Malaysia Airlines has seen its losses grow during the first quarter of 2014 in the wake of its missing flight MH370.

The carrier said it had made a net loss of £82 million for the three months compared to a loss of £51 million during the same period in 2013.

The losses came despite an 18% increase in passenger traffic with fares dragged down by “excess industry capacity” and the company also being affected by a “disadvantageous cost structure” compared to its rivals in the region.

Malaysia Airlines’ group CEO Ahmad Jauhari Yahya said:  “The net loss this first quarter is not unexpected. However, the results were made worse with the impact on air travel in general following the disappearance of MH370. The whole market has reacted by slowing down demand.

“While the search for MH370 continues today more than two months since it disappeared, our group needs to accelerate efforts to improve its revenue stream and better manage our high costs which have increased in line with greater capacity.”

The airline said that “much of the costs” associated with flight MH370, which disappeared on March 8, will be covered by insurance.

Malaysia Airlines added that it had “slowed” operations for several weeks following the disappearance of the Boeing 777 which had been travelling between Kuala Lumpur and Beijing. It also stopped marketing campaigns “out of respect” for the families of passengers onboard the flight.

There has been speculation about the future of the airline in recent weeks but the company insisted it had been able to “maintain a comfortable cash balance position”.

Malaysia Airlines said in a statement earlier this week that it was conducting a “thorough review of the business plan” with “all avenues being explored to ensure the long-term sustainability of the company”.

“We maintain our commitment to remain competitive, to deliver an exceptional quality product and service with safety as our utmost priority, and to provide returns to our shareholders in the long-term,” added Jauhari.

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