Amsterdam (TheStreet) -- Star-crossed Malaysia Airlines suffered its second fatal accident in five months, apparently because it flew into dangerous air space where flying had not been banned, even though the Federal Aviation Administration warned against flying in nearby Crimea two months earlier.
Malaysia Flight 17 from Amsterdam to Kuala Lumpur in Malaysia was apparently shot down in eastern Ukraine near the Russian border, killing all 295 people aboard. Ukrainian President Petro Poroshenko blamed a "terrorist act." Both the Ukrainian government and pro-Russian rebels in the area denied involvement.
Within hours after the crash, at least three European airlines said they had ceased flying over the area.
Boeing 747 Fades Out But Lufthansa Flies a Fresh One to JFK
Five Worst U.S. Airlines of All Time
United Should Close Dulles Hub, Analyst Says, as He Cuts Rating
On May 3, the Federal Aviation Administration issued a notice to airmen prohibiting flight operations in Ukrainian airspace "over the Crimean Peninsula and the associated Ukrainian territorial sea, as well as international airspace managed by Ukraine over the Black Sea and the Sea of Azov."The area is scores of miles from the area where Flight 17 was shot down. The FAA notice prohibited flying by U.S. airlines, U.S. commercial operations and, with narrow exceptions, pilots certified in the U.S.
The FAA notice was issued not because of a terrorist threat, but rather because of "the potential for civil aircraft to receive confusing and conflicting air traffic control instructions from both Ukrainian and Russian (air traffic control) providers." The dispute meant that flying in the region "is unsafe and presents a potential hazard to civil flight operations in the disputed airspace," the FAA said. Malaysia is a member of the Oneworld alliance, which includes American (AAL - Get Report), but American did not codeshare on Flight 17 and had no code-share passengers on the flight, a spokesman said. The primary codeshare partner on the flight was KLM, a member of the Skyteam alliance.
"It is with great regret that KLM has learnt about the accident with flight MH17, codeshare KL4103, of Malaysia Airlines from Amsterdam to Kuala Lumpur," KLM said Thursday in a prepared statement. "As a precautionary measure KLM avoids flying over the concerned territory." Lufthansa spokesman Nils Haupt said: "Up to now there has been no closure of Ukrainian airspace, (but) Lufthansa has decided to fly a wide detour around east Ukrainian airspace with immediate effect. "The safety of our passengers is our top priority," Haupt said. "A total of four flights are affected today. Presently no restrictions apply to the Lufthansa destinations Kiev and Odessa." Air France also said Thursday that it will avoid Ukrainian airspace, according to reports. "The entire airline industry may have seriously misjudged its decisions to fly over Ukrainian air space," aviation consultant Bob Mann said Thursday. "Given hostilities that seemingly escalate every day, I wonder whether anybody will still be overflying the Ukraine tomorrow." Mann, formerly an executive at Tower Air, noted that Tower, of its own accord, ceased flying over Iran in the mid 1990s. "It cost us 30 minutes of flying time and 6,000 gallons of fuel on each trip from Amsterdam to Delhi or Bombay, but we didn't want to have to divert to Tehran if something happened," he said.
Shares in major U.S. airlines were falling Thursday in mid-afternoon trading. Shares of American were down 99 cents to $42.49. Shares of Delta (DAL - Get Report) were down 98 cents to $36.89. Shares of United (UAL) were down $1.15 to $43.78.
In a note, S&P Capital IQ airline analyst Jim Corridore said that while the stocks are down, "we see little specific impact to U.S. airline stocks. "We expect U.S. airlines to avoid flying to or near Ukraine, but this is a very small part of their overall flying," Corridore wrote. "Should relations between the U.S. and Russia sour further in the aftermath of this news, we still see limited impact on U.S. airlines." Thursday is the anniversary of another crash involving an international flight. TWA Flight 800 crashed into the Atlantic Ocean on July 17, 1996, shortly after taking off from JFK for Rome, with a scheduled stop in Paris. Written by Ted Reed in Charlotte, N.C.
To contact this writer, click here.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts