NNA – The newly appointed chief executive of loss-making Malaysia Airlines said on Monday the carrier is “technically bankrupt”, underlining the case for a restructuring to cut a third of jobs, scrap some international routes and review its long-haul fleet.
“We are technically bankrupt…the decline of performance started long before the tragic events of 2014,” Christoph Mueller said, speaking at a news conference. Already squeezed into years of losses by stiff regional competition, the carrier was seriously affected last year by two separate jet disasters.
Mueller was making his first public appearance as CEO since being hired last month by the carrier’s owner, Malaysian state fund Khazanah, to lead the restructuring. Khazanah, previously the majority owner, took the airline private last year as part of a 6 billion Malaysian ringgit (ê1.63 billion) plan aimed at returning it to profit within three years.
The carrier on Monday said its new legal entity is Malaysia Airlines Bhd (MAB), replacing the previous Malaysian Airline System Bhd (MAS), with Mueller promising to unveil a full corporate rebranding in future. The carrier also confirmed previously disclosed plans to cut 6,000 jobs, shrinking its workforce to 14,000, are now being implemented.
“We will remain a full service international carrier connecting continents,” Mueller said, adding that while some international routes will go there were no plans to turn it into a regional carrier. He also said there would be no cutbacks in domestic network.
Capacity measures would include “reducing aircraft size on certain routes, reducing frequency on certain routes, and certain cases abandoning the route altogether,” he said.–REUTERS