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Malaysia Airlines unveils major overhaul in battle for survival Malaysia Airlines to slash 25 per cent of staff in overhaul after tragedies
(about 14 hours later)
Malaysia Airlines is set to undergo the most radical restructuring in its history, with a quarter of its staff axed and routes to Europe and China slashed as the carrier fights to survive,after being struck by two tragic disasters in less than six months. Malaysia Airlines is set to undergo the most radical restructuring in its history, with a quarter of its staff axed and routes to Europe and China slashed as the tragedy-struck carrier fights for its survival.
The airline has been flying near-empty planes after four disastrous months which saw the disappearance of flight MH370 en route to Beijing from Kuala Lumpur in March, followed by flight MH17 being shot down over Ukraine in July. This saw 537 passengers and  29 staff lose their lives. The airline has been flying near-empty planes after four disastrous months  – a time when the disappearance of flight MH370, which went missing en route to Beijing from Kuala Lumpur in March, was followed by flight MH17 being shot down over Ukraine in July. A total of 537 passengers and 29 Malaysia Airlines staff lost their lives in the two tragedies.
Now Malaysia’s sovereign wealth fund Khazanah — chaired by prime minister Najib Razak and the biggest shareholder in the carrier — has won backing for a restructuring plan that will also see the airline delist from the stock exchange and be nationalised. Now Malaysia’s sovereign-wealth fund, Khazanah – which is chaired by the country’s Prime Minister, Najib Razak, and is the biggest shareholder in the carrier – has won backing for a restructuring plan that will also see the airline delist from the stock market  and be nationalised.
Malaysia Airlines will sack about a quarter of its 19,500 staff as it focuses on core Asian routes and retains only some of its long-haul schedule to help feed traffic. Malaysia Airlines will sack about a quarter of its 19,500 staff as it focuses on core Asian routes and retains only some of its existing long-haul schedule to help feed traffic.
Instead, the carrier, which may also change its name, is expected to rely more heavily on its Oneworld alliance partners, who include British Airways, to bring in fliers from Europe. Malaysia Airlines flies from Heathrow, as well as Paris, Amsterdam and Frankfurt in Europe. Insiders said they expect Frankfurt and other routes to China to be axed. Instead the carrier – which may also change its name – is expected to rely more heavily on its Oneworld alliance partners, which include British Airways, to bring in flyers from Europe.
The tragedies have not only hit demand for seats on the airline: almost 200 cabin crew have resigned this year, with many citing “family pressure” or fear of flying. Malaysia Airlines currently flies from Heathrow, as well as Paris, Amsterdam and Frankfurt. Insiders said they expect Frankfurt and other routes to China to be axed.
The airline’s market value has plunged by 40 per cent during the past nine months, but even before the two tragedies Malaysia Airlines had one of the worst financial performances in aviation. The carrier’s net loss of Rm443 million (£85 million) between January and March was its fifth-consecutive quarter of losses. The MH17 and MH370 tragedies have not only hit demand for seats on the airline: almost 200 cabin crew have resigned this year, with many citing “family pressure” or fear of flying.
Australia’s national flag carrier Qantas blamed weak domestic demand and rising fuel costs for its A$2.8 billion (£1.6 billion) net loss for the year to June, its biggest annual loss. The airline’s market value has plunged by 40 per cent during the past nine months.  In the last quarter, Malaysia Airlines’ losses widened to 307 million ringgit (£59m) from 1,176 million ringgit the year before, although it was an improvement on the 443 million ringgit loss posted in the first quarter.
Even before this year’s disasters, however, the company has been under financial pressure. The last time it made an annual profit was in 2010.