The newly appointed chief executive officer of loss-making Malaysia Airlines yesterday said that the carrier is “technically bankrupt,” as he announced plans for a restructuring that is to cut the company’s workforce by one-third.
“We are technically bankrupt... The decline of performance started long before the tragic events of 2014,” CEO Christoph Mueller told a news conference.
Already squeezed into years of losses by stiff regional competition, the carrier was seriously affected last year by the loss of two jets in separate disasters.
Mueller was making his first public appearance as CEO since being hired last month by the carrier’s owner, Malaysian state-run investment company Khazanah Nasional Bhd, to lead the restructuring.
The airline confirmed previously disclosed plans to cut 6,000 jobs, shrinking its workforce to 14,000.
RESTRUCTURING
The bullet-point blueprint, released by e-mail, marks the first concrete move by Mueller, a German national who had previously initiated turnarounds at Ireland’s Aer Lingus Group PLC and Belgium’s Sabena that earned him the nickname “The Terminator” for his job-slashing.
However, the move was expected — Khazanah last year said that about 6,000 jobs would be lost.
Under Mueller, 52, the carrier plans to reinvent itself, beginning on Sept. 1, with a new brand and expected new livery as he seeks to repair the damage to the airline’s image suffered last year.
In March last year, Malaysia Airlines Flight MH370 disappeared with 239 passengers and crew aboard and remains missing. Four months later, Malaysia Airlines Flight MH17 was blown out of the sky by a suspected ground-to-air missile over Ukraine.
Monday’s announcement said the airline planned to “stop the bleeding” this year, stabilize next year and seek to start growing again by 2017.
It would focus immediately on tasks such as rationalizing its headcount and route systems.
ROUTE CUTS
Beside job cuts, the flag carrier is widely expected to pull back drastically from unprofitable long-haul routes such as to Europe, and focus instead on regional traffic as it regroups.
The blueprint called for the renegotiating or resetting of major contracts, and a major revitalization of technology, training and business operations.
Additional reporting by AFP
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