http://time.com/3219722/malaysia-airlines-to-cut-6000-staff-in-overhaul/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29
Aug. 29, 2014
Malaysia Airlines announced the overhaul on Friday to revive its damaged brand, after double passenger-jet disasters
(KUALA LUMPUR, Malaysia) — Malaysia Airlines will cut 6,000 workers as part of an overhaul announced Friday to revive its damaged brand after being hit by double passenger jet disasters.
The staff reduction represents about 30 percent of its current workforce of 20,000. A search for a new CEO for the airline is underway.
Khazanah Nasional, the state investment company that owns 69 percent of the airline, said the overhaul includes the establishment of a new company that will take over the existing Malaysia Airlines business and its reduced staff.
The revamp and new investment in the carrier will cost about 6 billion Malaysian ringgit ($1.9 billion).
“The combination of measures announced today will enable our national airline to be revived,” said Khazanah managing director Azman Mokhtar.
The airline will be taken completely under the wing of the government. Khazanah previously announced that it plans to take 100 percent ownership.
A substantial revamp has long been on the cards for Malaysia Airlines, which was struggling with chronic financial problems even before it was hit by the double disasters this year.
Investigators continue to scour the southern Indian Ocean for Malaysia Airlines Flight 370 which veered far of course while en route from Kuala Lumpur to Beijing on March 8 with 239 people on board. In July, 298 people were killed when Flight 17 was blasted out of the sky as it flew over an area of eastern Ukraine controlled by pro-Russian separatists.
The tragedies have scarred the airline’s brand, once associated with high-quality service. Travelers on recent long-haul flights have posted photos on social media of nearly empty cabins and departure lounges. The airline says passengers fell 11 percent in July from the year before.
In releasing its latest quarterly financial result, a loss, on Thursday, Malaysia Airlines said the worst impact from the disasters will come in the second half of this year.
Khazanah said at a press conference that it has begun a search for a new chief executive for the airline, which is likely to be completed by the end of this year.
Current CEO Ahmad Jauhari Yahya will continue to head Malaysia Airlines until its new incarnation is established in July next year.
The state investment fund said it aims to restore Malaysia Airlines to profitability by the end of 2017.
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