Malaysia Airlines is cutting 30% of it’s staff in an attempt to be viable business. It is getting a $2B bailout from the Malaysian Government and will de-list itself from the stock exchange. It will focus on becoming a regional routes which sounds like a smart business move: There is no need to fly everywhere and travelers accept changing at hubs.
The two disasaters were a factor in that it led to reduced number of passengers booking on them.
Khazanah [the investment arm of the Malaysian government]said there would be “significant changes to leadership” at Malaysia Airlines and that it would consider “global aviation industry executives” in its search for new talent. The current chief executive, Ahmad Jauhari Yahya, will remain as chief until July.
The government said it would carry out the restructuring by creating a new company with a “right-sized work force and work practices and contracts.” Malaysia Airlines has been burdened in recent years by contracts with politically connected suppliers.
The burden — and the risk — of the restructuring plan appears to fall heavily on the airline’s creditors. They will be offered a swap of the airline’s debt for shares of the new company, according to the plan. Among the airline’s largest bondholders is the government employee pension fund, known as Kumpulan Wang Persaraan, which, according to Friday’s announcement, agreed to swap 750 million ringgit, or about $240 million, for ordinary shares. The move is likely to be controversial because investors have long assumed that the debts of the state-controlled airline were guaranteed by the government.