World | Asia

May 28, 2015

Massive Layoffs Coming to Malaysia Airlines in Total Overhaul

Malaysia Airlines will lay off about third of its workforce as the company begins a dramatic overhaul that may also bring a new name and logo

New CEO Christoph Mueller – hired away from Irish carrier Aer Lingus to revamp the perennially unprofitable Malaysian airline – says a complete makeover is in store. Mueller tells Reuters the overhaul will transform Malaysia Airlines into a "start-up" type of operation.

"I'm hired to run the new company entirely on commercial terms and there's very little margin for error," Mueller says in an interview with Reuters.

"It's not a continuation of the old company in a new disguise, everything is new," Mueller says.

The overhaul may even include a new name and logo, unnamed sources add to Reuters.

The changes of course, comes in the the wake of two tragedies involving Malaysia Airlines planes during the past 15 months. In March 2014, Malaysia Airlines Flight 370 disappeared en route from Malaysia to China. The fate of the plane and those onboard remains unknown. It's widely considered to be one of aviation's greatest mysteries. In July 2014, Malaysia Airlines Flight 17 was shot down over Ukraine amid a conflict between Ukraine and pro-Russian separatists.

Malaysia Airlines overhaul will lead to massive job cuts, with unnamed sources telling CNN that between 6,000 and 8,000 of the company's current workforce of 20,000 will lose their jobs.

The Star of Malaysia reports that the carrier "will terminate its entire workforce to start afresh as a smaller airline with a regional focus rather than international."

"All employees will get the termination letters and either a letter to join the new company, or to register ... [for] outplacement," a company spokesperson confirms to CNN.

"It is a very sad period in our lives," an unnamed Malaysia Airlines worker says to the Star. "I never thought this day would come when I first joined the airline more than two decades ago."

As for a new "regional" focus, Mueller tells Reuters that Malaysia Airlines is trying to unload some of its long-haul widebody planes. In particular, Mueller says the carrier has been trying to find buyers for two of its Airbus A380 superjumbo jets. He says Malaysia Airlines will likely shrink the size of its overall fleet, but that he expects the company to keep at least some of all the aircraft types it currently has. That includes the Airbus A330s and Boeing 777s that some previous reports had suggested were on the chopping block.

In the meantime, Malaysia Airlines' Mueller moved to reassure the carrier's customers ahead of the impending shake-up.

"I assure you our operations are very much business as usual. All MAS (Malaysia Airlines) flights, schedules and reservations continue to operate as normal," he says in a statement quoted in a follow-up story by The Star. "We remain committed to serving you with our world-class Malaysian Hospitality and look forward to welcoming you on board MAS."

Text by USA Today
 

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