Khazanah to Pour $2bn Into Reviving Malaysia Airlines
KUALA LUMPUR(AFP) - Malaysia Airlines is to shed 30 percent of its workforce under a tough restructuring plan unveiled by the country’s sovereign wealth fund, which will pump Rm6bn ($1.9bn) into the stricken airline over the next three years in a bid to restore it to profitability by 2017.
It is the most radical overhaul since the airline assumed its present form in 1972, and a sign of the Malaysian government’s determination to rescue what has become a national corporate icon in the wake of the loss of two jetliners in tragic circumstances this year.
But strict conditions were imposed on the money by the fund, Khazanah, which is set to take full ownership of the airline in order to see through the overhaul.
That marks a departure from previous attempts to restructure the loss making airline, which for years operated with bloated staff numbers amid political pressure from unions and years of mismanagement too often tolerated by the government, critics have said.
"While it is imperative that MAS [Malaysia Airlines] 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,” said Azman Mokhtar, Khazanah managing director.
The funds "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,” he added.
Khazanah, which holds 69 per cent of Malaysia Airlines and is planning to take the carrier private, on Friday unveiled a 12-point plan that includes cutting 6,000 of its 19,500 staff, and slimming its network – which includes long-haul routes such as London, Australia and Dubai – to one "principally regionally focused” on Asia.
But strict conditions were imposed on the money by the fund, Khazanah, which is set to take full ownership of the airline in order to see through the overhaul.
That marks a departure from previous attempts to restructure the loss making airline, which for years operated with bloated staff numbers amid political pressure from unions and years of mismanagement too often tolerated by the government, critics have said.
"While it is imperative that MAS [Malaysia Airlines] 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,” said Azman Mokhtar, Khazanah managing director.
The funds "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,” he added.
Khazanah, which holds 69 per cent of Malaysia Airlines and is planning to take the carrier private, on Friday unveiled a 12-point plan that includes cutting 6,000 of its 19,500 staff, and slimming its network – which includes long-haul routes such as London, Australia and Dubai – to one "principally regionally focused” on Asia.