The loss-making Malaysia Airlines is to cut 30 percent of its workforce as part of a sweeping restructuring plan that is set to cost 6 billion ringgit (US$1.9 billion), Malaysian state investment firm Khazanah Nasional said.
Malaysia’s flag carrier plans to cut its staff by 6,000 to 14,000 as it takes steps to stem long-running losses worsened by two aircraft disasters this year, Khazanah Nasional said in a statement yesterday.
Investigators continue to scour the southern Indian Ocean for Malaysia Airlines Flight MH370 which veered far of course while en route from Kuala Lumpur to Beijing on March 8 with 239 people on board.
Last month, 298 people were killed when Flight MH17 was blasted out of the sky as it flew over an area of eastern Ukraine controlled by pro-Russian separatists.
Malaysia Airlines would be delisted from the Bursa Malaysia stock exchange by the end of this year, Khazanah said, adding that it aims to return the carrier to profitability within three years of the delisting.
“Recent tragic events and ongoing difficulties at MAS have created a perfect storm that is allowing this restructuring to take place,” Khazanah managing director Azman Mokhtar told reporters in Kuala Lumpur.
“We believe that the 6 billion is not a bailout, we believe it will be recovered with relisting,” he said.
Khazanah said in the statement that it plans to relist the carrier three to five years from now.
Chief executive officer Ahmad Jauhari Yahya is to stay on until July of next year, Khazanah said, adding that the search for a new chief executive officer has begun.
On Thursday, Malaysia Airlines said its second-quarter net loss widened to 307 million ringgit from the 176 million ringgit posted during the same period a year earlier, though the result was an improvement from the net loss of 443 million ringgit seen in the first quarter.
The carrier warned of poor second-half earnings as passenger bookings continue to fall.
Malaysia Airlines has posted three cosecutive years of losses in the face of competition from rising budget airlines like AirAsia Bhd.
Khazanah, which currently has a 69 percent stake in the carrier, has injected more than 5 billion ringgit into Malaysia Airlines over the past 10 years.
Khazanah said it plans to reduce the net gearing of the airline through debt-for-equity swaps.
It also plans to review all supply contracts while focusing on the carrier’s regional flight network and improving revenue yields.
Malaysia Airlines would retain global flight connectivity through the Oneworld alliance and code-sharing, Khazanah said.
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