Malaysia Airlines on Friday announced its restructuring plan, and despite a $2 billion bailout from the Malaysian government the financially-plagued carrier will cut almost 30 percent of its work force.
“Success is by no means guaranteed,” Azman Mokhtar, managing director for Khazanah Nasional, the investment firm for the Malaysian government, said in a statement.
Indeed, Malaysia Airlines lost $98 million in the second quarter on the heels of the twin tragedies that befell the airline within four months. In March, Flight 370 en route from Kuala Lumpur to Beijing disappeared and still hasn’t been found, and in July Flight 17 was shot down over the troubled hot spot of Ukraine, site of civil unrest, en route from Amsterdam to Kuala Lumpur. Combined, there were nearly 600 deaths.
Following the Flight 17 tragedy, bookings fell 33 percent and the airline is expecting deeper losses in the third and fourth quarters as a result. But the carrier had been financially troubled for at least three years prior to the tragedies.
The job cuts total 6,000 workers, with the government saying in a statement that the new Malaysia Airlines will operate with a “right-sized work force and work practices and contracts.”
Officials said there will be a new chief executive officer for the new company, which Khazanah Nasional said it hopes to return to profitability by 2017. However, there was no mention of whether there will be a complete rebranding – including name change and new livery colors.
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