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Malaysia Airlines To Be Nationalised In Post-MH17 Rescue

08/08/2014 12:28 BST | Updated 08/08/2014 12:59 BST
MANAN VATSYAYANA via Getty Images
A Malaysia Airlines employee sits behind a closed ticket counter at the Kuala Lumpur International Airport in Sepang on July 20, 2014. Malaysia Airlines said it would offer full refunds to customers who want to cancel their tickets in the wake of the MH17 disaster, just months after the carrier suffered another blow when flight MH370 dissapeared. AFP PHOTO/ MANAN VATSYAYANA (Photo credit should read MANAN VATSYAYANA/AFP/Getty Images)

The Malaysian government has stepped in to save Malaysia Airlines, which after the MH17 and MH370 disasters has been losing $2 million (£1.2m) a day.

Malaysia's government-owned investment company, Khazanah Nasional, has unveiled a 1.38 billion Malaysian ringgit (£256m) deal to take full control of the line, expanding on its current 69% stake. The process has seen Malaysia Airlines suspend its shares on the Kuala Lumpur stock exchange,

In the first step towards a "complete overhaul" of the carrier, Khazanah Nasional offered to buy the remaining part of Malaysia Airlines at 27 sen (5p) a share, marking a 29% premium on the carrer's average share price over the last three months.

"Nothing less will be required in order to revive our national airline to be profitable as a commercial entity and to serve its function as a critical national development entity," the fund said.

Analysis: Can Malaysia Airlines Survive Another Tragedy?

Some experts expressed scepticism at Khazanah's ability to turn around the ailing airline. Shukor Yusof, an analyst with Malaysia-based aviation consultancy Endau Analytics, told AFP: "I don't take comfort in Khazanah overhauling the sick airline. I am very sceptical about it."

Malaysia AIrlines has been left reeling after suffering two tragedies this year. The MH17 disaster, which resulted in 298 people losing their lives after a jet went down over eastern Ukraine near the Russian border, sent shock-waves through the markets, sending the price of gold - a marker of market volatility - soaring.

"I can't comprehend of anything they can do to save themselves," said Mohshin Aziz, an aviation analyst at Maybank Investment Bank in Kuala Lumpur. "Perception-wise it really hits home, it's very difficult to fight against negative perception."

“In the history of aviation there’s never been an airline that had to go through two huge disasters in the span of four months, so I don’t think there’s any historical evidence that they can get out of this," he told Dow Jones Newswires.

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