Concerns about safety resulting from the tragedy could put even more pressure on Malaysian Airlines to price its tickets aggressively. That could squeeze margins even further, given the company's rigid cost structure. The company did not respond to a phone call seeking comment.
History suggests the stock could remain under pressure for a while. Malaysia-based Maybank points out that Asiana, Air France and Singapore Airlines experienced share price declines of 7 percent to 20 percent in the first month after their respective air accidents.
But while many questions remained unanswered for months or years, investors gradually bid the share prices back up. Within six months, shares of both Air France and Asiana had recovered almost all of their losses. Only Singapore Airlines remained weak, with its shares down nearly 20 percent after six months.
Indeed, Malaysian Airlines has an impressive safety record even after the accident. The last significant mishap involved a small passenger plane nearly 20 years ago.
And demand for air travel through Malaysia is unlikely to wane. Citigroup estimates Malaysia will see 26 million visitors in 2014, thanks to a combination of business and vacation travel. That's well ahead of neighboring Singapore, which will have 17 million visitors, Citigroup estimates.
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While AirAsia has expanded its network of cities across Asia, Malaysian Airlines will continue to offer plenty of routes and times that discount carriers don't have. Business travelers are especially likely to buy last-minute tickets at high prices.
Even if pilot error is deemed to be a factor in the Malaysian Airlines tragedy, it's unclear that passenger demand would be impacted. It took about two years for Air France to recover the "black box" on its plane that crashed off the coast of Brazil. When it became clear that the pilots may have been at fault, there was no meaningful impact on Air France's ticket sales.
Malaysian Airlines shares are somewhat tricky to value, given its lack of profits. But the stock trades at a price-to-book ratio of just 1 time, near its historical low and well below an average of 2.7 times over the last three years. While the investigation is likely to keep watchers nervous for some time, any further decline in the stock price could turn out to be an opportunity for patient investors.
—By CNBC's John Jannarone. Follow him on Twitter