Malaysian state investor Khazanah Nasional, which is examining various options to save the ailing flag-carrier Malaysia Airline System (MAS), may have to accelerate plans to restructure MAS as two aircraft disasters in four months could compound the firm's financial troubles.
Two aircraft crashes within the year is "psychologically damaging" for MAS's reputation, said Arvin Chia Yew Kim, the head of equity capital markets at Malaysia's Affin Investment Bank.
The markets are "quite certain that MAS will be privatised", Arvin told IBTimes UK.
Asian markets woke up to news that a Malaysia Airlines Boeing 777 jet was shot down in the eastern Ukrainian region of Donetsk overnight.
Passengers have kept away from the airline following the unexplained disappearance of flight MH370 earlier in the year.
Privatising the airline, an option reportedly under consideration, could help Khazanah, which owns 69.4% of MAS, restructure it with little interference from the powerful airline union and shareholders.
The Ukraine disaster "definitely will have quite a significant impact on [MAS]...even though MH17 appears to be totally not MAS's fault, there will I'm sure be short-medium term cancellations of flights etc.
"I think Khazanah will have to speed up their plans on restructuring MAS as this disaster will accelerate the decline in business," Arvin said in his email response to queries.
Pursued by IBTimes UK, a Khazanah spokesman, Mohd Asuki Bin Abas, said: "...in the wake of this tragedy, we would like to refrain from commenting for the time being as we'd like to focus our time to support MAS in its emergency efforts."
While news of the jet crash has weighed down on MAS's stock price, which dropped some 18% in Kuala Lumpur in Friday morning trade, the "downside to [the MAS] stock is limited", Arvin said.
"I believe although it's still early in terms of the details as to what really happened to MH17 and depending on the news flow going forward, there may be further weakness [in MAS's stock] in the days ahead."
However, "...most of the negativity has already been priced in and also given the fact that the market is quite certain that MAS will be privatised, there will be a 'floor' to the stock price," Arvin added.
On 3 July, Khazanah, responding to speculation about the privatisation of MAS, said in a statement: "As Khazanah has stated previously, a comprehensive review of restructuring options for MAS is being undertaken and evaluated."
The aviation firm's losses reached £82.2m ($141m, €104m) in the quarter ended 31 March, 2014, almost £30m more than the same period last year and its worst loss since the quarter ended 31 December, 2011.
Passengers in Asia have taken their custom elsewhere following the MH370 event; passenger numbers were down 60% for the airline.