Malaysia Airlines “technically bankrupt”, 6,000 staffs laid off

Published on : Tuesday, June 2, 2015

Malaysia AirlinesAccording to the former chief executive of Ireland’s Aer Lingus, Malaysia Airlines is “technically bankrupt” but can emerge as Southeast Asia’s leading airline. The new CEO of Malaysia Airlines said the ailing carrier could break even by 2018 after cutting staff, selling surplus aircraft and refurbishing its international fleet.

 

On Monday Christoph Mueller said that the airline is trying to sell two of its A380 super jumbo jets and has gone ahead with its previously announced plan to cut 6,000 of its 20,000 staff. And the rest 14,000 staffs have been offered jobs in a new company that is being set up to take over the legacy Malaysia Airlines business.

 

It is being kept alive by an injection of funds from a Malaysian government sovereign wealth fund. The Malaysian parliament passed a law allowing the airline to be restructured under Chapter 11-style bankruptcy protection.

 

Malaysia Airlines had a good safety and service record before but last year’s disasters and tragedies battered its brand. Malaysia Airlines Flight 370 with 239 people on board went missing March 8 last year while en route to Beijing and no trace of it has been found. In July, a Malaysia Airlines jet was shot down over Ukraine, killing all 298 people on board. The search for Flight 370 is still underway.

 

Its Boeing 777 and Airbus A330 jets will be revamped and reconfigured as two-class planes with the business cabin to offer larger lie-flat seats than other airlines. A few international routes may be cut, but the airline’s approach would mainly turn on flying smaller aircraft on routes that are currently unprofitable.

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