Malaysia Airlines’ state-run parent company, Khazanah Nasional Berhad, has unveiled its plan to help rebuild the struggling national carrier, including the cutting of 6,000 jobs.
The 12-point turnaround plan, entitled ‘Rebuilding a National Icon’, details the steps intended to return MAS to profitability within three years. This includes the de-listing of the airline from the Malaysian stock exchange, which occurred in August, and the creation of a new company which is expected to be re-listed within three to five years.
During this time, the new MAS will receive capital injections amounting to MYR3 billion (US$951.8 million) while the airline’s operations will be rationalised. This will include a focus on regional routes and piggy-backing on the broader network of MAS’ oneworld alliance partners. The airline will also move its headquarters from Subang to Kuala Lumpur International Airport (KLIA).
But the most eye-catching element of the turnaround plan is the move to “right-size” the airline’s workforce. This will lead to the reduction of 6,000 jobs, or approximately 30% of the existing MAS headcount. Once all cuts have been undertaken, the new company will have an estimated 14,000 staff.
Khazanah also said there would be “significant changes to leadership” of the airline, with a new CEO expected to replace Ahmad Jauhari Yahya from July 2015.
“The combination of measures announced today will enable our national airline to be revived,” said Azman Hj Mokhtar, Khazanah’s managing director. “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.
“Success is by no means guaranteed – while it is imperative that MAS as a critical enabler in national development is revived, public accountability for the use of the funds mean that it cannot be renewed at any cost. The plan also calls for all parties to close ranks and work together to enable the permanent reconstruction of our national icon,” he added.
MAS last week posted a loss of MYR750m for the first six months of 2014, during which it suffered the twin losses of flights MH370 and MH17. But even before these two tragedies MAS had been struggling. The national carrier suffered three consecutive full-year net losses from 2011 to 2013, totalling more than MYR4bn.
MAS welcomed Khazanah’s announcement and urged “all Malaysians to play their part in ensuring [the plan’s] enduring success”.