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Monday, December 5, 2016

By W.J. Hennigan, Ralph Vartabedian and Don Lee, Los Angeles Times

KUALA LUMPUR, Malaysia — Calm seas returned Wednesday to aid the search for the missing Flight 370, but public protests and the first legal filing on behalf of a passenger hinted at a stormy forecast for Malaysia and its state-supported airline.

Executives of Malaysia Airlines said Tuesday that they would pay at least $5,000 to each of the families of the 227 passengers aboard the Boeing 777 that disappeared March 8, but the gesture appeared to provide little comfort to distraught relatives, about 100 of whom marched to the Malaysian Embassy in Beijing, where some clashed with police.

In the U.S., meanwhile, a law firm representing the father of a 24-year-old Indonesian passenger filed a petition for discovery against Boeing Co. and Malaysia Airlines, a legal move that is a precursor to what the firm said would be a “multimillion-dollar litigation process.”

“The big target would be Boeing because the families could sue in U.S. courts,” said Gary Logan, a Las Vegas attorney who handles aviation accident suits. “The U.S. is the place to be in terms of collecting damages.”

But any legal action against aircraft manufacturer Boeing would depend on finding the cause of the accident.

The company declined to comment. Malaysia Airlines didn’t reply to an inquiry.

The investigation has so far yielded no debris from the presumed crash zone in the southern Indian Ocean, much less any reason for the disappearance, which experts believe was caused by a hijacking, a suicidal crew member or a malfunction.

Malaysia Airlines might be forced to pay as much as $176,000 per passenger under the Montreal Convention of 1999, an international treaty that covers death and injury to passengers. A nearly $40-million payout would deliver a staggering blow to the carrier, which has been suffering financial losses for years.

Malaysia Airlines, a publicly traded company supported by the Malaysian government, lost $360 million last year, while airlines worldwide averaged an operating profit margin of about 4.7 percent, according to industry analysts.

“Malaysia Airlines was one of the biggest loss-making airlines, and that was before one of their aircraft mysteriously disappeared,” said Seth Kaplan, an analyst with Airline Weekly, an industry publication. “There weren’t many airlines — outside of India — that lost more money.”

Malaysian officials sought to allay rising anger in China and widespread doubt at home after they announced this week that an analysis of satellite data made it all but certain the flight had plunged into the south Indian Ocean with no hope for survivors.