Malaysia Airlines to cut 6,000 jobs as part $1.9-bn overhaul

30 Aug 2014

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Malaysia Airlines will cut 6,000 jobs as part of a $1.9-billion overhaul announced yesterday to revive its damaged brand after being hit by double passenger jet disasters, the Los Angeles Times reported.

The staff reduction works out to 30 per cent of the airline's current workforce of 20,000. Also, a search is ongoing for a new chief executive, but there was no move to change the airline's name, which, according to some branding experts was necessary for a successful makeover.

Khazanah Nasional, the state investment company, which 69-per cent owner of the airline, said the overhaul included the establishment of a new company that would take over the existing Malaysia Airlines business and its reduced staff.

The revamp and new investment in the carrier would cost about $1.9 billion. According to analysts the substantial staff cuts suggested that the airline would cut flights to Europe and China.

The report quoted Azman Mokhtar, managing director of Khazanah Nasional as saying the twin disasters and ongoing financial woes "created a perfect storm for the restructuring to take place," said. He said the carrier needed to have a fresh start.

He added, the plan aimed to "strike a balance between Malaysia's desire to revive a national carrier against the prudent use of public funds.''

According to Mokhtar, however, there were no plans to change the carrier's name, deeply tarred by its association with the MH370 and MH17 tragedies, that had hit bookings, Daily Express reported.

Mokhtar said, the combination of measures announced today would enable the national airline to be revived.

According to aviation analysts, it was far too early to predict success and pointed to a lack of details in the plans, intense industry competition and the sullied image of the carrier.

The carrier had been awash in the red for years, with analysts blaming poor management and a failure to keep up with industry competition.

According to a statement from the airline, its flights would operate as normal during the restructuring.

Ismail Nasaruddin, head of Malaysia's flight attendants union, said the numbers involved were high, adding, a lot of frustration was in the air.

MAS also plans to "rationalise" its flight network - a term it had used earlier for cutting unprofitable routes - to become a "principally regionally focused" carrier, Mokhtar said, giving no further details.

Though a new CEO would be chosen by end-2014, current under-fire boss Ahmad Jauhari Yahya would continue to be in charge until July 2015 to ensure a smooth transition.

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