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Old 23rd Nov 2013, 23:34
  #130 (permalink)  
ShinjukuHustler
 
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Very rare to find any airline with bottomless pockets these days, there's almost always an extremely adverse reaction to deep losses.

At some point, if the airline doesn't stabilise, Malindo's benefactors will eventually get tired of pumping cash into the venture; it's the same old scenario that befalls many an ill-conceived or poorly run airline start-up venture. The forecasts on market strength are incorrect or exaggerated, the returns are not as fat or the losses as small as predicted and then the begging bowl comes out for a cash injection to keep the venture afloat.

Eventually you reach the point where the money pumped to keep it alive exceeds a decades worth of profits and shareholders start to regret ever getting involved. The baby airline becomes a drain on it's profitable older sibling and so talks of spinning it off to stand on its own begin to grow.

By the time you've got to this point they go through various management shuffles incl the CEO and other exec level types. The smart ones, if there are any, get out early, maybe go to a competitor and spill the beans on what life is really like around the boardroom table.

I could be completely wrong in applying this scenario to Lion Air's 'Malaysian Invasion' but I won't be surprised at all if I'm right.
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