KUALA LUMPUR Aug 25 About a quarter of Malaysia
Airlines' 20,000 staff are likely to lose their jobs
under a restructuring plan for the loss-making airline hit by
two separate jet disasters this year, a source with direct
knowledge of the matter said.
The restructuring plan, due to be unveiled later this week,
will include route cuts as well as the loss of up to 5,000-6,000
jobs, according to the source, speaking on condition of
anonymity. The source was not authorised to discuss the plan
The carrier's majority owner, Malaysian state fund Khazanah
Nasional Bhd, is expected to announce the plan to
restructure the firm as early as Aug. 28. Khazanah, which owns
69.37 percent of airline, formally known as Malaysian Airline
System Bhd (MAS), said earlier this month it is taking MAS
private in a $435 million deal.
MAS is due to announce second-quarter results on Aug. 28
that are expected to show losses expanding. MAS has been
struggling with a slump in business since the unexplained
disappearance of Flight MH370 in March tipped the airline into
its worst quarterly performance in two years in January-March.
Its problems deepened on July 17 when its Flight MH17 was
shot down over Ukraine, killing all 298 people on board. The
airline is now set to post one of its weakest performance in the
April-June quarter, hit by due to cancelled bookings, weak
passenger yields and high overheads, according to analysts.
The same source told Reuters in July that Khazanah planned
to de-list the airline, which has recorded a net loss for the
past three years, and announce the restructuring plan as early
as the end of August.
A Khazanah spokesperson said it does not comment on
speculation. MAS officials weren't not immediately available to
Prime Minister Najib Razak, who is chairman of Khazanah,
still has to sign off on a restructuring plan for the carrier
that is politically sensitive.
While 5,000-6,000 job losses would signal a drastic
downsizing of the firm, analysts have said many staff could be
offered jobs at other government-run firms to soften the blow to
them and their families. About 13,000 MAS workers are unionized,
belonging to the MAS Employees Union.
The airline and its key stakeholders are in talks with banks
for a strategic overhaul that could include the partial sale of
its engineering unit and an upgrade of its ageing fleet, sources
involved in the discussions have told Reuters.
The plan is also expected to bring in a new chief executive
and replace other senior executives.
Shares of MAS ended unchanged at 25.5 sen on Monday. The
stock has dropped 17.7 percent year to date, compared with a 0.2
percent rise in the benchmark index.
(Reporting by Yantoultra Ngui; Editing by Kenneth Maxwell)