Malaysia Airlines is slated to cut 6,000 workers on Friday as part of a $1.9 billion company overhaul to revive its damaged brand after being hit with by two major jet disasters, the Associated Press reported on Friday.
The reductions in staff represent about 30 percent of its current workforce of 20,000 people. A search for a new CEO is underway, but the company doesn't intend to change the airline's name. Some branding experts say changing the name is necessary for a successful makeover.
Khazanah Nasional, the state investment company that owns 69 percent of the airline, said the changes include the establishment of a new company that will take over the existing business and its reduced staff.
The overhaul and new investment in the carrier will cost about 6 billion Malaysian ringgit ($1.9 billion). Analysts say the large cut in staff suggests the airline will reduce flights to Europe and China.
The back-to-back disasters and ongoing financial woes "created a perfect storm for the restructuring to take place," Khazanah Managing Director Azman Mokhtar told the Associated Press. "We need to have a fresh start."
The plan looks to "strike a balance between Malaysia's desire to revive a national carrier against the prudent use of public funds," he said.
Malaysia Airlines will be removed from the Malaysian stock exchange and taken under the wing of the government. Khazanah, which previously announce that it plans to take complete ownership, aims to restore the damaged airline to profitability by the end of 2017. Relisting of its shares on the stock exchange is expected to happen by 2019.
Authorities continue to search the southern Indian Ocean for Malaysia Airlines Flight 370, which veered far off course while on its way from Kuala Lumpur to Beijing on March 8 with 239 people on board. Flight 17 was blasted out of the air in July as it flew over an area of eastern Ukraine controlled by pro-Russian separatists and all 298 people were killed.
