Thousands of job losses expected as Malaysia Airlines enters pre-pack administration
Malaysia Airlines has started a “hard reset” of its business, which could include as many as 6,000 job losses, as it struggles to keep running.
Last week the troubled carrier, which suffered two major tragedies last year, entered a pre-pack administration as it transitions to a new company, Malaysia Airlines Berhad.
PwC Malaysia's executive chairman Dato’ Mohammad Faiz Azmi was appointed as administrator by sole shareholder Khazanah. The move had been approved by both houses of the Malaysia parliament last year.
“Selected assets and liabilities” will be transferred from Malaysia Airlines to MAB, with operations switching over to the new company on September 1.
Simultaneously, the business is sending its 20,000 employees a letter notifying them that they could lose their jobs. Around 14,000 positions are expected to remain after the restructure, but some of those who remain with the company will have to take on different roles.
Malaysia Airlines is part-way through a 12-point plan to “set it on a path towards sustainable profitability” under new chief executive Christoph Mueller. The company has suffered continuous losses since 2008, despite having received billions of dollars from the government to keep it afloat.
It has also suffered from two high profile tragedies in quick succession. In March last year flight MH370 went missing with 239 passengers and crew on board. Just a few months later, flight MH17 was shot down by suspected ground-to-air missiles over Ukraine.
Mueller assured customers that “our operations are very much business as usual” throughout the transition.
“All MAS flights, schedules, and reservations continue to operate as normal,” he added. “We remain committed to serving you with our world-class Malaysian hospitality, and look forward to welcoming you on board Malaysia Airlines.”
“This appointment [of an administrator] does not affect our daily operations or existing reservations. You can continue to make reservations in full confidence that our flights and schedules are operating as normal, that tickets sold will be honoured, and that our enrich frequent flyer programme continues with miles and status preserved”, Mueller added.