Malaysia Airlines will cut almost a third of its 20,000-person workforce and cut back its global route network as part of a radical $1.9-billion US restructuring after two devastating jetliner disasters.
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The 42-year-old company will be delisted from the stock market by the end of the year under the broad revival plan announced Friday. The plan aims to make the airline more efficient and to raise its services to global standards.
"Estimation of a workforce of approximately 14,000 represents a net reduction of 6,000, or a net reduction of 30 per cent from approximately 20,000 current staff in total," said Azman Mokhtar, managing director of the Malaysian government's investment fund, which owns a majority stake in the airline.
The 6,000 job cuts were more than expected by the industry and mark a painful new blow for staff after a traumatic year for the national flag-carrier and the Southeast Asian country.
The national investment fund, Khazanah Nasional, currently holds a 69 per cent stake in the airline, and said it would invest in "reskilling" those who lose their jobs. It pledged to set up a panel to improve often rocky relations between unions and management.
Khazanah will take 100 per cent ownership when the carrier is delisted and said that it would buy out minority shareholders.
"The assignment and the object of this exercise is to support the revival of the national carrier but not at any cost; this is the key actually," Mokhtar said.
Under the restructuring plan, which was approved by Malaysia's cabinet this week, the airline's assets and liabilities will be transferred to a new company with Khazanah injecting up to $1.9 billion US.
To relist within 5 years
Khazanah aims to return Malaysian Airlines to profit by 2017, and relist the company within five years, by which time it would be a more regionally focused airline "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 was underway, Khazanah said, and the current one, Ahmad Jauhari Yahya, would stay on until July next year.
Khazanah said its new fund injections would be strictly tied to the new company meeting performance targets.
The state fund did not give details on plans to reduce the carrier's flight network, but said several of its European destinations would be reviewed. Malaysia Airlines will retain global flight connectivity through the Oneworld alliance and code-sharing, Khazanah said.