Malaysia Airlines Cutting Thousands of Jobs as Part of Restructuring Plan
The announcement comes just after MAS was hit with over $97 million in net losses during the second quarter.
Malaysia Airlines announced a restructuring plan on Friday that involves large layoffs and a delisting of its stock, as it hopes to become profitable again. The company suspended trading of its shares on Friday, which will be delisted entirely before 2015. The announcement comes just after MAS was hit with over $97 million in net losses during the second quarter, stemming directly from the tragedies of Flight MH370, which went missing over the Indian Ocean, and Flight MH17 which was shot down over Ukraine.
The airline's majority owner, Malaysia's state investment firm Khazanah Nasional, held a press conference today to address the suspension. Khazanah has been planning a "complete overhaul" of MAS, which began with suspending trading.
The $1.9 billion restructuring plan includes cutting a third of their workforce. MAS currently employs about 20,000 people and will reduce this to 14,000. Khazanah Managing Director Azman Mokhtar told reporters, "Recent tragic events and ongoing difficulties at MAS have created a perfect storm that is allowing this restructuring to take place. We believe that the [$1.9] billion is not a bailout, we believe it will be recovered with re-listing."
MAS has not been profitable since 2010 and with the restructuring, they hope to be profitable by 2017, in just three years. In five years, they hope to relist the airline. While the steps could save the airline many now consider cursed, even they agree the plan is not foolproof. "Success is by no means guaranteed," officials of Khazanah told Reuters.