Malaysia Airlines to cut 6,000 in radical overhaul
Malaysia Airlines will slash nearly a third of its 20,000-strong workforce and cut back its global route network as part of a radical 6 billion ringgit ($1.9 billion) restructuring following the devastating impact of back-to-back jetliner disasters.
The 42-year-old company will be delisted by the end of the year under the broad revival plan announced by state fund Khazanah Nasional on Friday that aims to bring greater efficiency and global standards to the troubled carrier.
The 6,000-job cut was higher than expected by the industry and marks a painful new blow for the airline's staff after a traumatic year. Khazanah, which owns a majority stake in MAS, said it would invest in "re-skilling" those who lose their jobs and pledged to set up a panel to improve the often rocky relations between unions and management.
"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 re-listing," he said.
Khazanah, which currently holds a 69 percent stake in the airline, will take 100 percent ownership when the carrier is delisted. The state fund said this month that it would pay 1.4 billion ringgit to buy out minority shareholders.
Under the restructuring plan, which was approved by Malaysia's cabinet this week, the airlines' assets and liabilities will be transferred to a new company with Khazanah injecting up to 6 billion ringgit.
Khazanah aims to return MAS to profit by 2017 and re-list the airline within five years, by which time it would be more regionally focused, "with lower cost structure and greater emphasis on revenue yield management," the state fund said in a statement.
An international search for a new chief executive is under way, Khazanah said. The current CEO, Ahmad Jauhari Yahya, will stay on until July of next year.
Khazanah, which has injected more than 5 billion ringgit into the airline over the past 10 years, said its new money injections would be strictly tied to the new company meeting performance targets.
(China Daily 08/30/2014 page11)
