After the two recent controversial air disasters and conspiracy theories over the tragedies, Malaysian Airlines is facing an intrepid revamp as the company's losses broaden.
Because of the widening of the company's losses, Malaysian Airlines will reportedly cut down nearly a thirty percent or 6,000 jobs of its 20,000 workforce and slash back its global route network as part of a radical $1.9 billion revamping succeeding the overwhelming and conspiratorial impact of two airline tragedies.
The 42-year old Malaysian Airlines will be de-listed by the end of the year and will be taken over by Malaysia's Khazanah Nasional state fund as a part of a bid to revamp and rescue the company that targets to bring long intangible efficiency and global standards.
The 6,000 job cuts were greater than projected by the industry and mark a throbbing new blow for staff after a disastrous year for the national flag carrier and the Southeast Asian country. Khazanah Nasional state fund, which owns the majority stake in Malaysian Airlines, said that it would invest in "re-skilling" those who lose jobs and pledged to set up a panel to improve often rocky relations between unions and management.
Khazanah Managing Director Azman Mokhtar told reporters in Kuala Lumpur that the recent tragic events and ongoing difficulties at Malaysian Airlines have created a perfect storm that is allowing the revamping to take place. He added that they believe that the 6 billion is not a bailout and will be recovered with re-listing.
The state fund that currently holds a 69 percent in Malaysian Airlines will take 100 percent ownership when the carrier is de-listed. They also said that it would pay 1.4 million ringgit to buy out minority stockholders. Under the revamp plan, Malaysian Airlines assets and liabilities will be transferred to a new company with Khazanah. The state fund projects to return Malaysian Airlines to profit by 2017 and re-list the airline within five years.
In line with Malaysian Airlines' revamp, an international search for a new chief executive was underway but current CEO Ahmad Jauhari Yahya would stay on until July 2015.
Airline industry players said the revamp plan appeared to be far more comprehensive and radical. The drastic cut back covers a wrenching year for the airline following the Flight MH370's unexplained disappearance en route from Kuala Lumpur to Beijing in March and the Flight MH17's shooting down over Ukraine in July. Both the airline and the government came under stern criticism over lack of transparency on handling the disaster, one of aviation's biggest mysteries.
Since 2010 and before the recent air disasters, Malaysian Airlines hasn't made an annual profit and revealed deepening losses. The revamping is an intrepid move which has used state firms such as the national airline as communal tools to generate jobs and strengthen policies.
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