Malaysia Airlines is to refund fares for passengers no longer wishing to travel on the carrier, Sky News has confirmed.
Previously booked passengers due to fly up to and including July 25 can seek a refund without incurring any penalty.
The decision comes amid a wave of concern following the downing of MH17 over eastern Ukraine.
It is unclear how many passengers will cancel their flights.
Nevertheless, the refund will further harm the perception of the carrier both for passengers and investors.
Shares in Malaysia Airlines closed down more than 10% on Friday.
The Kuala Lumpur-listed company saw its stock fall more than 17% at one point before easing prior to the market close.
"Perception-wise it really hits home - It's very challenging. It's very difficult to fight against negative perception," Maybank aviation analyst Mohshin Aziz said.
"I can't comprehend of anything they can do to save themselves."
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