August 30, 2014 09:02
Malaysia Airlines, the country's money-losing carrier, will cut thousands of jobs, trim routes and replace its CEO under plans to return the company to profitability within three years.
State investment fund Khazanah Nasional, which has a 69 percent stake in the airline, announced Friday it plans to pump $1.9 billion into the failing company and de-list it from the Kuala Lumpur stock exchange by the end of the year. Khazanah said it hopes to re-list Malaysia Airlines in three to five years and take full ownership.
In the meantime, the airline plans to cut 6,000 jobs, or 30 percent of its staff, to help lessen its monetary losses.
The job cuts were deeper than the industry had anticipated. Khazanah, the airline's majority owner, said it would invest in worker retraining, Reuters reported. It also promised to establish a panel to smooth tensions between unions and management.
Malaysia Airlines has long been losing money, but the carrier has seen an increasingly steady decline in passenger bookings since two recent disasters. Flight MH370 mysteriously disappeared in the Indian Ocean on March 8 with 230 people on board, and 298 people were killed July 18 when Flight MH17 was shot down over eastern Ukraine.
"Recent tragic events and ongoing difficulties at MAS have created a perfect storm that is allowing this restructuring to take place," Khazanah's managing director, Azman Mokhtarm, told reporters in Kuala Lumpur.
Mokhtarm said a search had begun for a new chief executive to replace Ahmad Jauhari Yahya, who'll stay on until next July, Reuters reported.
Khazanah did not indicate how it would trim the carrier's flights.
The airline has struggled since the late 1990s after expanding its routes, and it hasn't recorded a profit since 2010.
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