KUALA LUMPUR, July 18 — Malaysian Airline System Bhd (MAS) shares tumbled the most in nine weeks after one of its planes was shot down in Ukraine, four months after the disappearance of Flight 370 contributed to the carrier’s biggest loss since 2011.

The stock lost 13 per cent to 19.5 sen as of 9:04 a.m. in Kuala Lumpur, extending this year’s drop to 37 per cent. The benchmark FTSE Bursa Malaysia KLCI Index retreated 0.6 per cent, while Malaysia’s ringgit weakened 0.4 per cent versus the dollar.

MAS Flight 17, carrying 298 passengers and crew, was shot down yesterday over eastern Ukraine in an attack that the government in Kiev blamed on pro-Russian rebels. The carrier, which has lost RM4.57 billion (US$1.4 billion) since the start of 2011, had been speeding up an overhaul of its business after the disappearance of Flight 370 spurred the longest search for a missing plane in modern aviation history.

“This is shocking,” Geoffrey Ng, an adviser for strategic investments at Fortress Capital Asset Management Sdn, which oversees about RM1 billion, said in Kuala Lumpur. “Investors will want to sell first and get more information later. This will raise concerns about the safety culture of airlines in general.”

The Bloomberg World Airlines Index tumbled 2 per cent yesterday amid concern the crash will deter fliers. Delta Air Lines Inc, American Airlines Group Inc and United Continental Holdings retreated more than 3.4 per cent in US trading.

MH370 impact

Ukraine’s state security service said it intercepted phone conversations among militants discussing the missile strike, which knocked Flight 17 from the sky about 30 kilometres (18 miles) from the Russian border. The separatists denied the accusation.

US officials said the weapon probably was a Russian-made model used widely in Eastern Europe. The Boeing Co 777 crashed en route to Kuala Lumpur from Amsterdam in the main battleground of Ukraine’s civil war.

Malaysia Airlines’ major shareholder and sovereign wealth fund, Khazanah Nasional Bhd, said last month it had time to come up with a restructuring plan as the carrier has funds to last about a year.

The Subang Jaya, Malaysia-based company last reported an annual profit in 2010. The carrier missed its target to be profitable last year as rising prices for fuel, maintenance and financing wiped out revenue gains. Analysts project losses through 2016 for the airline, according to data compiled by Bloomberg.

The vanishing of MH370, which carried mostly Chinese passengers, put the carrier under global scrutiny, jeopardising its reputation and prompting boycotts in China. It has also hurt the country as a travel destination, with Chinese tourists cancelling their visits to the Southeast Asian nation, according to Malaysia’s tourism promotion agency. — Bloomberg