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Air France’s strike hints at bad news for Malaysia Air

Manan Vatsyayana | AFP | Getty Images

Malaysia Airlines can't seem to catch a break, as even Air France's nine-day old strike doesn't appear to be sending many passengers its way.

Air France's pilots walked off the job on September 15, grounding about 60 percent of its flights, including my flight from Paris to Singapore last week, which was canceled barely 15 minutes before boarding.

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The gate agent was confident the flight would leave as scheduled the next day, saying it was only canceled because a pilot had called in sick and the substitute hadn't had enough rest between flights.

But I was skeptical, especially after standing in line for more than an hour with a mother-daughter pair faced with their third canceled flight in two days. An agent at the baggage claim said this was the current strike's first flight canceled at the last minute.

Malaysia Airlines check-in at the Charles de Gaulle Airport in Paris on Sept. 17, 2014
Leslie Shaffer
Malaysia Airlines check-in at the Charles de Gaulle Airport in Paris on Sept. 17, 2014

After Air France had bussed all the unhappy passengers out to hotels at the happiest place in Europe – Euro Disney – I booked a seat on Malaysia Airlines, or MAS. It was cheap – about 550 euros ($706) for a ticket booked less than 12 hours before departure. By comparison, on other airlines, prices for a ticket from Paris to Singapore purchased with a 24-hour lead time range from around 670 euros on Singapore Airlines to more than a thousand euros on British Airways.

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But deciding to overcome qualms about flying the troubled carrier may be less surprising than how few others did the same, with the flight appearing only around 70 percent full.

Ticket prices, the easiest way to judge demand, didn't change much over the weekend, suggesting MAS didn't see a pickup in bookings, said Mohshin Aziz, an analyst at Maybank, noting the carrier doesn't release its booking data.

If MAS has trouble capturing essentially captive passengers, the planned overhaul of Malaysia's flag carrier may struggle out of the starting gate. MAS declined to comment.

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It's not a minor matter for Malaysia. Tourism contributed nearly 16 percent of Malaysia's gross domestic product (GDP) and 14 percent of employment in 2012, according to the World Travel and Tourism Council.

Malaysia had around 25.7 million tourist arrivals in 2013, according to Tourism Malaysia data. MAS carried around 10.8 million international passengers last year.

The more than 70-year-old carrier's reputation was severely damaged after it lost two flights in a span of around four months. Flight MH17 from Amsterdam to Kuala Lumpur was shot out of the sky by a surface-to-air missile in July, while in March, flight MH370 from Kuala Lumpur to Beijing disappeared, in a yet-to-be-solved mystery which captivated the world. There were no survivors from either flight.

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"It's very difficult for them to react with regards to the strike," Aziz said. "Most people – the students, the tourists, the leisure travelers – will just wait it out."

More concerning is that MAS' September bookings are so slim, he said. "September should be a strong month. You expect the flight to be really full," before a leaner period in November, he added.

But perhaps MAS might eventually benefit should the Air France strike continue to drag on.

I mentioned my decision to switch carriers to another stranded Singapore-bound passenger on the early-morning shuttle to the airport. By the time we arrived at Charles de Gaulle airport, Air France had already canceled the flight a second time, and he too rebooked onto MAS.

—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1