical violence (between Russia and Ukraine) had recently flared up. This Boeing, carrying 298 persons en route from Amsterdam to Kuala Lumpur, is believed to have been hit by an air missile. In both cases, there has not been an indication of wrongdoing on the part of Malaysia Airlines. In fact, the airline is known as a reliable one with well-maintained airplanes.

With these two recent incidents in mind, the airline - the flag carrier airline of Malaysia (state fund Khazanah owns a 70 percent stake in the company) - is in serious trouble. It would not be the first time that an airline collapses after a catastrophic accident. After an aircraft of PanAm was involved in the Lockerbie bombing in 1988, the US airline bankrupted three years later. Another example is the Boeing 747 of Trans World Airlines which was presumably hit by a missile and crashed in 1996. The airline collapsed in 2001.

If air passengers start to ignore Malaysia Airlines then it can face the same destiny, particularly as its financial make-up is already problematic. Malaysia Airlines, established in 1937, has been on the brink of collapse before: in the 1990s as a result of the Asian Financial Crisis and in the 2000s as a result of weak financial management. However, government support kept the airline in the air. In the past decade, the Malaysian government invested about USD $1.3 billion in the company.

In the past years, Malaysia Airlines changed its strategy. Amid fierce competition from low-cost carriers (for example AirAsia), it offered competitive prices to air passengers. However, as the oil price increased, the small profit margin vanished. Also on intercontinental flights, the airline became engaged in a ‘price-war’ due to the emergence of several competitive airlines from the Middle East. As a result, Malaysia Airlines had a debt of USD $3.5 billion in 2013.

Without reorganization (and rebranding), Malaysia Airlines will face serious risks to collapse (unless the Malaysian government continues their generous financial injections). Such reorganization would include changing the airline's focus to the domestic market, reduce flight capacity, as well as the laying off employees.

Investors are awaiting Malaysia Airlines' financial figures for the second quarter. These will inform about the impact of the first Boeing 777 disaster (in March 2014) on the company's financial performance in the second quarter.