Malaysia Airlines System, which has been struggling in the wake of two recent disasters, on Friday announced a
Its main shareholder
"The combination of measures announced today will enable our national airlines to be revived. While funds have been made available, they come with strict conditions so as to ensure that MAS truly resets its business model and cost structures in order to be truly sustainable," Khazanah Managing Director
The first step, announced
Azman said the new company will require a scaled-down workforce of about 14,000, meaning 6,000 or 30 percent of the current 20,000 staff members would have to go.
The airline is expected to cut more routes to be more "regionally-focused," he added without specifying which routes would be chopped, leaving it to the airline to announce.
Under a leaner new company,
This latest restructuring plan follows a series of turnaround plans that Khazanah had come up for
The company on Thursday announced a net loss of
For the January-June period, the national carrier recorded a total net loss of
Between 2011 and 2013, the airline lost a total of
To add to the airline's woes, it was hit by the twin tragedies of flights MH370 and MH17. MH370 disappeared from radar
Four months later, MH17 was shot down over conflict-ridden eastern
The two tragedies, Azman said created a "perfect storm" that hastened the move to restructure the airline.
Despite the failure of previous resuscitation efforts, Khazanah is confident the plan this time will work.
The difference, Azman said, is that under the new plan,
Shukor Yusof, an aviation analyst with
"It doesn't address the real problems affecting MAS which include financial mismanagement and implementing ill-conceived business model. Reducing 6,000 staff will do little to help the airline to profitability," he told
In his message published in Khazanah's booklet detailing the recovery plan for the airline, Najib said, "Only wholesale change will deliver a genuinely strong and sustainable
"More than an airline, MAS is a national icon; much loved and steeped in our history. The plan before you today will ensure it has a bright future," he added.
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