Malaysia Airlines 1Q loss widens. Capacity growth to be adjusted, followed by restructuring

Malaysia Airlines (MAS) is adjusting capacity growth rates for the remainder of 2014 and preparing another potential restructuring. The capacity adjustments, which will result in ASK growth of 10% to 12% for 2014 compared with an initial plan for 19% growth, follow the carrier's fifth consecutive quarter of losses.

The MH370 incident has impacted MAS, particularly bookings from China. But the upcoming changes were required regardless and are as much a response to challenging market conditions.

The outlook for the rest of 2014 and beyond is bleak, necessitating a thorough review. As is always the case with MAS restructurings, the outcome will largely hinge on how deep the MAS executive team is allowed by the government to restructure.