Cabinet approves latest MAS revamp plan
The Malaysian Insider – 18 hours agoRELATED CONTENT
- Cabinet approves latest MAS revamp plan
Putrajaya has approved the latest Malaysia Airlines (MAS) restructuring plan that will see up to 6,000 jobs cut, said sources.
This followed state asset manager Khazanah Nasional Berhad's approval of the comprehensive revamp of the national carrier, which has suffered financial losses for years.
"All okay," said a source when asked whether the Cabinet approved the plan today.
The plan will include shaving off thousands of jobs, putting in place opportunities for retraining staff, and drawing up retrenchment packages.
This could mean the loss of several thousands of jobs amounting up to 30% of its workforce of 20,000.
The Malaysian Insider had reported that the plan also includes roping in top foreign executives to help turnaround the national carrier as part of the massive revamp exercise – the latest plan since the Wide Asset Unbundling (WAU) exercise of 2002 – a year after Putrajaya bought back MAS from tycoon Tan Sri Tajuddin Ramli.
Apart from staff cuts, the latest plan will see the flag carrier dropping unprofitable routes and scaling down flight frequencies as well as reviewing lopsided contracts signed with various stakeholders.
MAS is expected to announce its latest quarterly results tomorrow which is expected to plunge it further into the red, while its majority shareholder Khazanah will announce details of the plan on Friday.
Maybank IB aviation analyst Mohsin Aziz told The Malaysian Insider that MAS Q2 results is going to be "a disaster", as it is expected to chalk losses on the upwards of RM600 million.
Last May, the struggling airline reported its biggest quarterly loss in over two years, hit by a sharp drop in passenger traffic after what it called the "dramatic impact" of the unexplained disappearance of flight MH370 in March.
MAS's net loss expanded to RM443.4 million in the first quarter, from a net loss of RM278.8 million in the same period last year.
It is the carrier's worst quarterly loss since October-December 2011. MAS has lost money for the last three years, beset by high costs and stiff competition.
The carrier had undergone three restructuring exercises since 2007 which had failed to yield any results due to a bloated workforce, changing market demand, stiff competition and high overhead costs.
MAS is to be taken private by Khazanah, which owns over 69% of the carrier. Earlier in August, it had announced its plan to buy out shares it does not own at 27 sen for each MAS share, amounting to nearly RM1.4 billion, to take the troubled airline private.
This comes as MAS struggled in the wake of two major aviation disasters this year. Flight MH370 from Kuala Lumpur to Beijing is still missing with 239 people on board.
On July 17, flight MH17 from Amsterdam was shot down over Ukrainian air space, killing all 298 people on board. – August 27, 2014.
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