Malaysia Airlines is “technically bankrupt”, the firm’s chief executive said on Monday, as he unveiled plans for a restructuring program that involves massive job cuts and the scrapping of some international routes.
“We are technically bankrupt… the decline of performance started long before the tragic events of 2014,” Christoph Mueller said at a news conference, referring to the twin air disasters the carrier suffered last year.
Making his first public appearance as CEO since being hired last month, Mueller confirmed previously disclosed plans to cut 6,000 jobs, shrinking the troubled airline’s workforce to 14,000, Reuters reported.
As part of efforts to return the carrier to profit within three years, Malaysia Airlines — which is now fully owned by state fund Khazanah after a privatization last year – will review its long-haul fleet and cut some unprofitable international routes.
Capacity measures will include “reducing aircraft size on certain routes, reducing frequency on certain routes, and certain cases abandoning the route altogether,” Mueller was quoted as saying.
In its last earnings announcement as a public company, Malaysia Airlines recorded its worst quarterly loss since late 2011 as passenger numbers and yields dropped further after the loss of two jets.
Flight MH370, carrying 239 passengers and crew, disappeared in March last year, in what has become one of the greatest mysteries in aviation history.
Last July, Flight MH17 was shot down over rebel-held territory in eastern Ukraine, killing all 298 on board.
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