As part of the major wide-ranging restructuring going on, Malaysia airlines slash 6,000 jobs. The major restructuring is a follow-up of the loss of two airplanes sometime this year. This 30 percent workforce reduction was revealed on Friday by state investor Khasanah, being the owner of approximately 70 percent of the carrier. Also, Khazanah stated that a new corporation that will take in most of the carrier’s assets will be created.
Khazanah’s plan is to buy out the minority shareholders and would delist the presently constituted Malaysia airlines. Subsequently, there will be a shift of assets to the newly created company. The fund is said to be likely ready to go public come next three to five years.
According to the managing director of Khazana, AzmanMookhtar, it is necessary to implement this change so that the airline can compete in the fierce airline industry. “The combined methods stated today are the way forward in reviving the national airline. Right now, funds have been provided to begin the implementations, but there are strict conditions attached to funds’ availability. This way, the objective of resetting Malaysia Airlines’ business models as well as cost structures will be realized.
According to the report made by the airline yesterday, there is a total loss of $97.4 million in the second business quarter as the airline whirled from the loss of MH17 over Ukraine(second aircraft disaster encountered in 2014).
Sometime ago, Malaysia airline represented an epitome of national pride. The truth is, Malaysia airline was already in a deep financial turbulent prior to the double disasters of the Flight 17 and Flight 370 that brought a total of 537 lives to an abrupt end.
For years, no profit has been generated by the carrier, and attempts to compete with affordable carriers have been nothing but efforts in futility, and there was a growing need for additional government bailout before now.
According to analysts, the hindrance in the way of Malaysia Airlines is uncompetitive supplier contracts, worsened by bloated workforce.Labor unions are definitely not keeping quiet about the intended restricting plan. The aircraft MH17 was in July shot out of the sky, over pro- Russian militants territory – the militants that are at war with the Ukraine government. According to the United States government, it was a surface-to-air missile that brought down the aircraft.
Malaysia Airlines Flight 370 en-route to Beijing from Kuala Lumpur disappeared in March with 239 passengers on board. There is yet no trace of this aircraft.