Malaysia Airlines To Undergo $1.9 Billion Restructuring, 6000 Employees Shown The Door

To say that Malaysia Airlines is having the worst year since its inception would be an understatement. The national carrier of Malaysia is reeling under the impact of the two major Airline disasters of 2014 – the loss of the MH370 and the downing of flight MH17 by rockets as it flew over a war zone.

To add to the woes of the employees of the company, Malaysia Airlines has now announced that it plans to cut its workforce by approximately 30 percent. Malaysia Airlines, which has an employee strength of 20,000 personnel, will be giving the pink slip to at least 6000 people in the days to come, reports BBC.

Another major change that the beleaguered airline will undergo is to become completely state owned. A new CEO will also be announced in the days to come. As of now, Malaysia’s state owned firm Khazanah National owns a 69 percent stake in Malaysia Airlines. They will up their stake to 100 percent in the airline.

According to Azman Mokhtar, the managing director of Khazanah National, these new measures are being undertaken to hasten the revival of Malaysia Airlines and its brand name.

“The combination of measures announced today will enable our national airline to be revived.” He adds, “Success is by no means guaranteed – while it is imperative that MAS [Malaysia Airlines] as a critical enabler in national development is revived, public accountability for the use of the funds mean that it cannot be renewed at any cost.”

Other measures that Malaysia Airlines plans to undertake include the slashing of long haul routes and revamping their image as a safe airline company. Bookings on Malaysia Airlines fell sharply following the MH370 and MH17 crashes. The entire recovery plan is going to cost the Malaysia Airlines almost six billion Malaysian ringgit – or $1.9 billion. The company expects to return to profitability by 2018. The Airline would also be de-listed from the Bursa Malaysia stock exchange by the end of 2014.

Meanwhile, investigators continue to look for any trace of flight MH370 which has been missing since March. The exact causes that led to the crash of flight MH17 are also being investigated. That Malaysian Airlines flight was shot down over Ukraine on July 17 and 298 people were killed.

Do you think these measures will help restore Malaysia Airlines to profitability?

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