Malaysian Airlines Flight 17: Air Carrier to Give $5,000 Assistance to Victims’ Families; Bankruptcy Looms as 2 Air Mishaps Would Cost Firm Minimum $80.55 M Compensation
Almost $1.5 million would be deducted from Malaysian Airlines shaky finances as the embattled air carrier announced on Monday that it would grant $5,000 assistance to each of the families of the 298 victims of MH 17.
The amount, according to a Malaysian Airlines statement, is a financial assistance "to ease the immediate families of the passengers with their economic needs." It would not be considered a part of the final compensation or affect the legal rights to claim of the victims' families.
The company said funds have been made available to pay the $5,000 assistance.
With the air tragedies that had hit the embattled air carrier within four months which worsened further the deteriorating financial health of Malaysian Airlines, industry observer are asking if the government-owned airline would be able to survive this time.
Prior to the two air mishaps, the company had been running on deficit for three years and incurred losses of $1.3 billion.
Read: Last Nail on MH: Analyst Says Malaysian Airlines Has Weak Chances of Getting Out of Financial Rut as Tragedy Strikes 2nd Time in 4 Months
CNN Money reported on Monday that Khazanah Nasional, the sovereign wealth fund of Malaysia that holds a 70 per cent stake in Malaysian Airlines is starting to study its options to restructure the company. The restructure plan would be made public within the next 6 to 12 months.
With the company mandated by international law to make initial payments of $150,000 for each families of both flights, that would burn an $80.55 million hole and could lead to Malaysian Airlines filing for bankruptcy, according to Daniel Tsang, an aviation analyst at Aspire Aviation.
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