Airline to lay off 6,000 workers
Print Edition
MALAYSIA Airlines will cut 6,000 workers as part of a US$1.9 billion overhaul announced yesterday to revive its damaged brand after being hit by double passenger jet disasters.
The staff reduction represents about 30 percent of its current workforce of 20,000. A search for a new CEO is underway but there is no move to change the airline’s name, which some branding experts had said was necessary for a successful makeover.
Khazanah Nasional, the state investment company that owns 69 percent of the airline, said the overhaul includes the setting up of a new company that will take over the existing Malaysia Airlines business and its reduced staff.
The revamp and new investment in the carrier will cost about 6 billion ringgit (US$1.9 billion). Analysts say the substantial staff cuts suggest the airline will reduce flights to Europe and China.
The twin disasters and ongoing financial woes “created a perfect storm for the restructuring to take place,” said Khazanah Managing Director Azman Mokhtar. “We need to have a fresh start.”
The plan aims to “strike a balance between Malaysia’s desire to revive a national carrier against the prudent use of public funds,” he said.
But Azman said Khazanah’s 6 billion ringgit investment “will not be a bailout.”
The airline will be delisted from the Malaysian stock exchange and taken completely under the wing of the government. Khazanah, which previously said that it plans to take 100 percent ownership, aims to restore Malaysia Airlines to profitability by the end of 2017 and then relist its shares on the stock exchange by the end of 2019.
A substantial revamp has long been on the cards for Malaysia Airlines, which was struggling with chronic financial problems even before it was hit by the double disasters this year.
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