Malaysia Air on rebound as missing flight search called off

Malaysia Airlines' new CEO Peter Bellew speaks during a luncheon in Hong Kong, Tuesday, Jan. 17, 2017. Nearly three years after twin disasters took it to the brink of financial collapse, Bellew said an overhaul aimed at turning the ailing carrier around is going better than expected. (AP Photo/Vincent Yu)
FILE - In this March 31, 2014 file photo, the shadow of a Royal New Zealand Air Force P3 Orion is seen on low level cloud while the aircraft searches for missing Malaysia Airlines Flight MH370 in the southern Indian Ocean, near the coast of Western Australia. After nearly three years, the hunt for Malaysia Airlines Flight 370 ended in futility and frustration on Tuesday, Jan. 17, 2017, as crews completed their deep-sea search of a desolate stretch of the Indian Ocean without finding a single trace of the plane. (AP Photo/Rob Griffith, File)
Malaysia Airlines' new CEO Peter Bellew gestures during a luncheon in Hong Kong, Tuesday, Jan. 17, 2017. Nearly three years after twin disasters took it to the brink of financial collapse, Bellew said an overhaul aimed at turning the ailing carrier around is going better than expected. (AP Photo/Vincent Yu)

HONG KONG — Nearly three years after twin disasters took it to the brink of financial collapse, Malaysia Airlines' new CEO says the airline's recovery is going better than expected.

The search for the airline's Flight 370 that went missing in March 2014 with 239 people on board was suspended Tuesday.

Speaking before the search was called off, CEO Peter Bellew called the disaster an "awful tragedy."

"There's people I work with every day who lost some of their friends, so they're living with that," he said when asked about it Tuesday. "We owe it to the people that lost their lives and the families and everything to make sure that the place is a success and that it survives, because that's the right thing to do," Bellew said when asked about the disaster at an industry gathering in Hong Kong.

Bellew did not mention the Flight 370 disaster or the loss of another Boeing 777 carrying 298 people that was shot down over Ukraine months later in his speech to the group.

He said the airline is on track to meet key performance goals, including turning an annual profit by 2018 and relisting on the stock exchange the following year.

The company's jets are carrying more passengers, including on its London route, he said. London is the carrier's last remaining long-haul route and the only one where it uses superjumbo Airbus A380 jets that must carry many passengers to be profitable.

The tragedies in 2014 deepened the carrier's already daunting troubles.

An unsustainable network of routes, high operating costs and archaic online systems were symptoms of chronic mismanagement that had saddled the airline with at least $1.7 billion in losses since 2011.

Bellew's predecessor Cristoph Mueller, who left the job unexpectedly early in June, described the airline as a "ship that has many leaks."

Updates on the finances of the airline are scant: it was delisted from the stock exchange in 2014 and radically restructured with 6 billion ringgit ($1.5 billion) in government support.

But lower jet fuel prices have since helped cut costs, and revenue has improved thanks to strong traffic growth in the region.

Bellew said an old fashioned sales and marketing blitz helped bring back customers. So did revamping inflight menus and bringing in lie-flat business class seats for the A380s.

"Tremendous result, tremendous improvement for us," he said. "Our planes are so full at the moment that our own staff are not able to use their standby tickets."

The airline's load factor, an indicator of how many seats are sold, averaged 82 percent in the most recent quarter and rose to 90 percent in December, Bellew said. Airlines with a load factor higher than 80 percent are generally profitable, analysts say.

Just over a year ago the airline was operating 737s with five and 10 passengers on board. In late 2015, its A380s, which can carry nearly 400 passengers, were flying to London with just 50 to 60, he said.

Bellew said the airline's lucrative business class bookings for the next six months were double those of a year earlier. He attributed the improvement to having apologized for the typical airline practice of putting cheaper fares on its company website instead of giving them to agents.

"I personally apologized. I'm sure they thought I was nuts," he said.

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